Ivanhoff Capital

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The bad news keeps coming, the market keeps rising. Less than two years ago, the mere mention of more tariffs on China was enough to send the market in a tailspin. Now, they want to delist Chinese stocks from the U.S. stock exchanges and the Nasdaq 100 is within 3.5% of its all-time highs.

Biotech and software stocks have been on absolute fire – squeezing naive short-sellers who are trying to trade rationally in an irrational market. Stocks can still go higher as the current mentality is to buy the dip and mentality doesn’t change overnight. What typically changes are the market leaders as rising markets often digest gains through sector rotation.

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Warren Buffett continues to sell. After selling his entire stake in airlines, his last 13F shows that he has decreased his position in financials (GS and JPM). And this from a brilliant guy whose favorite holding period is forever. What is he seeing that the rest of us are not?

Another legendary money manager, Stanley Druckenmiller said the current levels for SPY offer terrible risk/reward for the bulls.

David Tepper chimed in with “ I haven’t seen the market so overvalued since 2000”.

And yet, the dips continue to get bought. The number of stocks making new 52-week high is increasing and so is the number of long setups. Biotech, software, gold, and silver have been notable leaders for the past few weeks and they are likely to continue to shine in a strong or even neutral range-bound tape.

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

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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.

The charts in this video are powered by MarketSmith

The Nasdaq Composite is only 10% away from hitting 10,000. Less than 2 months ago, it was at 6600. The velocity of the correction and of the recovery has been of epic proportions. Something future generations will talk about and study.

The main story from last week is the notable shift in market sentiment. Look at the crazy reaction to ordinary earnings reports. The earnings season started slowly with banks bombing and large-cap tech stocks line NFLX, AMZN, and FB either gapping down because of their big pre-earnings rally or slightly gaping up and getting faded. Then it came last week. Not only we saw stocks like AYX fully recover after guiding lower but we also witnessed some of the most epic short squeezes that led to 20-30% daily moves. 

The sentiment has basically shifted from people getting scared from each 1% down move and running for the hills to feeling extremely comfortable buying dips. Maybe this is the time when they pull the rug underneath everyone’s feet but I would not hold my breath for it. The price action is currently constructive and there’s no wisdom or glory in fighting the tape. I can change my market view quickly when the facts change.

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