Trending, Concerns & Opportunities
Each day is updated if trades are taken until we exit the positions…
Tuesday: 12/5 1) Breakouts – IYR, IYT, IYZ, XLV, XLI, RSP 2) Fed remains engaged in the liquidity game through excess reserve lending… dangerous game we are playing. 3) XRT getting extended upside. 4) Monday intraday reversal and doji candles… can markets add to the upside move?
Monday: 12/4 1) Looking for a follow-through to the upside move started on Friday. 2) BAC Test of the $30.10 level would offer entry point. 3) FCX break above $37.50 Friday… test and follow through.
Friday: 12/1 1) Start of new month… new money and plenty of economic data to come. 2) Same challenges, same opportunities… being patient as the trend unfolds. 3) PFE dropped its weight loss pill… stock dropped 5.1% new way to lose weight. 4) Earnings beat from ULTA stock up 10.8%. DELL missed earnings dropped 5.1%. Earnings remain mixed. XLV trending higher finally after lagging… $132 level of interest. 5) TSLA announced the release of their new truck… stock was flat on the news.
Monday 11/27: 1) Watching BOTZ now that some clarity back in AI… (BOTZ entry hit $26.35.) 2) GBTC upside on Friday… added position. Entry $30.10. 3) XRT/XLY consumer is front and center with the holidays here. Black Friday sales results, followed by Cyber Monday, how to investors respond? XRT entry $$63.90.
Monday 11/20: 3) Sectors of interest starting the holiday week… SOXX, XLB Entry $80. XME Entry $52.50, GLD Entry $184.50, IGV entry $374.20.
Thursday 11/16: 1) Retail XRT testing upside move. Entry $62.95. 4) URA cup and handle pattern upside trade? Entry $27.50. 5) DBA ascending triangle $22.35 resistance.
10/27 Interesting to note that IWM hit a multiyear low and is at a critical support point on the weekly chart… a break lower for the sector could be a negative for the broad indexes. IWM hit entry $.182.40.
Themes and Storylines to Watch
11/28 Retail Sales Holidays – XRT has moved higher on news, but the earnings the last few weeks were very mixed and the outlook was revised lower. Maybe setting up for an “it wasn’t that bad trade”? Kind of like a furniture sale, mark it up to mark it down. Lower the expectations so bad earnings look good. Cyber Monday Sales saw a big bump in BNPL (buy now pay later) purchases. They made up a larger percentage up 42.5% Y/Y versus 18.5% expected. Nothing can go wrong with that… right? Black Friday weekend sales were flat with last year and better than estimates. Worth our attention moving forward.
Electric Vehicles Article – is the party over relative to profits and growth? Barron’s article raised some interesting questions and potential opportunities longer term. TSLA, ON.
10/30 Treasury bond selloff has been more than 50%… if the Fed is done hiking rates… if the belief that the Fed will cut rates in 2024 materializes… would there be an opportunity in long-dated bonds? And we have. As seen on the chart below TLT has rallied from the consolidation reversal on the chart and moved up 5.2%. This will continue as long as the belief remains the Fed is done hiking rates. Question: Belief or Reality? Currently, it is a belief, and… the short-term chart shows the upside reversal and we are trading the move. 11/28 TLT still rising as rates dipped to 4.33%. Since the initial post, TLT is up 8.9%… TMF was the trade posted below.
11/17 The upside continues in the long-term bond as rates move back to 4.45% for the ten-year treasury bond. Still holding positions and letting it unfold near term. TMF entry $4.10. stop $5.04. 11/29 yields continue to drop hitting 4.27% and the bond continues to rise. Adjusted stop.
* All charts are courtesy of TC2000