Momentum Monday – Diamond Hands Versus Nervous Consumers

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Happy Monday.

It was another crypto weekend which has become the theme again the last few weekends on Stocktwits.

Stocktwits has a rankings tab that you can check and on the weekends it has all been crypto.

As always, Ivanhoff and I toured the markets to talk about the underlying trends and momentum. You can click here to watch this week’s episode. I have embedded the show below:

Ivanhoff’s thoughts:

The price action is still dominated by frequent and fast sector rotations from inflation to tech and high-yield names and back.

Housing names had a strong week – we bought NAIL at 88, sold some near 92, holding the rest for a potential move to 100.

Industrial metals showed notable relative strength with breakouts in steel, copper, aluminum names. We capitalized on that with X and FCX calls. Some of them are still looking attractive going into next week but if declining interest rates can be a headwind.

Falling interest rates are positive for richly valued high-growth stocks – typically software and semis. We saw a strong earnings reaction in many software stocks this quarter. U and PLTR broke out. SNOW followed. PLTR is looking promising for the next week if it can clear its highs from Friday. The same can be said about TEAM and ZI.

Small caps are still weak and that won’t change until IWM goes above its 50-day moving average. Oil, clean energy, and reopening stocks like airlines and hotels. It seems the market is still worried about Covid.

I start my weekend reading and scanning the ‘free’ Stocktwits 25 list to see which stocks and sectors are leading with relative price and discussions on Stocktwits.

This chart below really stood out as a sign of the times for this market. As prices in markets including crypto keep surging, so to does the confidence of investors. The confidence of the consumer is going in the other direction…

These lines rarely diverge but this is a rare market.

Next up, Charlie has his 5 chart Friday.

Last but not least, The SPAC market has had continued momentum in the OTHER direction. It has been a mess. Nikita explains and sees a glimmer of hope and explains the potential arb at play.

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