US stock market has regained momentum after Reddit distraction which almost shocked big money and regulators.
Reddit exposed the abuse of short trading strategy where hedge funds went overboard and bragged about their short position in media and scared small investors.
Reddit gave small investors collective power of pooling funds to alter or impose their will on stock market.
Reddit also exposed how flimsy Robinhood set up was as they had to stop trading in many stocks and had to shore up their capital by $3.5 billion dollars.
That was then and this is now.....
S&P 500, Nasdaq and Russell 2000 roared into all time highs once everybody understood that power to manipulate stocks are now in many arenas and can result in huge losses IF not on close watch by regulators.
SO how does US stock market looks now, here is the RSI read now :
Russell 2000 70.40
Nasdaq 67.60
S&P 500 62.15
XLF 60.48
XLE 58.90
DOW 58.87
TAN 58.17
SLV 54.48
SOX 53.37
GLD 39.78
As you can see only Russell 2000 is touching 70 which is overbought territory. You can also see that rotation is @ play where SOX has fallen to 2nd weakest sector while Nasdaq is @ all time high.
This is a typical stock pickers market now.
All boats are not lifting now....
Most boats are digesting gains....
After doing fundamental research, it is time to put weight on fundamental research and be patient as some sectors are building a very long base like energy stocks......
Instead of daytrading, it is time to show conviction and be a very long time investor.
Market profile has changed, good ideas will work big time eventually.
Good luck with your own strategy and research.
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hi Saleem,
Last week: +3.13% (YTD: +20.98%)
Notable Winners: COTY GRWG FUBO TPR SNAP EH
Notable Laggards: TZA GRTS
It was a frustrating week for me despite the portfolio gains. There was no follow through from the prior week's declines, even for a moment, so the large TZA hedge lost money all week, and I was not as long exposed as I may have wanted. The market continues to move relentlessly forward with any kind of news, good or bad, and I think we faced down one potential scare in the short squeeze bubble and have now decisively moved onward.
SNAP was a great example of the tone of the market: a weak current quarter start and worries about medium term implications from Apple's privacy changes did not dampen the demand for the stock. Until we see negative reactions to negative news, the buying frenzy will likely continue. It seems there are very few shares of stock available for sale these days, creating outsized up-moves versus down, and we may find ourselves in that situation for a few more months until we lap long term capital gains territory for many of the huge gainers in the past year, and maybe face a higher capital gains rate in the Biden administration. Until then, it seems like smooth sailing ahead.
Holdings: TZA TPR SUMO FDX AMBA QRVO COTY EAT SIMO LYFT SNAP EH GRTS, cash 20.2%
Stocktrader
Hi Stocktrader,
Last week UP 11.39%
YTD UP 13.21%
Saleem
Hi Stocktrader,
Added 20% SU @ $17.35
Saleem
Hi Saleem,
Good luck with more SU!
Stocktrader
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