Free Content Archives - Page 24 of 90

Feb 12

The only way to trade this “too high” market

Free Weekly Analysis:

It was another good week for the S&P 500 as it added 1.2% and continues grinding its way into the record books.

It’s only been two weeks, but the meme stock feeding frenzy is definitely over. GME retreated 89% from the highs and AMC is down 73%, with both stocks slipping another 20% this week.

It was spectacular while it lasted, but anyone with even the smallest amount of market sense knew this spectacular collapse was inevitable. The market loves symmetry and what races higher with breathtaking speed ends up crashing down just as quickly. No conspiracy needed.

As for the indexes, they are relieved the meme frenzy left as quickly as it came. The old rules still apply and conventional investors don’t need to worry about these bubbles infecting to the rest of the market. Those reassurances put the nearly year-long rally back on track and pushed the index back to record highs.

That said, most of the index’s strength is coming from beaten down, garbage stocks catching up as the economy starts rebounding from Covid. The FAANG stocks have been stuck in neutral lately, but this was expected.

The strongest stocks bounced early in the recovery and they have less room left to go. I don’t mind this underperformance as long as the FAANG stocks keep treading water. But for the entire market to start the next meaningful leg higher, we need the best-of-the-best companies to wake up and start leading the charge. Until then, expect further index gains to be slow and fitful.

If stock prices were overbought and vulnerable, we would have crashed by now. This market still wants to go higher and there is only one way to trade it. Keep holding for higher prices and lifting our trailing stops up.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 11

The stock proving me wrong

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

While meme stocks dominated the financial press over the last few weeks, an old favorite came back to life under the radar.

As the world fixated on GME and AMZ, ZM quietly went about its business, reclaiming the all-important $400 support level. This was a major technical achievement and back in mid-January I told readers to be on the lookout for it:

ZM needs to get above $380 resistance to break the larger downtrend….and this will be a lot more interesting if it gets back above old support at $400.

Now I’ll be honest, I was pretty hard on the stock back in early January because its price action was absolutely dreadful. But as opportunistic traders, no matter what we think, we need to keep an open mind when the evidence changes.

Rather than extend the selloff, ZM found a floor and actually started challenging $400 resistance not long after I wrote my last post.

I was skeptical about this bounce at first. But as I wrote in January, getting above $380 broke the downtrend and things really started looking good once it reclaimed $400 last week.

If a person was short, there have been plenty of clear and obvious signals to cover and lock-in those nice profits. And for the patient dip buyer, clearing $400 last week gave us a very sensible entry with a low-risk stop-loss just under this level.

Will this bounce stick and turn into a larger recovery? I don’t know. But as long as this stock remains above $400, it deserves the benefit of doubt.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 10

When boring is profitable

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

There was a little up and a little down, but by the time it was all said and done, the S&P 500 finished Wednesday almost exactly where it started.

This week’s pause is nothing more than cooling off following last week’s long string of up-days. Two-steps forward, one-step back. It doesn’t get any more complicated than that.

Confident owners are stubbornly holding for higher prices and that means every dip bounces within hours. In today’s case, the selling was measured in minutes.

This calm and gentile climb higher cannot last forever and there will be multiple cases of extreme fear and uncertainty this year, but this is not one of those times. Until further notice, this bull market is alive and well and there is only one way to trade this.

No doubt, readers crave deep insights and criticizing the herd is one way pundits make themselves sound sophisticated. But more often than not, successful trading is as simple as going with the flow. There is nothing sophisticated about that. In fact, it’s downright boring and unimaginative. But as long as I’m making money, I’m okay with boring and unimaginative.

No doubt more challenging times are ahead of us. And chances are we will be longing for these boring and easy trades soon enough. But until then, stick with what has been working and that is riding this grind higher.

If this market was fragile, overbought, and on the verge of breaking down, it would have happened by now.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 09

Why this TSLA / bitcoin marriage will not live up to the hype

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Yesterday, I wrote about TSLA buying $1.5 billion worth of bitcoin from TSLA’s perspective. (TL;DR I’m not a fan.) Tonight, I’m looking at this transaction from bitcoin’s point of view.

For the millennial, Robinhood vigilante, this marriage between two of their favorite momentum darlings is a match made in heaven. The only way this could get any better is if it turns into a three-way with GME getting invited to the party. (Maybe Elon will surprise us with this announcement next week!)

