Momentum Monday – Melt Ups and Melt Downs…
Courtesy of Howard Lindzon
Happy Monday…
What a time to be alive gambling, speculating and investing.
Anything goes!
This weekend I watched a bunch of my buddies in their 50’s live betting sports from three different apps.
Elon Musk was deciding on how to pay $20 billion in taxes on Twitter.
Thank goodness we are focused on ‘payment for order flow’ and confetti on the Robinhood app.
As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from Marketsmith.
As always, Ivanhoff and I toured the markets discussing momentum. The melt ups and melt downs are really epic this year and last week was no different. You can watch/listen to the episode here on YouTube. I have embedded it below on the blog:
Here are Ivanhoff’s quick comments…
The speculative juices are running high. The small-cap index, Russell 2k broke out from its 8-month long base and it hasn’t looked back. Maybe, this explains the resurrection of the so-called meme stocks – CAR, GME, AMC, BBBY, etc.
The Nasdaq 100 keeps making new all-time highs, led by semiconductors (NVDA, AMD, SMH) and mega-caps like TSLA, GOOGL, MSFT, AAPL, FB. Even AMZN and SHOP which missed earnings estimates are rising and acting constructively. All news is good news in a bull market.
The S&P 500 is also moving up. Pfizer’s antiviral pill news fueled a rally in reopening industries – leisure, travel, entertainment. We saw big jumps in ABNB, LYV, JETS, LYFT, UBER, SBUX, DIS, BA., etc. In addition, the infrastructure bill finally passed Friday night and might stir some upside action in steelmakers like X, CLF, NUE, equipment manufacturers like CAT, GE, the entire construction space, and some clean energy stocks like BLNK, CHPT, WBX, FCEL, BE, etc. The question is how big will those names gap up on Monday and will we see an initial “sell the news” event?
To top it off, even the perennial dogs, cannabis stocks woke up on Friday. MSOS, GRWG are two ways to play that move.
The FOMO is palpable. One can make the argument that there’s some element of froth in the current tape and complacency often leads to a rug pull. Don’t rush too much with contrarianism. Remember that bull markets correct through sector rotation. This means the indexes can continue higher or dip very little while select sectors and stocks have a more sizable pullback.
I am licking my wounds in Zillow and Peloton…grateful I have some wins to balance them out for the tax man.
Elsewhere…
Here is the Stocktwits 25 momentum lists.
Nikita has her weekly update on SPAC’s.
Have a great week.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.
