Three of the Hottest New Foreign Stocks

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Here are three of the hottest new foreign stocks in the market. They all have high relative strength, small float, and belong to a currently hot industry.

STNE is the Square of Brazil. It has recovered from a 50% slump in December and consolidating near its all-time highs. Due to their small float, recent IPOs tend to get hit hard during severe market corrections. They also tend to be among the strongest performers when the general market bounces.

QTT is a Chinese entertainment platform with insane sales growth. It is setting up near its 50-day high a few days before its next earnings report.

NIO – The Chinese Tesla broke out from a long base last week and it continues to act very constructively.

Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

Momentum Monday – China, Brazil, Software

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The small-cap index, Russell 2000 (IWM) is up 18% for the year and kissing its 200-day moving average. The market continues to react mostly favorably to earnings. Market breadth hasn’t been so good in years. We see strength in so many different sectors and countries – solar, biotech, enterprise software, semiconductors, gold, palladium, Brazil. Even Chinese names have started to break out and hold their gains. It’s hard not to be bullish in this market environment.

I will be watching closely how the SPY will react near $280, which has been a major area of resistance for a long time. If it breaks and holds above it, there are no significant stops before new all-time highs.

Check out my latest book: Swing Trading with Options – How to trade big trends for big profits.

The Five Strongest ETFs In The Current Market

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I ran a screen looking for relatively liquid ETFs with a relative strength above 90. A few themes stand out: palladium, gold, Brazil, marijuana, and software.

This list can tell us how financial markets are seeing the world in the next six to twelve months.

Two of the leaders are precious metals that typically go up when inflation and political turbulence expectations rise. What’s even more interesting is that palladium and gold have risen despite of a relative strong U.S. dollar.

Brazil has a new President, who is supposedly pro-business.

Marijuana is a brand new industry that is just entering the investable universe of many money managers. It could also be just another fad. No one really knows. Things always look easy and clear in hindsight.

And software, which has been leading since early 2018. – the upgrade cycle in the corporate world continues with full force. One sector’s rising expenses are always another sector’s rising revenues. Enterprise software companies have been big beneficiaries in the past year or so.

Keep in mind that MJ, PALL, and PSJ are the only non-leveraged ETFs on the list. Leveraged ETFs are good short-term trading instruments. They are rarely good long-term investment vehicles. In fact, all leveraged ETFs are structured to lose money over time.


Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

Momentum Monday – The Next Sector Rotation?

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U.S. stocks continue to climb a wall of worry. SPY is already up 20% from the Christmas lows and is quickly approaching $280, which has been a major area of technical resistance in the past year.

While tech stocks are taking a little break after a strong run in the first few weeks of the year, we are starting to see quite a few other sectors breaking out and setting up – biotech, healthcare, transportation, energy, financials. Things are almost too good to be true.

Check out my latest book: Swing Trading with Options – How to trade big trends for big profits.

Three Stocks Setting Up for A Potential Breakout – NFLX, ISRG, DLTR

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December retail sales came at -1.2%, which is the worst drop in nine years. The market didn’t care much. Dip buyers stepped up and bought the dip in many technology, energy, and healthcare stocks. Positive reaction to bad news is a sign of confidence and optimism. Sentiment and momentum are what matter the most to traders because the market is a voting machine in the short-term.

Here are three stocks in a tight range contraction, which might lead to a breakout and another leg higher:

Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.