Anyway, Elon Musk putting his money (actually, his shareholders’ money) where his mouth is was a huge boost in bitcoin’s credibility. This is far and away the largest and most mainstream embrace of bitcoin by corporate America yet. It’s no surprise the cryptocurrency surged 20% on the news.

As I wrote previously, Bitcoin was consolidating in the $30k’s after last year’s breakout above $10k resistance. I expected this consolidation would last a little longer than a few weeks, but that’s why we trade the price action, not what we think. Bitcoin broke above $40k and that immediately made it buyable.

And as long a bitcoin remains above $40k it is ownable. Keep holding for higher prices and lifting our trailing stops.

As for what this deal means for bitcoin long-term, don’t expect many corporations to follow TSLA’s lead. Most CEOs are not as brash as Elon and there is no way they would put their reputation or their job on the line for something as volatile as BTC. All it takes is a very normal dip in BTC prices and TSLA will be forced to report hundreds of millions of dollars in quarterly losses during their next earnings report. (Mark-to-market reporting required by the SEC.) Once that happens, any potential interest in BTC will vanish along with TSLA’s profits.

What this means for bitcion is it is still up to individual speculators to keep pushing prices higher. Are there enough people willing to buy bitcoin above $40k? We will find out soon enough.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 08

A rant against TSLA and a reason to own the stock anyway

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Bitcoin surged 20% and hit $47k after Elon Musk announced TSLA bought $1.5 billion worth of the cryptocurrency.

While this is great news for bitcoin owners, it is borderline negligent for TSLA shareholders. TSLA is a car/battery/solar panel company. It is most definitely not a hedge fund. It doesn’t have the mandate from shareholders or the skillset necessary to speculate in cryptocurrencies.

If the highest and best use of TSLA’s cash is to buy cryptocurrency, then it should sell its car division and invest the proceeds into Bitcoin. Or even better, give that money to back shareholders and let them decide the best way to invest it.

But no, Elon is gambling shareholders’ money and chances are good this will end in a giant writedown at some point. And given TSLA’s modest 1.3% gain today, shareholders were not overly enthused about this idea either.

Decisions like this show a lack of fiscal discipline and while Elon has gotten away with big risks in the past, the problem with luck is it always runs out. While this $1.5 billion is largely immaterial to the company’s long-term prospects, it demonstrates a carelessness with shareholder money and no doubt that will come back to haunt the company when Elon’s luck runs out.

But this is a problem for another day. Until then, the Cult of Elon is strong and as much as I disagree with this move on principle, most shareholders put Elon on a pedestal and he can do no wrong. Momentum is higher and there is no reason to think today’s announcement changes the upward trajectory of this stock.

The near-term outlook is for higher prices but never get far from the exits because there is a frightening amount of air underneath us. The question isn’t if this stock falls, but when. If you have a solid plan for protecting your profits, you will be fine.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 05

Weekly Analysis: What does next week have in store for us?

By Jani Ziedins | Weekly Analysis

Free Weekly Analysis:

Last week was the S&P 500’s worst week since right before the election (-3.3%). This week was the index’s best week since the election (+4.7%). Funny how that works.

Every week has economic news, but last week nothing rose to the level of, “the worst economic developments in three months.” Just like nothing this week was, “the best economic news in three months.”

Instead, last week’s and this week’s volatility was driven by swings in investor sentiment, primarily affected by a spectacular bubble in a few fringe stocks.

Last week this out-of-control fire threatened to spread to the rest of the market. While investors were willing to accept stretched valuations in the best-of-the-best stocks, they were not willing to tolerate it in nearly bankrupt video game retailers and movie theater chains.

But over the weekend, those bubbles burst without taking anything else down with them and the indexes have been rallying in relief ever since, finishing this week with five consecutive gains.

What does next week hold? More of the same. While we won’t be able to match “the best week in three months”, the index will continue grinding away at record highs.

As much as the cynics love to hate this Teflon market, the one thing we know about fragile and vulnerable markets is they don’t keep making record highs. What is high tends to get even higher and that is definitely the case here.

Stick with what has been working and that is riding this relentless rally higher.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 04

What the Reddit “millionaires” should be doing now

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Well, that didn’t take long.

