Momentum Monday…The Wall of Worry Continues To Eat Through Supply

Happy Monday everyone…

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It seems like every Momentum Monday since June has been the same…buy stocks!

This week looks like more of the same.

Too many sectors look good and while there is a rager of a SPAC party happening in the neighborhood, it is best to join for a cocktail or two rather than report it to the cops.

My favorite line about this came from Mike Alfred a really good investor I follow on Twitter

They’re creating money far faster than they’re creating bad companies. The nominal bull will continue for awhile.

Here is this weeks episode of Momentum Monday. I have embedded the show below:

It is best to watch/listen to each week’s episode to get a feel for how we look at the markets and momentum.

We shared a few new ideas as always.

With the Roblox IPO (gaming) ahead, expect more attention on the sector. The best looking leaders include Acivision, Take-Two and Zynga. The $NERD ETF is a gaming ETF that is an easy way to own the sector.

Here is Ivanhoff on the action:

The Senate flipped blue. The market was somehow expecting that as solar, EVs, batteries, other clean energy, cannabis, infrastructure, and Chinese stocks have been rallying ahead of that. Most of them continued higher after the election results. Many are extended for new swing entries and are likely to offer better opportunities when they pull back or consolidate sideways for a few days/weeks.

Inflation expectations continue to rise. Interest rates jumped which boosted financials. Saudi Arabia cut oil output which sent energy stocks higher. Quite a few momentum stocks that took a dive late last year, bounced towards the end of the week. In other worlds, the bull market is still strong and going.

Mega-caps underperformed last week while the rest of the market has been strong. This has been a sign of risk-seeking as of late as capital hasn’t left the market but rotated into smaller caps.

If you find yourself looking for fresh ideas or confused about what is driving the markets, look no further to the all-time high and 52 week high list.

I do that every day,

Very few investors follow this simple screen and they end up missing all the biggest moving stocks.

Take a look at the big winners from last week:

As I have been saying for weeks, the FAANG stocks have not been the story. It is Tesla, Electric Vehicles, SPAC’s, crypto, hydrogen and China web/ecommerce,

You can spend 10 minutes on the weekend scanning the Stocktwits 25 (which is free) and you will quickly get a flavor of which sectors are leading the markets.

As for sentiment, I will leave you with this magazine cover overlay JC put together that sums up the negativity the overhangs the country:

The markets are cruel. It feels like they have become more cruel since 2008. My job is to not judge the market but to try and participate.

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