Expect better days ahead, but extreme turbulence first as we head into critical FAAMG Earnings this week
Rhetorical Question: Can we rally or get some relief? (Like this email for a relief rally)
Dear Public Investment Community,
Despite sharing commentary inside my Patreon Investment Community to caution on positioning as S&P 500 dipped below 4500 and taking precautions to reduce exposure on tech names (think NVDA/SHOP/ROKU/PYPL) that rebounded significantly in the late part of March/early April, this past week still proved to be an especially painful week for me personally.
I had repurchased partial positions in these names at 15%+ discounts after their retracement from recent local highs, and yet these positions are down at least 10% due to the continued selling pressure.
Just my luck. 🤦 But hey - at least I was able to lower my cost basis without taking the whole swing down.
My research provided inside Patreon, if followed carefully, has helped our investors navigate the larger pivot points in the market (see below)
(As discussed inside my 1st Half Bi-Weekly April Research Update 4.1.22-4.15.22)
That said, I’m not a frequent trader - and unfortunately - even though I advocated for risk-reduction and followed through on them, my existing core positions still got hammered.
But good research advice is still good research advice, so I’ll take an L (temporarily!) if that means my community received proper guidance to psychologically prepare.
Let’s recap what happened this week:
My tech darlings got slammed - we’re talking about SHOP, NVDA, AMD, GOOG, MSFT. Everything now seeing RSIs near 30 (a bounce coming?)
China continued facing headwinds, but was up on Friday - do you know why?
Even value stocks UNH, JNJ, CAT, BRK.B got hit hard later this week (responsible for Dow’s 900+ point drop of into the abyss this Friday)
The 10Y continues to stay stubbornly elevated as Jay Powell reiterated the potential for a 50BP hike in May.
Most scary event of this week was the fact that real rates are starting to be positive, and that would be a truly big headwind for the market.
Russia-Ukraine crisis showing no signs of improving. How the U.S. gets so much support to keep funding this crisis is beyond me (but hey- we’re not here to talk politics).
Look folks, you may have observed from all my public commentary and private commentary inside Patreon (if you’re a member), that I’m much more biased towards being optimistic rather than pessimistic.
Nobody likes a downer.
That said, this week’s dramatic U-Turn since Jay Powell publicly discussed about 50BP hikes has now sent the major stalwarts (FAAMG) into major support levels right ahead of two major catalyst events.
1.) Earnings
2.) May Fed FOMC
So be a little (actually very) careful.
While I usually like to provide a weekly forecast or near-term forecast, doing so at this moment in time is far too difficult with potential pivots in every single trading session of this week.
This week will be evaluated by a day-by-day basis. My intermediate-term investment frameworks will not be able to forecast anything meaningful in an environment where every trading day is dictated by a new catalyst.
I believe the next 10-14 trading days will determine whether we rebound back above 4500 SPX or below 4100 SPX.
Over the next two weeks as we navigate these catalysts 1.) FAAMG Earnings and 2.) May FOMC inside my Investment Community, I plan to give more frequent updates daily inside our Discord news feed (if and when appropriate).
When stuff gets volatile, I tend to add more commentary than my usual Bi-Weekly formal updates inside Patreon. I’m sure my members appreciate it. And if I were a member inside my own community, I’d appreciate it too!
That’s just how I am as a person (a Youtube video about my story), and why I believe my values position me to best help you guys succeed.
I absolutely detest focusing on short-term price action, and really try to not talk day to day events, but given the high anxiety in the market place right now (and probably you if you’re reading my email), I will do my best to provide thoughtful guidance so that we don’t make the wrong move in this environment. Join my community if you can - I want to help you during these crazy times.
Press the like button on this email to tell the bulls to come back to markets this week. 😊
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