As usual, the market loves symmetry. Something that races up like a rocket will come crashing down like a rocket. And that’s exactly what happened to GME this week.

As my dad always reminded me every time I screwed up, “Easy come easy go.” (Thanks, dad.)

The fact GME crashed isn’t a surprise. To me, the only surprise was just how absurdly high this got before it crashed. I know the market loves taking things to extremes and I have seen a lot of crazy things in my time, but this 10,000% move over several weeks creates an entirely new category of insane.

That said, this ending was inevitable.

Seven days ago in my free blog post, I wrote the following to all of the new Reddit millionaires out there:

The problem is when these people are sitting on a mountain of profits, rather than thank their lucky stars and locking-in these once-in-a-lifetime profits, they are too busy gloating and taunting the other side. Instead of being satisfied with nearly $500, bulls insist on waiting until this goes all the way to $1,000 or even $5,000.

Well, with GME down nearly 90% since last week’s intraday highs, most of those Reddit millionaires are now Reddit thousandaires. At least the lucky ones are still thousandaires. Others have a whole lot of explaining to do when their wives discover the down payment for a house has gone missing.

For those that still have money left in the market, there is no reason to ride this all the way into the dirt. Cash in what you have left, learn from this lesson, and come back to the market better prepared next time.

Experience is the name we give our mistakes. Everyone who traded GME over the last two weeks got several years’ worth of experience in just a handful of days. Take these lessons and grow from them.

As for what comes next, GME will be insanely volatile for weeks and even months. That means 50% and 100% moves in both directions. But at this point, a 50% bounce only gets us back to $75. Maybe we get back to $100 or even $125, but waiting for anything higher is just wishful thinking.

For everyone that was introduced to the stock market because of GME, while it didn’t turn out the way people had hoped, use this opportunity to learn more about the stock market. For many of us, this has turned into a lifelong adventure.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 03

Should we trust this bounce?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 was more flat than anything Wednesday. But by finishing 0.1% in the green, that was good enough for the third up-day this week, leaving the index 1% shy of all-time highs. Not bad given the fear and anxiety that washed over the market during last week’s 3% pullback.

Stocks go up and stocks go down. That’s what they do. Just because the index goes down, don’t automatically assume something is wrong. And the same applies to the subsequent bounce. Unfortunately, most investors cannot resist the impulse to overreact to every dip and bounce in the road.

Humans love trends and we turn every two dots into a line that extends forever into the future. But that’s not the way markets work. Most daily gyrations amount to nothing more than meaningless noise.

What we do know is every dip over the last several months bounced within days, if not hours. That trend is built on dozens of data points and actually means something. And you know what? That longer-term trend endured despite all of the fear and uncertainty that consumed the herd last week.

The most important development was last week’s selling stalled and bounced. That reconfirms most investors are still in this for the long-haul and remain reluctant to sell bearish headlines or negative price-action.

Right or wrong, when owners refuse to sell, stocks remain stubbornly resilient. While this cannot last forever, it will continue for at least a bit longer.

As long as we keep getting more up than down, everything is going according to plan. Don’t fight what is working.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 02

Why GME is down and the indexes are up

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 finished Tuesday sharply higher as air continues coming out of Reddit’s GME, AMC, and SLV trades.

AMC tumbled 62% in just a few days. GME is down 82% from last week’s intraday highs. And even silver took it on the chin, falling 12% from yesterday’s early levels.

Easy come easy go. But everyone with even a rudimentary understanding of market mechanics knew this outcome was inevitable. It didn’t take a “Wall Street conspiracy” to kill this frenzied buying. Instead, these small millennial buyers simply ran out of cash and there was no greater fool left to buy a struggling retailer up nearly 10,000%.

The broad market is clearly relieved the old rules still apply. Every day GME rallied last week, the indexes fell. And this week, every day GME fell, the indexes rallied. This is Reddit thin is quickly turning into nothing more than a flash in the pan. Rather than upend the entire market and send it into chaos, this is turning out to be little more than a novelty that is fading as quickly as it came.

That said, these ripples will be felt for a while. GME already bounce 100% off of this morning’s lows. Between another wave of gullible buyers rushing in to “buy the dip” and shorts closing positions with spectacular profits, there will be a good amount of buying in these names for a while and they will continue trading at elevated levels. (Far off the silly highs, but well above where they started.)

