Weekly Roundup: Chip Rout Tests the Market, but Here’s How We Aim to Capitalize
We raised a few price targets, added to three holdings, and locked in big gains in another.
VIDEO: Our Game Plan for a Nervous Stock Market
Here are the key technical levels we’re watching and why Google’s earnings next week will be important.
New Netflix Price Target Amid Mobile-First Transition
Here’s what we’ll be watching to determine the position’s place in the Portfolio.
Our Arguments Are Starting to Play Out
This week we argued that:
* With everyone on the same side of the bullish boat (in a market dominated by passive products and strategies) and with an increasingly casino-like backdrop of momentum-based buying (as a template see “The CNBC Panelist Said What?” (specifically, the poster child Jim Lebenthal’s “FOMO” buy of Micron at $1,200 recently), including the proliferation and popularity of leveraged ETFs and 0DTE options) — equities remain vulnerable to a market structure event.
* At the very least, we anticipated a wild setting of dramatic rotation in sector form factors and that is what we have gotten in the last week. Stocks are moving in integers — in the sort of volatility market participants are not accustomed to.
* Specifically, we expected the heady swing back into hyperscalers was likely to reverse. (Google’s ($GOOGL) announcement of technical problems with Gemini served as a catalyst yesterday.)
* We thought a correction in hyperscalers coupled with a large correction in the over-hyped leadership in memory and semis could contribute to a substantial fall in the Nasdaq. This is what we have been seeing in the last three trading session.
* We warned that the IPO market’s heady activity would backfire on investors. Yesterday SpaceX ($SPCX) (one of our shorts) broke its IPO price. Standard Nuclear ($STDN) and Csquare ($CSQR) joined SpaceX by breaking below their IPO prices on Thursday.
Again, this is a great environment for dispassionate and opportunistic traders but a lousy setting for the buy-and-hold crowd.
Position: Long GOOGL (VS); Short SPCX (S)
Don’t Be Fooled. There’s Ugliness Hiding Under the Surface.
The indexes Thursday did not reflect the carnage in recent leaders and chip names and the ‘aroma of fear.’
Gemini Launch Delayed
Break in!
Google ($GOOGL) delays the launch of Gemini after the technology falls short of its internal goals.
Google Gemini Launch Delayed as Tech Falls Short of Internal Goals – Bloomberg
Share reverse hard.
Position: Long GOOGL (VS)
Opportunities Are Developing as Rotation Action Hits Again
Here is an example of some trading tactics I’m employing on a new position.
Chips Under Pressure as Rotation Remains the Key Market Theme
This is not unhealthy action. Here’s how I’m playing it.
The Casino Is Open
The imbalance and spastic relationship between memory/semis (weak) vis-à-vis hyperscalers (strong) continue today.
Like a baby splashing in a bathtub, the situation is changing daily.
Tough to evaluate and trade on an intraday basis.
I am long ($AMZN), ($GOOGL) and ($MSFT) and I am short a basket of semis and memory stocks (e.g ($MU) ($SNDK) ($INTC) ($AMD) ($AMAT).
Positions: Long AMZN VS GOOGL VS MSFT VS; short MU VS SNDK VS INTC VS AMD VS AMAT VS
Holding My Nose and Taking a Quantum Leap of Faith on IBM
It’s looking ugly out there for ‘Big Blue,’ but here’s why I’m not ready to bail just yet.