This is the video recording of the January 6th Weekly Town Hall w/ Willie Delwiche & JC Parets
01/06/22 2:00 PM ET [Read more…]
Expert technical analysis of financial markets by JC Parets
by Peter
This is the video recording of the January 6th Weekly Town Hall w/ Willie Delwiche & JC Parets
01/06/22 2:00 PM ET [Read more…]
by Peter
From the desk of Willie Delwiche.
I recently watched The Matrix with my son.
Not the fourth installment released late last year, but the original movie – the one that came out more than 20 years ago.
One important caveat: My son is only 13. The Matrix is an R-rated movie filled with violent action scenes. So I didn’t take the decision to let him watch the movie lightly.
Ultimately, I decided the movie raises some important ideas that I wanted to share with him. I’m not talking about ideas of simulated reality or various theatrical elements. For me, one of the key insights is that by tuning out the noise, we can improve our decision making. By focusing on what matters, we have more time to act. When wisdom combines with clarity of purpose, the seconds seem to tick by more slowly.
This doesn’t just happen in the movies. Watch an experienced quarterback engineer a winning touchdown drive in the final two minutes of a football game and you will get a sense of what I mean. They seem to have more time to decide, act, and react than anyone else on the field. Maybe time is indeed passing more slowly for them.
What does this mean for those of us who are not Neo or Tom Brady?
by JC
US Stock Market Indexes can be a funny thing. As investors we need to understand what’s inside of them. Which stocks and sectors drive them higher or lower?
This seems like an afterthought in some circles, especially after the major large-cap indexes have put up nice returns the past 3 years. The S&P500, for example, was up 28%, 16% and 27% respectively in 2019, 2020 and 2021.
But at the individual stock level, it certainly didn’t feel that way in many cases.
I have a good feeling 2022 will be the opposite. I think this year, the average and median stock has a higher likelihood to outperform the major indexes, for one simple reason.
No one owns a lot of these names. [Read more…]
by JC
We’re buying an $MU June 100/125 Bull Call Spread for an approximately $6.50 debit. This means we’re long the 100 calls and short an equal amount of 125 calls
Check out our short video with the thought process behind these trades: [Read more…]
by Ian Culley
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
Downside pressure on long-duration rates and a flattening yield curve was the story of the bond market for the latter part of 2021.
But we started to see signs that downside risks were easing in the final weeks of December. The 10- and 30-year yields made a nice kick save after undercutting their summer lows, and high yield bonds $HYG began to outperform safer alternatives like the Treasury bond ETF $IEI.
It seemed like the bond market was heading in the right direction – except for Treasury spreads. The 2s/10s spread was the missing piece of the puzzle, continuing to push toward new 52-week lows…
Until now! [Read more…]
by Peter
From the desk of Willie Delwiche.
Key Takeaway: Year-end strength in stocks alleviated some of the concern that had crept into investors’ collective psyche. Short-term sentiment swings aside, investors remained positioned aggressively long stocks at a time when strategic risks remain high. December set a monthly record for equity ETF inflows and that price chasing pushed equity valuations to some of their highest levels on record. The optimism in positioning is not reflected in the sentiment surveys. But if the unwinding in the speculative bubble that peaked early last year gains steam, look for a lack of optimism to be replaced with outright pessimism, followed by a re-positioning of assets.
Sentiment Report Chart of the Week: Commodities soar but struggle for attention
After a relative lull around mid-year, equity ETF inflows intensified as 2021 came to a close. A record $90 billion flowed into equity ETFs in December and pushed the total for the year above $650 billion. Commodities continue to struggle to attract attention, despite a better performance in 2021 than US stocks. Commodity ETF flows are dominated by gold-related issues. But this too says something about the utter absence of deep-seated optimism around commodities.
If this blog post was served up to you when you were searching for the latest scare porn on the omicron covid pandemic, I’m sorry to disappoint. But if you’d like to draw a correlation between the rising omicron cases and rising share prices of Micron technology stock — you wouldn’t be the first person to commit a #ChartCrime in service of a good story.
Micron Technology $MU is a stock that’s been on my radar since the team published the Under the Hood report around Christmas highlighting the setup.
Here’s what they had to say:
From the desk of Steve Strazza @Sstrazza
We held our January Monthly Strategy Session Monday night. Premium Members can access and re-watch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.