But from the index’s point of view, this was a minor sideshow and the bull market is ready to proceed after last week’s brief dip and reset.

Remember, bull markets bounce countless times, but they reverse only once. So far this looks like nothing more than another one of those momentary stepbacks on our way higher.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Feb 01

Is the rally back on?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 bounced back Monday, recovering a respectable chunk of last week’s 3.3% tumble.

There were not any clear or obvious economic headlines driving last week’s selling and the same applied to today’s bounce. This was little more than a fleeting swing in sentiment as investors digested last week’s frenzied buying of a handful of beaten-down stocks.

Up to this point, investors have been ignoring any and all bad news and chances are good this latest wobble won’t turn out any different. But last week’s buying frenzy of a handful of garbage stocks gave mainstream investors pause. While they were previously okay with moderately stretched valuations in respectable names, they were not ready for the absurd silliness that was occurring in nearly bankrupt companies.

Most likely, this index pullback won’t end any differently than all of the other pullbacks that came before it. This dip went a little further than most of the others, but this bull market is far from broken. If prices continue firming up this week, last week’s dip will actually turn out to be a healthy development. Every sustained move higher needs a few step-backs along the way.

As for trading this chop, sometimes indexes bounce within hours. Other times the selling stretches across several days. When accounting for the market’s mood, it is hard to know exactly how much it will over or underreact to each situation. That is why our trading plan must account for all possibilities.

Sometimes markets are easy to trade and the indexes drift higher without ever seriously threatening our stops. Other times it shakes us out several times before making its next move.

I still believe this market is headed higher over the medium term, but it might squeeze me out at my stops one or two more times before it finally happens. Or maybe we shoot back to the highs without looking back. Either way, my trading plan is ready.

If this keeps going up, I buy. If the pullback resumes, I get out at my stops and prepare to buy the next bounce. It doesn’t get any more complicated than that.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 28

Why everyone will be right about GME, but still end up losing everything

By Jani Ziedins | Free CMU

Cracked.Market University:

Everyone is talking about GME, but how can you not when we are witnessing something we will likely never see again in our lifetimes?

If GME at $40 seemed ridiculous, then $100 is absolutely bonkers. And I can’t even begin to think of a word that adequately describes the $483 it hit this morning.

If someone told me a stock would explode 2,463% in four short weeks, surely they just cured cancer, cracked the code for cold fusion, or invented an anti-gravity machine. Obviously, whatever they did, it would change life as we know it.

Yeah, no. GME is a pedestrian company that sells used video games on physical disks. And not only did this company not cure some great ailment, it probably won’t even survive long enough to see the 2024 Paris Olympics.

That probably explains why the stock collapsed 77% in two short hours this afternoon as it tumbled all the way back to $112.

The most fascinating thing about this week’s move from $65 -> $483 -> $112 -> $193 is EVERYONE was right!!! The bulls were right about this “going to the moon.” And bears were right that it would collapse in a gigantic fireball.

Between this week’s 640% surge and subsequent 77% collapse, everyone had the chance to be right. And most GME speculators were sitting on a huge mountain of profits. Some profits even reached seven figures!!!

But as good as this seemed for everyone involved, virtually all of these traders will ultimately lose money. And not just a little money. But they will likely lose all of their money on this trade. (And some will lose even more than that!)

The problem is when these people are sitting on a mountain of profits, rather than thank their lucky stars and lock-in these once-in-a-lifetime profits, they are too busy gloating and taunting the other side. Instead of being satisfied with nearly $500, bulls insist on waiting until this goes all the way to $1,000. And bears that captured a 77% tumble in 120-minutes, rather than jump on this historic move, they demanded it to go all the way to $5.

And you know what, both sides are equally guilty of holding too long and letting these historic profits evaporated before their very eyes. As the saying goes, “bulls make money, bears make money, and pigs get slaughtered.”

Don’t be a pig and take these spectacular profits when you have them. Because if you don’t, they will almost certainly be gone in a few hours.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 27

Is this finally time for bears to shine?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 slumped 2.5% in the biggest one-day loss since the election. While everyone is waiting for the inevitable demise of these frenzied bubble stocks, they were some of Wednesday’s few winners with GME popping 135% and AMC adding a staggering 300%.

