Ivanhoff Capital

MarketSurge powers the charts in this video.

The S&P 500 had a mid-week pullback but managed to recover in the last 20 minutes of the week. Small caps, Russel 2k, outperformed on Friday, which is what we are supposed to see when interest rates are pulling back. Can they follow through next week? 208-210 seems like a major resistance and potential pivotal area for IWM. A lot will depend on interest rates. Small caps, biotech, homebuilders, and financials have been highly negatively correlation to interest rates lately. 

In the meantime, sector rotations continue with full force. While tech, software in particular, was hit hard last week, retailers and energy bounced. Consumer staples and utilities also saw an inflow. The frequent rotations in the market don’t mean that we should become complacent and just buy any dip because all dips eventually get bought in a bull market. Even in a bull market, a correction in individual stock can be deeper and continue longer than most expect. The market is designed to fool the majority.

We remain in a market of stocks environment. This time the opportunities are not only in a small number of tech stocks but more spread out in various sectors – a stock pickers market for nimble traders.

Here are links to the books mentioned in the video:

Investing for babies

Trading for babies

Meditation for babies

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I published a new trading book recently (2023). Check it out on Amazon.

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MarketSurge powers the charts in this video.

NVDA did it again. Another epic earnings report. Another gap to a new all-time high. This time, they also announced a 10 for 1 stock split. The CEO, Jensen mentioned that they are on a one-year cycle for their AI chips. Good luck to the competition trying to catch up. 

What other stocks are likely to benefit from the rise of AI – Anything needed to build and run bigger and more efficient data centers. This includes energy stocks, cooling equipment, storage devices, networking equipment, firewalls, transistors, routers, controllers, backup generators, etc. Some of the stocks that are benefiting or likely to benefit from the AI trend – MU, COHR, AMZN, MSFT, GOOGL, AMD, SMCI, NVT, CLS, etc.

Another big theme from the last week was the resurrection of clean energy stocks. Solar names have been perennial dogs for years. Something changed last week and we saw a massive rally in the sector. It was led by FSLR which is the only solar near its 52-week highs. The rest are dogs but even dead cats could bounce 50% if there’s a strong sector move – ENPH, JKS, CSIQ, SHLS, TAN.

Don’t forget that the market tends to surprise the majority and provide a rug pull when people become too complacent and enthusiastic – see the price action last Thursday. Everything gapped up after record Nvidia profits and then sold off hard only to recover the next day. Volatility is starting to pick up again. The good news is that money is not leaving the market. It’s merely rotating between sectors. The bull market is still on. We have to pay attention to the hot themes of the day and play where there’s action.

Try my subscription service which includes a private Twitter 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.

I published a new trading book recently (2023). Check it out on Amazon.

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 tape made a mockery of the so-called efficient market theory again. A stock left for dead, belonging to a bankrupt company went from 4 cents to 4 dollars within a week after a random Twitter account posted a drawing made by a five-year-old on X. Granted, that stock had a small 37 million shares float and 97% of it was short. The perfect recipe for a short squeeze. This is what attracts people to financial markets – the potential and opportunities are endless and no other work in the world compares.

The short squeezes and volatility we saw last week might be an indication of what’s to come in the following few months or they might be a warning sign for a rug pull just around the corner. The market tends to surprise the majority and go against mainstream expectations. 

While price action has become a bit frothy as of late, we remain in a strong bull market with various sectors participating. Energy has been on fire lately. Uranium has been the clear leader in the past few months, URA broke out from a long base last week. Coal has been in a pullback mode since March. Crude oil has made lower highs since April – let’s see if this will change next week. Solar has been among the worst-hit sectors since 2022. FSLR was a ray of shine last week as it continues to make higher lows and higher highs.

Nvidia reports earnings next week, on May 22nd. All eyes are on them. Expectations are high and it is not an accident that the stock tried to rally ahead of earnings. I have no idea how the market will react. My thinking is that any sizable gap (more than 4%) will be faded – upside or downside.

We are entering towards the end of this earnings season. The last to report are retailers, so it’ll be curious to see what the state of the consumer is and how the market reacts there.

Try my subscription service which includes a private Twitter 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.

I published a new trading book recently (2023). Check it out on Amazon.

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