Daily Market News - 21st July 2022
Tactical Rebound Charts
If you picked up last weeks letter and bought up Financials, congratulations. I hope you’ve done well.
This week I’m going to keep things brief and just get straight to the point.
There are stocks rebounding from key price levels, July’s been great so far and we’ve seen many stocks put in strong bear market rallies.
To quote myself last week.
“If we’re not looking at great stocks that are down 70-80% from their highs, then what the F@*$ are we even doing”
The message from the market is pretty clear.
Dollar down = Stocks up. Sometimes we just don’t need to over complicate it.…. and if that fails, we can all sleep safe and sound in the knowledge that we can just follow Nancy Pelosi into her trades.
So let’s look at a few charts.
Netflix (NFLX)
Netflix reported earnings this week and the general feeling is the numbers were bad, really bad.
They were just less bad than feared, and sometimes that just makes sense for price to go up.
The commentary on my chart was provided to our clients/members LAST week and we’re now potentially breaking out.
Semiconductors (SMH)
Something I learned from the 2020 Covid Crash is to never get married to a bearish thesis, because stocks will bottom LONG before you see the headlines in the mickey mouse mainstream financial media.
Nancy’s been buying semis, in the last couple of weeks we’ve put NVDA and NXPI to our clients which are both up massively, if SMH can hold onto that $224 level, I’d be slightly more hopeful of a rally beyond the few days we get here and there.
Consumers Spending
How about online retail and consumer discretionary. They’re still being crushed right?
Wrong.
They stopped going down last month
Conclusion
Let me be clear, I’m not saying the market has bottomed, or even the charts all laid out above have bottomed, I’m just saying I’m open to the possibility because I know the market is forward looking.
I know the market could completely tank any minute but there are tactical opportunities for those willing to look a little deeper.
It’s an incredibly complex environment and managing risk is absolutely key.
Being an investor with no stop losses is all good and well when stocks are going up, but many investors who taken on too much risk and bought non profitable Tech are now out the game forever because of the harsh lessons of the last 6 months. So please do consider managing risk, because it matters.
I laid out a lot more charts below at the weekend, feel free to check that out.
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