Daily Market News - 8th Nov 2021

Is Clean Energy Next Up?

Ok, where next for the market?

Rotation really is the lifeblood of a bull market and while we never know for certain where the money is moving, like it or not, charts give us clues.

If you missed my letter on Friday re: what to look for with a market decline you can CHECK THAT OUT HERE.

Some charts individual are starting to look a little frothy, and some of the sectors that’ve ripped higher recently (semiconductors, software etc) won’t keep going up forever, so it’s time for me to step back and look at the bigger picture again.

Let me put a few charts to you.

Relative Rotation Graph (Benchmarked vs S&P500)

Let me quickly explain this 1.

It’s not a chart you’ll likely have access to, but the theory behind the rotation graph is that the sectors move in a clockwise motion through the quadrants, and move from Leading to Lagging etc etc.

It’s a useful visual because the centre point is the S&P500 and if we know which areas are likely to outperform the S&P500, half the battle is won.

As we can see from the below chart, the Airlines, Travel Tech, Leisure etc have been poor performers, but over the last week, these areas are now starting to look interesting. I find this kinda stuff interesting but if I could draw your attention to the Clean Energy ETF, we can see that it’s an area that’s leading the market already.

Clean Energy ETF (PBW)

So what does the Clean Energy ETF Chart look like?

As the chart shows, it’s been consolidating since April, not terribly appealing on many levels, but if you’ve been doing some due diligence, there are some individual names aligned with clean energy that’ve been setting up nicely over the last few weeks.

If Clean Energy breaks out of this range above $95, there will be some great opportunities in a beaten up sector. I suspect earnings will be a catalyst in either direction for some of the more appealing names.

I’ll be watching this closely over the next week or 2. If it fails at these levels, that’s ok, because there are plenty of areas to choose from.

Lithium Americas Corp (LAC)

The above chart is a chart I put out to our clients and members on the 29th October as a high conviction Trade/Investment Alert (whatever you want to call it).

I like Lithium Americas provided it’s above $29. This is the optimal “buy point” and probably what my work is best known for.

Price is now trading up at $34 (+17%) from the alert. It’s doing very well for all my members.

If the broader market declines this week (which would be perfectly normal and healthy), LAC may offer opportunity to enter on a pull back. It could also blast off and never get seen at these levels ever again. It’s setting up to be an interesting week.

Below $29 - all bets are off.

I also put out an analysis last week for Social Media with some charts and analysis , you might some further insight and ideas by watching the video below.

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