Financial News vs. Noise

The market slept on Wednesday’s data and decided it liked what it heard, so it was time to buy. I was leaning fade when I saw the S&P close right below the 200 day, but I tested a couple of trades and immediately realized it was not a day to short. Interestingly it was the non profitable names that have been beaten up the most by higher rates that rallied the most. Some of that was short covering, but some was the expectation that rates have peaked. It is important to note that the Fed Funds rate is still 5.376% and it is unlikely the Fed is going to cut anytime soon (unless they break or broke something) so not sure that unprofitable tech is the place to be at the moment longer term.

This is interesting, it shows that institutional investors are still way offsides, so how much of today was them getting back on and how much more do they have to do? Another thing that ought to be interesting into year end is that most money managers are probably way underperforming their benchmarks unless they are chock full of the Magnificent 7. What do they do with 2 months left to go?

Today is NFP, my sense is that if it’s cold we break the 50 day and test 4400. I think now, more than ever, we are in a bad news is good news environment. The worse the economy is the sooner we get rate cuts.

Was hoping TLT would give me a spot to get back in, but it didn’t. I will be patient and jump on any test of the 20 day EMA.

I still think regional banks are in trouble and was watching to see if we got a failure of the 50 day on KRE. We didn’t, so I will continue to watch. Maybe I get lucky and it runs up into the 200 day.

The precious metals were weak yesterday. Not sure why as rates and the Dollar came down. Silver looked like it wanted to rally but went nowhere. As you know, these guys are always on watch for me, when they move, they move. They are often a canary in the coal mine, so why they didn’t run today maybe telling.

I added a new long yesterday, PAGS, it’s a Brazilian company and Brazil is cutting rates. Every other name looks extended.

SMCI is a name I traded intraday. I missed the first short, but I got the long off the bottom and re shorted. It’s my only short exposure at the moment and if the growth stuff is going to rally, this will probably go with it, but it broke the 10 day and I want something on the short side in case NFP comes in hot.

I typically love the commodity names, but haven’t been interested in them for a while. Assuming we are in a new cycle here, these could get hot again. Watching MOS, BTU, AA, and FCX in particular for spots to enter on the long side.

China is back on the radar as well, bunch of names look similar but BABA is always pretty easy to trade.

Don’t get me wrong, I still don’t trust this market, but I’m not going to get in the way of it if it wants to go up. The situation is fluid as always, the market didn’t like AAPL earnings and we have NFP.

News vs. Noise

This China problem could become a problem. Apple’s stock falls as earnings show another revenue decline, China pressure-MarketWatch

As it should. ‘T-bill and chill’ trade sees big influx from individual investors-MarketWatch

I would write it off. Factor Investing Hasn’t Worked This Year. Don’t Write It Off.-Barron’s

Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.

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