Momentum Monday – Nothing Like Price to Change Sentiment

Today is just another reminder that nothing changes sentiment more than price.

Remember Amazon hitting $1 trillion a few weeks ago and nobody was willing to part with their Amazon shares?

It has now shed $250 billion and people are barfing up the stock like it is poison.

Don’t get me started on HODL and last years crypto fever.

I hate losing money and I never sell enough on the way up, but the fever in the Nasdaq and S&P was raging. We were due for a smackdown.

Timing the smackdown is what I will never get right (at least for a living). The Nasdaq could have ran straight to 10,000 before this selloff started. I was ready for it, but I am not shocked that now it may take years.

As it turns out, the last person the market needed to tame was Fat Nixon. He will never admit it and he already has his scapegoat lined up in the FED (though he hired the Chairman) and the Honduran caravan, but he was pathetically tying his performance to the stock market. All that is left now is rhetoric and panic and blame.

The good news is that America is great. Not perfect and sometimes horrible, but great.

As America moves on, the markets will do what the markets will do.

Today, Ivanhoff and I put together our ‘Momentum Monday’ in the morning. The markets were up for whatever reason, but by the close it was a mess once again.

There are two types of stocks that outperform after a big market correction:

1) The ones that got hit the worst. (see Internet bubble)

2) The ones that held the best (where I focus).

In this episode of Momentum Monday (click here to listen/watch), we took a quick look at some of the stocks that might turn into potential future leaders and we commented in the price action in popular stocks like McDonald’s (long), Walmart, Apple (long) and Starbucks.

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. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

PS – Netflix and Amazon while down 25 plus percent very quickly are still up 30 plus percent in 2018.

PSS – The poster stocks for this crash are millennial favorites Nvidia and Advanced Micro Devices. Both have been absolutely demolished in October giving up all their gains this year. These type of moves really do scare people and create the fear we need to start a bottoming process.

PSSS – Schwab emailed customers (shared by my friend Peter) this ‘What to Expect in a Global Bear Market (20-30 percent late)…this does not happen at the top and likely towards a bottom:

Also published on Medium.