Ivanhoff Capital

MarketSurge powers the charts in this video.

We are in a bull market of almost everything. Stocks, US Dollar, Gold, Bitcoin. Even interest rates have been perking up since the last FOMC decision. I don’t know what’s the meaning behind this green wave. All I know is that there are uptrends and we have to find a way to enter with a tight stop and participate. This often means not chasing common breakouts but entering on a pullback near potential support.

The new earnings season has already begun. As usual, banks were the first major group to report. Most banks went higher and held their gains – GS, MS, BAC, WFC, JPM, etc. When was the last time this happened? In the previous few earnings seasons, we saw most banks giving back their gains. 

The most important semiconductor company in the world, TSM also crushed earnings estimates and guided its fourth quarter higher. TSM gapped at new all-time highs where it stalled. 

Intuitive Surgical (ISRG) and Netflix (NFLX) also beat earnings estimates and made new all-time highs. NFLX is up 30x since 2010. This is about 28% annual compounded return. ISRG is up 16x for the same time period. Incredible long-term performance even though it came with a lot of volatility and big drawdowns along the way. 

The bottom line is that the major companies that reported, beat earnings estimates and went higher. So far, the only negative reaction has come from ASML, which dropped 15% and put pressure on the entire semiconductor space. They said that the only areas where they see strength in AI chips. Good news for Nvidia. This is why it continues to set up for a potential breakout near its all-time high of around 140. They remain the undisputed market leader. NVDA is up 850% since January 2023. NVDA is also up 166x since 2016. This is about 77% annual compounded return in the past nine years. 

In the meantime, the US Presidential elections are knocking on the door. They typically bring extra volatility with them, before and after the event. I don’t know if it means anything, but gold keeps making new all-time highs and Bitcoin has also begun to rise again.

I recently published a few children’s books. Check them out if you have kids or friends who have kids: Investing for babies, Trading for babies, Meditation for babies. You can find my other trading books on Amazon here.

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MarketSurge powers the charts in this video.

The large caps ETF, SPY is at all-time highs. The mid-caps ETF, MDY just broke out to new all-time highs from a few-month-long base. Small caps ETF, IWM outperformed significantly on Friday. The reason – interest rates finally started to stall. Rates are deciding the sector rotations in the stock market. If rates have a multi-day pullback, we are likely to see small caps, biotech, housing, regional banks, and crypto outperform while Big Tech takes a deserved break. 

If the small caps ETF, IWM stays above 220 and begins an assault of its 52-week highs near 229, I’d focus on high-volatility stocks that have already started to break out or are setting up for a breakout – RDFN, AFRM, UPST, IONQ, SMR, AEHR, etc. They are fast movers and likely to do well in an environment that lifts most boats. The opposite is also true – those stocks tend to underperform significantly when small caps fall. In other words, they are a high-beta play. 

The new earnings season has just begun. JPMorgan and Wells Fargo beat estimates and helped the financial sector to break out. XLF gained 2% and closed at all-time highs. Regional banks performed even stronger. KRE gained 3.5% and it is looking ready to test its 52-week highs near 60. Next week, we will see many more banks reporting, as well as some banner stocks like Alcoa (AA), Intuitive Surgical (ISRG), ASML, and TSM. The last two are leading indicators for the semiconductor industry. TSM makes all the chips for Nvidia, Apple, Qualcomm, AMD, Intel, Broadcom, Sony, and Marvel. ASML provides the machines used to manufacture chips.

I recently published a few children’s books. Check them out if you have kids or friends who have kids: Investing for babies, Trading for babies, Meditation for babies. You can find my other trading books on Amazon here.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

Last week brought another choppy tape filled with quick shakeouts and morning gaps fading. Under the volatile surface and spikes in VIX and crude oil, we continue to see a strong bid and uptrends that remain intact.

The most curious development in the past two weeks has been the rise in rates. Yes, after the Fed cut the overnight rate by 50bps and signaled the beginning of a rate-cut cycle, the market turned around and chased yields higher. It could be the typical “buy the rumor, sell the news” action or something deeper and more significant. The economy is still strong and the job market is growing. The Fed is not in a rush. They will probably cut a couple times 25bps each for the rest of the year and the market might have expected more than that. I mention the action in rates because I believe they have a big impact on what groups are leading in the market. I don’t want to be chasing strength in small caps, solar, biotech, and regional banks while rates are rallying. I would rather be long big Tech and semis with such a backdrop. If rates begin to decline, I will position heavier in biotech, housing, solar, etc., and be lighter in big tech. I might be wrong. This is how I view the market right now. 

The new venture round for Open AI and Nvidia’s CEO appearance on TV lit a fire behind the AI sector. We saw resilience in semis. AMD broke out. NVDA and ARM are setting up for a potential breakout. Energy AI stocks have been on strong run – CEG, VST, etc. AI-related stocks have been the undisputed leaders since January 2023. It all began with NVDA and SMCI but the theme was expanded into many other names and industries. It remains the biggest market theme.

In the meantime, China followed through. It’s hard to chase and keep those stocks overnight as they have big 5-10% gaps almost daily. Unless you trade them intraday or via options, which allows you to limit the gap risk, you will probably be better served waiting for some form of a range contraction or a pullback to get involved. This is exactly what I thought last weekend and guess what – most of them just kept going higher through overnight gaps. The brokerages TIGR and FUTU doubled in one week. Crazy price action. 

I recently published a few children’s books. Check them out if you have kids or friends who have kids: Investing for babies, Trading for babies, Meditation for babies. You can find my other trading books on Amazon here.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.