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Happy Monday everyone.
I like to start my week looking at the Stocktwits 25 which goes live each Saturday.
It is also a big earnings week with Nike and Fedex and many more companies reporting. Stocktwits has an earnings tab/calendar.
As always, Ivanhoff and I toured the markets checking in on momentum and it is everywhere but technology. I don’t really know if technology stocks and growth are rolling over for an extended period, but we do spend a lot of time looking at stocks/companies/charts that don’t have much to do with the Nasdaq 100. Here is this week’s show. I have embedded it below if you read the blog…
Personally, I am not going to chase ‘the reopening’ trade and stocks, but I will trade them if the right setups continue. For example I am stalking $DIS for an entry.
Here is Ivanhoff’s take:
The same trends persist. Interest rates are going higher which is putting downside pressure on richly-valued tech stocks. The so-called old-economy stocks continue to rise.
The market continues to relentlessly price in going back to normal at some point this year. Anything related to leisure has been on absolute fire – hotels (MAR, HTHT, ABNB), airlines (DAL, UAL, UAL, etc.), travel agencies (BKNG, EXPE, TRIP), entertainment (VIAC, DISCA), restaurants (RUTH, CHEF, CAKE), retailers (JWN, M), etc. The market always over-discounts potential threats and opportunities, so industry moves often go a lot further than most think is reasonable. Rational expectations account only for the first 30% of a typical move. Everything after that is pure momentum speculation, a short squeeze, and FOMO.
Maybe it’s the new round of stimulus that is spurring the speculative spirit or the fear of inflation, but many cryptocurrencies are hitting new highs this weekend. The blockchain-related stocks started to break out last week and many of them are looking constructively for higher prices – BTBT, BLOK, RIOT, MARA, NCTY, MSTR, etc.
Just to wrap up, have a look at small-cap relative value:
And take a look at energy:
The ‘reopening’ trade can continue. The textbooks still work, so don’t just get crushed by the rotation that is happening because technology has led for so long.
I am grateful that money is staying IN the markets and not coming out as it rotates.
Have a great week.
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