Momentum Monday – Down Goes Crypto…Up Goes The Gap?

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Good morning everyone.

Gravity won another battle this week….with crypto.

This week we will see if the markets care.

As always, Ivanhoff and I Zoomed an episode of Momentum Monday. You can watch/listen right here. I have embedded it below:

Here are Ivanhoff’s notes…

The main stock indexes – S&P 500, Nasdaq 1000, Russell 2k finished last week where they started. In between, they had a hiccup and several mini sector rotations.

Many of the best-performing stocks from 2020 have been major laggards in 2021 – solar, EVs, SPACs, software, etc. Those same 2021 laggards finally woke up last week and started to perk up. The most shorted stocks shone the brightest which is a sign of returning risk appetite. Curiously, it coincided with a rout in the crypto space. It’ll be interesting to see if this development will continue. In the meantime, many of the leaders of 2021 – homebuilders, metals (copper, steel, aluminum, gold, silver, etc.), retailers, financial, oil stocks pulled back, mostly to their rising 20 and 50-day moving averages.

To conclude, last week was a mean-reversion week and the choppy range-bound action is still dominating. One positive development is the emerging markets in several growth stocks like RBLX, UPST, PATH. The list is not long but at least it is not non-existent. The tech sector has stabilized and we are starting to see some positive consolidations in the space – FB, GOOGL, AMAT, ASML, NVDA, etc.

Charlie’s 6 chart Saturday was most excellent this week.

The Stocktwits 25 tracks the current momentum in the markets and while the yoots have been mesmerized by crypto and meme stocks, the elders have been printing money with energy and the retailers that don’t do e-commerce very well. As always, the markets move in mysterious ways and it pays to follow the prices, not the news.

Have a great week everyone.

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