Sometimes, stocks you want to own give you no chance to get in comfortably. They just start running and offer you no pullbacks to buy into. In hindsight, these are always the ones we wished we woulda just closed our eyes and hit market buy on. Of course, in real life and in real time, it's impossible to know when you're looking at a stock that is going to run straight up. One such stock that has given me a little of this FOMO (fear of missing out) has recently offered us a slight window to buy into. And at the time of this writing (Monday morning, April 22), S&P Futures are indicating a gap down opening for the broader market, perhaps adding to our chances of getting in at a better price.
Interest rates all over the world made new lows last month and have since then tried to start a recovery. We're seeing this across the developed world in the U.S., Germany, UK and Japan, among others. Meanwhile, journalists at Bloomberg Business Week decided to put a dead dinosaur on the cover of the latest issue asking, "Is Inflation Dead?"
How come we never hear that in the financial media? Because they don't want you to say that.
How come we never hear that from the sell side analysts? Because the institutional customer will just call another desk at another firm with an analyst that has an opinion, and they will get the trade and earn the commission.
As humans, we're just not built for this. It's hard to admit you're wrong and move on. But the truth is that none of us know what is going to happen next, especially in the market. So to admit that you don't know is not only okay, but is actually fact.
In this video I sit down with David Keller to discuss this very topic:
A stock of interest for us recently impressed investors with their latest earnings report, sending shares on a gap higher at the open today. Now that the event is out of the way, options pricing (in terms of volatility) has collapsed, giving us a great opportunity to participate in what looks like an ideal candidate for a "Post Earnings Drift" move higher.
A big theme for me this year has been the US Dollar and how it will impact stocks as an asset class. The thought process coming into 2019 was simple. The Dollar had rallied throughout 2018 to reach some pretty critical levels. The idea was that if the Dollar was going to rip right through there, it was more than likely happening in an environment where investors would be fleeing to safety. That's the type of market where stocks are selling off. The opposite of that argument was that if the Dollar was not breaking out, that stocks would likely be doing well, both in the U.S. and more importantly globally.
For those new to the exercise, we take a chart of interest and eliminate the x and y-axes and and all labels eliminated to minimize bias. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.
The point here is to not guess what it is, but instead to think about what you would do right now.Buy,Sell, or Do Nothing?
This week on the podcast we have the pleasure of chatting with Craig Johnson, Chief Market Technician at Piper Jaffray. I've known Craig for a long time and love the work that he puts out. During the day he speaks to buy side clients all over the world. As a past president of the CMT Association, he has surrounded himself with some of the best minds in the history of technical analysis. His perspective based on who he speaks to and his experiences throughout his career make me want to listen when he has something to say. In this conversation we discuss the rest of the year for U.S. stocks and sectors. There's a part in this episode that focuses on breadth and what we're both looking for moving forward. Inflation, or lack thereof, is something he's watching, so we talk about Gold, Oil and other inflationary factors that could impact stocks and bonds. We covered a lot. I really enjoyed this one!
