Author: Ivanhoff

MarketSurge powers the charts in this video.

Most stocks accelerated their ascent after the election results. Not surprisingly, the top performers were related to crypto—COIN, MSTR, MARA, WGMI, BITX, and Elon Musk’s TSLA. COIN and TSLA will likely be the top momentum movers for the rest of the year, and dips there will be welcomed as buying opportunities. 

Almost everything gapped up after the election. Small caps (IWM, TNA) and regional banks (KRE, DPST) had the biggest gaps but haven’t been able to follow through so far. Their near-term future will depend on interest rates. If rates finally start to pull back, we will likely see a more sustainable move in those two groups. The same could be said about biotechs. XBI finally broke out of a multi-month base on Friday. Let’s see if it can add to its gains or this will be another headfake. 

The strength was widespread last week. Even energy stocks gapped up. XLE and ERX are setting up for a potential continuation higher.

Large-cap tech stocks are also faring well after the elections despite fears of rotations and political troubles. AMZN finally broke above 200. Any pullback to 200 for the rest of the year will likely be a buying opportunity. GOOGL bounced strongly, and it is setting up for a potential breakout near 180-182. NVDA is at all-time highs despite potential issues with one of its biggest clients, SMCI.

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MarketSurge powers the charts in this video.

Many say that Presidential elections are irrelevant in the long term. The reality is that they can have a significant impact in the short-term. It is not usually to see a 5% daily move in either direction depending on how the market reacts. By definition, markets are forward-looking and try to discount any major event that could happen in the next six to nine months. Wall Street is convinced that the market has discounted a Republican win. What you should ask yourself is – are we going to see a “buy the rumor, sell the news event” if this actually happens? And what if it doesn’t happen? Obviously, we don’t need to guess. We can make our moves after the elections.

To make things even spicier, the next FOMC meeting is next week. The Fed is expected to cut interest rates by 25bps. Anything different is probably not priced and is likely to lead to a significant reaction. Keep in mind that after the last rate cut in September, rates have gone straight up. For me, this means that another decisive 50bps cut might lead to a reversal in rates. If this happens then small caps, regional banks, biotechs, solar, and housing-related stocks are likely to outperform. I will wait for the market reaction first.

In the meantime, we are still in the midst of earnings season which always brings an extra level of volatility. META, MSFT, and AAPL sold off slightly after their earnings last week. GOOGL gapped up but it gave up its entire gap. AMZN also gapped up near its all-time highs around $200 where it has stalled for now. Closing above 200 can potentially lead to a rally to 220 in November. One of the strongest Mag 7 stocks after earnings this season is TSLA. We saw a significant 2-day rally followed by a 5-day pullback. Let’s see if the earnings gap holds here. It seems the upside gaps in strong stocks have been used to take profits as there hasn’t been much follow-through past the first and second day after earnings.

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.

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You can find my trading books on Amazon here.

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.

The future is already here and is already reflected in stock prices. TSLA crushed estimates and mentioned that their goal is to make two million units a year of their driverless taxis. Gapped up and never looked back. Now, it is hovering near its 52-week highs. In the meantime, Google’s self-driving company Waymo is already working in multiple cities and the reviews by people who used it are overwhelmingly positive. GOOGL is also setting up for a potential breakout ahead of its earnings report next week. 

Other notable earnings breakouts from last week include PM, RSM, LRN, VKTX, and CLS. If the general market doesn’t sell off harshly, the dips in these stocks are likely to create great buying opportunities in the next two months or so. 

In the meantime, the volatility in the market is picking up. Rates are perking up. Stanley Druckenmiller said a few weeks ago that one of his biggest positions is short US Treasuries as he believes that deficits and inflation are going to increase under both candidates. If he is right, it’ll be hard for the stock market to sustain its uptrend with rates rising. QQQ just had a false breakdown followed by a false breakout two days apart. This shouldn’t be a big surprise considering the US Presidential elections are ten days away. We have to remain nimble in the next two weeks as volatility and choppiness are here to stay.

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.

You can find my trading books on Amazon here.

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