The S&P 500 finished June at its highest level ever. For the first time since August 2020, however, this was a new monthly high that was not confirmed by the equal-weight version of the index. Moreover, it was the first time since Sep 2018 that the equal-weight version of the index was actually down (ever so slightly) for a month in which the S&P 500 made a new high. This is evidence of a market that has lost some of the harmonies that helped sustain strength in recent months.
It takes time to learn the intricacies of a topic.
For those who've spent a good deal of their career working with other asset classes, the lingo that youngsters throw around while discussing their favorite crypto projects can be daunting.
There are dozens of indicators you've likely never seen.
People are sharing charts where you may not even know what's going on.
And there's arguably more noise to deal with in this space, more so than any other group of assets.
But I think we can all take solace in the fact that no one is a complete expert in this stuff.
Once again this month, I’m going to share info on positions that were closed in the month of June. As a reminder, our exit plans are always laid out ahead of time in each trade idea we publish. In every case, the exits mentioned below were all in accordance with the plans as laid out.
As we head towards July expiration, we have six open positions remaining with expiring July options.
June 2021 is officially over. And what does that mean? For starters, it means that we have monthly closing prices (you know how much we love those). And what this also means is that 2021 has six months remaining.
Time is funny that way, it can feel like it's going fast and slow at the same time. But we gotta do what we gotta do. So we will gladly look at the monthly charts and keep our long-term views in check while deciphering short-term moves.
This is a recap of what has happened over the past six months, in a nutshell. For more comprehensive insights, watch out for our Monthly conference call next week!
You guys see that massive spike in inflows of Tether into exchanges?
Exchanges just saw their 3rd largest inflow of Tether of all time (and by all time, we mean a few years - this is Crypto we're talking about).
The thought process here is that if people are transferring their Tether into exchanges, they're getting ready to load up on these crypto-assets, driving prices higher.
The last time an inflow of this magnitude took place, Bitcoin nearly doubled in a matter of weeks.
A strange thought occurred to me as I was cracking eggs into a well-seasoned pan over the weekend: cast iron pans and technical analysis have a lot of similarities.
This might sound a little crazy, but the idea is worth pursuing. Bear with me while I give it a shot...
Growing up, my family didn't often use cast iron pans. They had a reputation for being hard to use. On the rare occasions that I did use one, food would burn and stick to the pan. So I was stuck with inferior results and lots of cleanup.
We preferred Teflon-coated cookware. Teflon benefitted from great advertising and the promise of progress. They seemed miraculous at first. But the coating would chip over time and bits of it ended up in the food. Still, the cast iron went unused.
But our problems with cast iron had nothing to do with the material. It was how we were using these pans that caused our issues. We didn't understand how we needed to season a cast iron pan with oil. Also, using too much soap on clean up destroys the finish you worked to build up.
This is a quick follow-up to discuss a hot stock from a leading industry group... And of course, it's presently offering us a skewed risk/reward. At the end of the day, that's all we're really looking for!
On the surface, this company is just an old LED light and radio-frequency device maker...
But, that's not the whole story.
They actually manufacture and sell some of the most important inputs and materials for a variety of burgeoning growth industries.
While a seemingly favorable fundamental story is always nice to have as a potential catalyst, it is never enough. For us, it's all about price.
Speaking of which, let's dive in and see what the charts are telling us.
Earlier this week we shared a couple of trading ideas in the Commodities space. While Cotton as a commodity continues to shine through, we're seeing some movement in the related stocks as well.
Today we're here to connect the dots and see the impact of the rise in commodity prices on the related stocks.
So let's dive in!
Cotton has been positive in the recent past and has been achieving its targets. What we're seeing right now is an almost 8-year base breakout in the commodity! You can see the clean move and breakout on the monthly chart below. With that said, the long-term trend of this commodity will remain positive so long as it trades above the level of 24,225.
New highs are not expanding, but neither are new lows
Housing costs fuel inflation but bonds are unconcerned
Risk on/risk off in neutral but broker dealers threaten break down
As 2021 began, the strong trends that emerged in 2020 were intact. But as we get ready to make the turn to the second half, we find ourselves looking at a muddled mess of stalled out trends and conflicting signals. How these resolve will go a long way toward dictating the paths that the market and the economy take over the second half of the year.
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Check out our latest Mystery Chart!
What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.
This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.
It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!
The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.
While you can try to guess the chart, the point is to make a decision…
So, let us know what it is… Buy, Sell, or Do Nothing?