While experienced investors are growing concerned about bubble mania, clearly the fringe speculators driving these frothy stocks higher are not heeding the clear and obvious warnings.

As I wrote yesterday, bubbles take far longer to inflate and pop than most people realize. As crazy as things appear right now, most likely we still have a ways to go before this bull market is taken down by valuation worries. But just because higher prices are ahead for the indexes doesn’t’ mean we cannot take a few step backs along the way.

While I still believe higher index prices are ahead, that doesn’t mean I’m holding “no matter what”. As I wrote previously, I’ve been following this rally higher with stops in the mid to upper 3,700s and those stops got hit today. Regardless of what I believe, that’s my signal to get out and reevaluate. As easy as it is to buy back in, there is no reason to stubbornly hold a falling market.

Most likely this is just another false alarm on our way higher, but I’m not willing to bet my money on it. If prices bounce tomorrow, I’ll get back in. If they keep falling, even better, that means I’m entering at even lower prices.

I still like this market but that doesn’t mean I’m blindly following it. These are the times we follow our thoughtful trading plan, not shoot from the hip while overcome with anxiety and second-thoughts.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 26

Is this bubble about to burst?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 continues hovering near all-time highs. As I often say, something that refuses to go down will eventually go up. And that’s definitely the case here.

With the election behind us, Covid vaccinations finally starting to roll, and infection rates coming down from the post-holiday peak, investors need something new to worry about. And right now bubble talk is taking over the financial headlines with outrageous moves in names like GME, BB, TSLA, and Bitcoin.

I’m equally concerned by these obviously unsustainable moves and am certain they will end in tears for most of the retail investors piling into these trades. But I also know it takes a long, long time for bubbles to burst. The dot-com bubble started in 1995 with Netscape’s IPO and it didn’t burst until 2000. That was five years worth of inflating.

Without a doubt, we are already multiple years into this inflation and the burst is a lot closer than five years. But it is still more than six months out and it might not even happen until next year or the year after. Do we really want to pull the plug on a great rally two years early because a handful of stocks are obviously overvalued?

I don’t condone the buying frenzy going on in parts of the market and it will end poorly for those gullible chasers. But for the time being, there is nothing for index traders to do except keep following this bull market higher. When the time comes, there will be plenty of concrete signals in the indexes’ price action. Until then, stick with what is working.

If there is one thing we know for certain about bursting bubbles, they don’t make new highs.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 25

What GME’s wild ride is telling us about the rest of the market

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

I don’t cover penny stocks because a lot of unsavory things go down in that shady portion of the market and it isn’t suitable for most investors. That said, I never expected to see penny-stock style manipulation occur in a well-known, billion-dollar company.

No doubt almost everyone is aware of the sheer craziness going on in GME. The stock rallied nearly 1,000% since January 1st, with the biggest portion of that move taking place this morning. But not to be outdone, this morning’s 150% gain was quickly erased by a 50% plunge from the highs a few hours later. Easy come easy go.

While it is tempting to jump aboard this seemingly easy trade, these things are best watched from the sidelines. A lot of people are going to lose a lot of money trading this and you don’t want to be one of them.

That said, I’m not really interested in analyzing the crazy hive-mind driving GME’s wild swings. But I am interested in what something like this tells us about the state of the broad market.

Having been around for the wild dot-com days, there are some noteworthy parallels. While most of the market isn’t outrageously overvalued, there are several companies that have been driven to undeservedly high levels. GME is only the tip of the iceberg. TSLA being the fifth most valuable company despite the fact it hasn’t figured out how to turn a profit selling cars is a concern. (TSLA’s profits come from selling tax credits, not cars.)

By all accounts, the Robinhood crowd has lost its mind. And while it seems like a big pullback in the share price of GME, TSLA, and bitcoin shouldn’t affect the wider market. This fails to take into account stock valuations are a game of confidence. If one segment pops, that stink spreads to everything around it. Given how far we came since the March lows, there is a tremendous amount of air underneath us if sentiment flips from a half-full to a half-empty.

That said, even with all of the warning sirens going off, these things usually go even further before they pop. We might be in the later innings of this game, but we are not at the end and it is most definitely not time to abandon ship simply because a few stocks have gone “too far”.

