Author: Ivanhoff

The charts in this video are powered by MarketSmith

Momentum stocks were on absolute fire last week and accelerated their ascent – software (FSLY, APPS,VRNS, MDB, WDAY,IGV, etc.), cybersecurity (HACK), anything cleantech (especially solar TAN and fuel cells like PLUG, BE, BLDP, FCEL), social distancing (PTON), e-commerce (CHWY, RVLV, ETSY, SHOP), e-sports and games (SKLZ, NGMS, PENN, CRSR, DKNG), online payments (SQ, PYPL, PAGS, STNE, ADYEY), real estate software (RDFN, Z, FTHM, EXPI, IPOB), select biotechs (TGTX, SGTX, BTAI, IONS, SAGE, RARE, ITCI), homebuilders (NAIL). Gold and silver also started to move as it became clear there is an agreement for a new stimulus. Bitcoin broke above 20k. Even some of the mega-cap like AMZN, AAPL, and MSFT woke up. The U.S. Dollar made new multi-year lows.

Many momentum stocks are looking extended for new entries here. I wouldn’t advise chasing stocks that are up multiple days in a row and 20-50% in the past 1-2 weeks. We certainly noticed an uptick in volatility last week – there were quite a few failed breakouts and reversals which means many people are anxious to take profits quickly. Capital is not leaving the market. It is just rotating very rapidly. There is still a good number of decent long setups and they might just continue to work into the end of the year. Until all major indexes’ 5-day EMAs are above their 20-day EMAs, we should be focused on long setups.

Try my new subscription service which includes a private Twitter feed with option and stock ideas, emails with concise market commentary and actionable swing, intraday, and position trade ideas, the Momentum 50 list of market leaders, and much more. See some of the recent testimonials.

PERFORMANCE

Here’s a Google spreadsheet tracking all closed option and stock ideas shared on my private Twitter stream and emails for subscribers.

Check out my free weekly email. to get an idea of the content I share with members.

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


The charts in this video are powered by MarketSmith

It is truly astounding how well the indexes are holding considering the recent vast increase in supply via widely popular IPOs like AirBnB and DoorDash which were given very generous valuations and the billions poured in hundreds of SPACs that are going to bring public many private companies that would have otherwise never had the chance to become public. There will be many clunkers among them. Probably 80% of the SPACs will eventually lose more than 80% of their initial valuations or worse so you better have an exit strategy instead of blindly trusting a good story.  Among the rough though, there will be some diamonds just like Amazon and Priceline in the late 90s. 

We are still in the proverbial market of stocks environment. The mega-caps like AMZN, NVDA, MSFT, FB are struggling and cannot follow through while smaller cap stocks have been on absolute fire, including some little expected industries like oil & gas and even uranium stocks. Don’t get me wrong. Capital is not leaving all large caps. It is just rotating into stocks with fresh catalysts: 

• Disney (DIS) broke out to newe all-time highs after announcing new content
• Toyota  broke out to new all-time highs after revealing a car battery that can bee fully charged in 10 minutures and lasts for 300 miles
• Starbucks (SBUX) broke to new all-time highs after revealing their new growth strrategy. 

In other words, the market is in a good mood. It is not looking to punish stocks for the slightest misstep. It is looking for a reason to send them higher.

Try my new subscription service which includes a private Twitter feed with option and stock ideas, emails with concise market commentary and actionable swing, intraday, and position trade ideas, the Momentum 50 list of market leaders, and much more. See some of the recent testimonials.

PERFORMANCE

Here’s a Google spreadsheet tracking all closed option and stock ideas shared on my private Twitter stream and emails for subscribers.

Check out my free weekly email. to get an idea of the content I share with members.

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


The charts in this video are powered by MarketSmith

The main stock indexes continue to make new all-time highs while the majority of the largest companies are underperforming. Apple, Amazon, Facebook, Nvidia, Netflix, Facebook haven’t advanced an inch for the past three months. Google has done a bit better but nothing to rave about. The lackluster price action in mega caps can mean one of two or possibly both things:

1. People are seeking more risk and therefore, selling the biggest and strongest companies and venturing out further on the risk curve to capture a higher return.
2. The biggest companies can wake up and try to catch up with the indexes for the rest of the year.

In the meantime, the market is pricing in a potential normalization in the economy. If you look at the best performing stocks ever since Pfizer and BionTech announced their working vaccine, you will notice that it is all about the old-economy – energy, transportation, financial, leisure, industrial metals, retailers. All sectors that were hit hard in the first half of the year, have been shining as of late while intererst rate have perked up and the U.S. Dollar has been diminished. 

We continue to see elements of mania in select pockets of the market. A few weeks ago, it was all about electric vehicles and anything related to clean-tech. So many of those stocks doubled and even tripled in a couple of weeks or so. Many have since pulled back substantially, but still remain in uptrends, so we will keep an eye on them if they offer an excellent risk-to-reward entry. The manic hot money has most recently shifted to SPAC stocks. SPACs are special purpose acquisition companies, essentially blank check companies formed to merge or acquire with a target business or in other words, bring a promising private company (often a start-up) public in the fastest possible way. DKNG and SPCE were among the first companies that use the SPAC model to become public. They have been followed by hundreds more. I’ve already highlighted the most interesting and promising names – FEAC, LAZR, IPV, TRNE, LCA, SBE, MP, JWS, IPOB, IPOC, etc. I am sure I am missing many and I will discover them along the way. I am not going to sugarcoat it – there’s certainly a lot of froth in the space but as active traders, we have to be paying attention to where capital is flowing and be in that space, so we are doing exactly that but in a measured way.

Try my new subscription service which includes a private Twitter feed with option and stock ideas, emails with concise market commentary and actionable swing, intraday, and position trade ideas, the Momentum 50 list of market leaders, and much more. See some of the recent testimonials.

PERFORMANCE

Here’s a Google spreadsheet tracking all closed option and stock ideas shared on my private Twitter stream and emails for subscribers.

Check out my free weekly email. to get an idea of the content I share with members.

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