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Please register for: The Best Investment Themes Post Election 

on Nov 21, 2024 11:00 AM PST at:

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Matthew Tuttle will discuss:

Three below the radar investment themes that have nothing to do with AI.

How to design trades for asymmetric returns.

How to profit from the Fed’s stupidity.

Why bonds are a stupid investment and what to do instead.

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I have been saying for the past couple of days that I thought the best opportunity in this market is puts (or shorting) some of the high flying stocks that are starting to break. When doing this, I prefer the names I haven't really heard of to household names like NVDA, which does look shortable here, though I'm not going to do that.

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Though the NVDA chart does illustrate the problem. I do believe they will be the intermediate and long term beneficiaries of AI, but there is nothing in that chart that screams out that this is a spot you want to buy. They do have earnings this week, so that could change. Intermediate to longer term I think you need to own NVDA.

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QQQs are telling you the same thing. They could bounce from here and resume an uptrend, but they look like they want to test the 50 day.

Then there's a stock like GEV, that I really, really, want to own, but it's almost doubled since August. I could look at this and call Friday's move an undercut and rally at the 10 day, but I probably won't.

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That's why I have spent most of my time the past few days shorting the high flyers. Here are a couple of examples of stocks that have had massive runs and now look like they are breaking down.

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Everyone is going to have their own way to read charts, and there is no right answer. For me, I watch the 10, 20, 50, and 200 day moving averages. A break of one could be shortable. I much prefer to short at the 50 or the 200, but when dealing with a high flyer you often have to use the 10 day. If it's thematic, so much the better, as I am currently short a bunch of biotech stocks that are getting hurt by RFK Jr.'s appointment.

How Radical Can RFK Jr. Be as America’s Top Health Official?-WSJ

But the 70-year-old environmental lawyer and vaccine critic is likely to face a tough confirmation process in the Senate. If he is confirmed, Kennedy would likely be forced to contend with legal limits, challenges and pushback from companies, scientists and doctors on some things he has promised, legal and public health experts said.

“It is very difficult to drive seismic change quickly in a rulebound, lawbound bureaucracy,” said Dan Troy, who was a chief counsel of the FDA under President George W. Bush.

Speaking of RFK Jr. I am not willing to totally abandon the weight loss drug theme. I still think American's are lazy and will choose a shot over diet and exercise. I think getting all of the chemicals out of our food is easier said than done, and I also think this is only part of the problem.

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WTF?

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I do have short term models that bought the dip on Friday, and that bought puts on UVXY

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I do also think this rally will continue, but watching things like this and focusing on where the charts tell me to go....

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The Fed interrupted the stock market’s Trump rally. What comes next.-MarketWatch

Powell reminded investors that the Fed wasn’t in a rush to deliver the next interest rate cut in the face of a resilient economy, singing much the same tune he warbled after the Fed’s Nov. 7 rate cut — a 25 basis point reduction that followed October’s 50 basis point cut.

But it seemed to land differently on the ears of investors, absent the immediate postelection euphoria, raising concerns about the pace of future Fed rate cuts and the path ahead for market interest rates. Those considerations and how they intersect with Trump’s economic plans are likely to call the tune for markets in the weeks ahead.

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TSLA and Crypto ripping this morning.

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Tesla stock jumps on report Trump team to create self-driving rules-MarketWatch

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Themes

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Fed is Clueless

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Starting to get close to a buy point. Want to see the 200 day hold.....

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Gold miners look strong so far this morning.

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Goldman Says ‘Go for Gold’ as Central Banks Buy, Fed Cuts in ‘25-Bloomberg

Gold will rally to a record next year on central-bank buying and US interest rate cuts, according to Goldman Sachs Group Inc., which listed the metal among top commodity trades for 2025 and said prices could extend gains during Donald Trump’s presidency.

AI

A Powerful AI Breakthrough Is About to Transform the World-WSJ

From new plastic-eating bacteria and new cancer cures to autonomous helper robots and self-driving cars, the generative-AI technology that gained prominence as the engine of ChatGPT is poised to change our lives in ways that make talking bots look like mere distractions.

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AI Power

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Crypto

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Trump Crypto Craze Sent Bitcoin Miners Surging, but Watch Out-WSJ

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Do think that now that we have leveraged plays on Bitcoin, Eth, and MSTR that there is not much use for the miners except for a swing trade now and again.

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European Defense

Germany needs to step up its role in defence as U.S. may do less in Europe, minister says-Reuters

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