The greatest strength we have as independent investors and traders is the nimbleness of our size. We can flip from full-long to full-short with a few clicks of the mouse. We don’t need to predict the market when we can react to it in real-time.

Stick with what is working as long as it keeps working. But be ready to get out once the cracks start showing because when this goes, it could get really ugly.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 22

Weekly Analysis: Can this bull market really keep going?

By Jani Ziedins | Weekly Analysis

Free Weekly Analysis:

This was another record-breaking week for the S&P 500. The index rallied 1.9% and all-time highs continue getting even higher.

Biden assumed the presidency on Wednesday with far less drama and rancor than we’ve seen in recent weeks, which was a welcome sight. That said, investors were not really concerned and the market rallied modestly on the news of a peaceful transition. But this makes sense. Stocks were not selling at a discount because of this political uncertainty and that meant there wasn’t much room to bounce when reality turned out less-bad than feared.

If we step back and look at the big picture, this was one of the most contentious elections in recent memory and Covid infection and fatality rates are off the charts. How does the stock market react to all of this bad news? By carving out fresh highs.

If this bull market really was as overbought and fragile as the cynics claim, there have been more than enough bearish headlines to send this crashing. Yet here we stand.

As ugly as the headlines have been, these things are old news and already priced in. Investors are always looking six months ahead and no matter how bad things look today, between a highly effective vaccine, warmer summer months, and an endless supply of free money, investors are actually in a pretty good mood.

While it feels like this market has gone too far, it always feels that way at the highs.

Stick with what has been working and that is holding for higher prices. Keep our stops in the mid to upper 3,700s and see how far this goes.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 21

Why FB bounced and where it is headed next

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Exactly one week ago, I wrote a bullish post about FB as the stock fell off a cliff:

This latest leg lower kicked off after [FB] announced it was suspending Trump’s accounts for violating their terms of service. No doubt investors are expecting backlash from Trump supporters and there will be an incremental hit to their revenues.

But as far as boycotts go, this one will be mild. Very few corporate advertisers are interested joining this boycott because they don’t want to get dragged into the dumpster fire taking place in Washington D.C. That means FB’s advertising rates won’t take a meaningful hit.

As far as users go, FB’s target audience is suburban soccer moms that share cupcake recipes. They are highly unlikely to abandon FB and head over to these unmoderated free speech alternatives.

Seven days later and the stock is up nearly 10%. Not bad for a few days of work.

Now don’t get me wrong, publishing that post on the exact day this stock bottomed was pure luck. But recognizing the buying opportunity was most definitely not luck.

Trading successfully comes from recognizing opportunities when the odds are stacked in our favor. One of the most profitable trades is when the herd starts rushing out of a perfectly good company for an immaterial reason. And even when the reasons are legitimate, most of the time the stock market takes the selling too far and even defective stocks are primed for a snapback.

Headlines affecting FB over the last several weeks and months will do little to damage one of this country’s most profitable companies. I would view any further weakness in FB as a buying opportunity. Unfortunately, I don’t think we will get that lucky because this stock is giving off vibes it is ready to head back to the highs.

A big shoutout to everyone liking and sharing these posts!!!
That positive feedback motivates me to keep writing these free posts!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 20

The last warning flag for this bull market that just went away

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

The S&P 500 popped to record highs on the first day of the Biden presidency. While there were some shocking and unprecedented events along the way, most people believed there would be a peaceful transition of power and that included most investors. Despite the political rancor and discord of the last several weeks, the stock market barely budged from record levels.

The broad market has been notching numerous new highs over the last few weeks, but notably absent was strength in the high-flying FAANG stocks. These best-of-the-best companies have been struggling to pull themselves off of recent lows and were stuck in consolidation patterns.

Some of this underperformance makes sense since Democrats have been vocally targeting these titans of tech for their anti-competitive business practices. Add in last week’s moves to censor Trump and popular right-wing social media platforms and the storm clouds were swirling around these former market darlings.

But as the popular saying goes, it is darkest right before the dawn. Tuesday night NFLX smashed earnings expectations and the stock surged 17% to record levels. GOOGL also popped to record highs. And FB, AMZN, and AAPL all had good days too.

