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The price action is still dominated by frequent and fast sector rotations from inflation to tech and high-yield names and back.
Housing names had a strong week – we bought NAIL at 88, sold some near 92, holding the rest for a potential move to 100.
Industrial metals showed notable relative strength with breakouts in steel, copper, aluminum names. We capitalized on that with X and FCX calls. Some of them are still looking attractive going into next week but if declining interest rates can be a headwind.
Falling interest rates are positive for richly valued high-growth stocks – typically software and semis. We saw a strong earnings reaction in many software stocks this quarter. U and PLTR broke out. SNOW followed. PLTR is looking promising for the next week if it can clear its highs from Friday. The same can be said about TEAM and ZI.
Small caps are still weak and that won’t change until IWM goes above its 50-day moving average. Oil, clean energy, and reopening stocks like airlines and hotels. It seems the market is still worried about Covid.
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