The biggest red flag of the S&P 500’s recent strength was the lack of participation by this country’s best companies. But as the saying goes, better late than never. The FAANG stocks are getting their mojo back and expect them to not only catch up to the indexes, but actually start leading the charge higher.

There is no reason to fight what is working. Continue holding for higher prices and keep moving our trailing stops up.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 19

NFLX finally did what the chart told us was inevitable

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

Back in early December, I flagged intriguing price action in NFLX after it continued bouncing off of $475 support. This resilient behavior was even more striking because the company had two disappointing earnings reports during this period. Yet, the stock refused to crash through support.

As I wrote on December 7th:

NFLX had two disappointing earnings reports…and the stock tumbled -6.5% and -6.9% the day after each earnings report. Yet here we stand, still within 10% of all-time highs.

Bad news and a resilient stock? That’s a textbook case for a stock that wants to go higher. Anything that refuses to go down will eventually go up. And right now, NFLX is acting like it wants to go back to the highs.

Fast forward a month and a half and the company crushed quarterly earnings and the stock surged 12% in after-hours trade.

But this shouldn’t surprise anyone. Earnings are a game of expectations. Two disappointing quarterly reports in a row inevitably lower expectations. Fool me once, shame on you. Fool me twice, shame on me.

And as expected, investors came into this earnings report with much lower expectations. But paradoxically, these lower expectations make it easy for the company to beat expectations. And that is exactly what happened Tuesday evening.

The first part of my analysis proved prophetic. But for readers that missed this move, you’ll be happy to read what I wrote next:

If [NFLX] gets back to the highs, expect it to keep on going.

And I stand by what I said then. NFLX’s six-month consolidation chased off most of the weak holders and the only owners left are the ones who believe in this company. Once the stock gets back to the highs, expect it to keep going.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 15

Is this the start of the end?

By Jani Ziedins | Weekly Analysis

Free Weekly Analysis:

The S&P 500 lost 1.5% this week. Not great, but had it not been for the previous week’s strong gains, Friday’s close would have been a record high.

Everyone knows stocks cannot go up every…single…day (or week). Markets move in waves and every two steps forward are followed by one step back.

This week’s step-back was triggered by Biden’s extremely generous Covid relief package. The size caught some investors off guard and rather than cheer the extra free money, some people started fretting over the inevitable tax increases. Giveth with one hand, taketh with the other.

But should we really be worried about a 1.5% giveback? Say what you want about this market, but weak and vulnerable markets don’t keep setting new record highs. This bull market will die like all of the others that came before it, but this is not that time. Keep giving this rally the benefit of doubt until it gives a clear and compelling reason not to. Until then, enjoy the ride.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Jan 14

Is it time to give up on FB?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis:

While the S&P 500 keeps carving out fresh all-time highs, FB finds itself falling into a hole and is down nearly 20%. That’s an unusual position for one of this country’s most popular and profitable companies.

This latest leg lower kicked off after the company announced it was suspending Trump’s accounts for violating their terms of service. No doubt investors are expecting a backlash from Trump supporters and no doubt there will be an incremental hit to their revenues. But as far as boycotts go, this one will be fairly mild.

Very few corporate advertisers will join this boycott because they don’t want to get dragged into the dumpster fire taking place in Washington D.C. That means FB’s advertising rates won’t take a meaningful hit.

As far as users go, FB’s target audience is suburban soccer moms who share cupcake recipes. They are unlikely to abandon FB and head over to these unmoderated free speech alternatives. (For anyone not familiar with these venues, they can be very disturbing, even for those with thick skin.)

And once these Trump headlines blow over, there is still the threat of Democrats breaking the company up for being anti-competitive. But you know what? Those storm clouds will pass too. It’s been a long time since the government forced a company to break up and it’s unlikely to happen this time. This is almost certainly more bark than bite. (And chances are Democrats will go easy on the company if they continue their hardline with Trump.)

FB’s near-term pain isn’t over yet, but we should be looking at further weakness as a buying opportunity, not a reason to leave the company for dead.

If you find these posts useful, please return the favor by liking and sharing them!

What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, receive actionable analysis and a trading plan every day during market hours

Follow Jani on Twitter @crackedmarket

Category Archives for "Free Content"

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this: