Weekender for 12/17
1. Market Summary
- Stocks up again, though large cap techs left behind.
- Stocks riding Chairman Powell’s 180, but you have to ask: why did Chairman Powell completely flip in just two weeks?
- Bank stocks surge as yields fall, stocks rally. Their low-interest-rate investments enjoy lower interest rates while the banks make money in the stock market using the Fed’s excess reserves and emergency facility.
- Strong volume drives 400+ NASDAQ new highs.
- Retail sales seen as strong on their own, yet retail stocks fall.
- Big moves for six sessions, December expiration, profit taking likely.
Another gallop upside as the stocks continued the rally triggered by pandering Chairman Powell pathetically placating a publicly pissed president pounded in the polls. Small-caps, mid-caps, semiconductors, transports, commodities surged again after Chairman Powell’s two-week turn from Dec. 1 to Dec. 13.
To wit, with weaker data, Chairman Powell stood firm as to the Fed’s position of not backing off its inflation fight until it was sure no chance of re-ignition exited. Then, on Dec. 13, after stronger data from jobs, unemployment, wages, Michigan sentiment, Institute of Supply Management Services and regional Purchasing Managers Indexes coupled with hotter Consumer Price Index (CPI) data, Chairman Powell pulled a Rose Rosana Danna with a “never mind,” pulling interest rate cuts forward and saying the Fed was discussing that day when it should “dial back” on its tighter policy.
Chairman Powell had nary a hawkish utterance. Indeed, after Biden publicly scolded the Fed, Powell completely changed. You can argue what happened, but in data terms it makes no sense. In political terms it makes nothing but sense. As the Frenchman in “The Matrix Reloaded” would say, “cause and effect.”
NOTE: The figures and facts above are from the 12/14 report.
MARKET VIDEOS
MARKET SUMMARY
TECHNICAL SUMMARY/NEXT SESSION
Note: The videos are from the 12/13 report.
2. Targets Hit
Investment House Daily:
We were picking up positions when things were still problematic with much negative talk about buybacks ending and nothing left to drive stocks. Well, as we discussed, there were massive short positions as well, and all it would take was a trigger to continue the Q4 rally. The market got that trigger in the form of some favorable data, and then the Powell punt. We took some nice gains on the week.
Arm Holdings PLC – ADR (NASDAQ: ARM): 41.57% gain in the options
Bank of America Corp. (NYSE: BAC): 73.9% gain in the options
Big Lots Inc. (NYSE: BIG): 20.17% gain in the stock, 36.59% gain in the options
DoorDash Inc. (NASDAQ: DASH): 101% gain in the options
Freeport-McMoRan Inc. (NYSE: FCX): 85% gain in the options
Louisiana-Pacific Corp. (NYSE: LPX): 90% gain in the options
Marathon Digital Holdings Inc. (NASDAQ: MARA): 26.6% gain in the stock, 86% gain in the options
Microchip Technology Inc. (NASDAQ: MCHP): 90.9% gain in the options
Photronics, Inc. (NASDAQ: PLAB): 32% gain in the stock, 285% gain in the options
Riot Platforms Inc. (NASDAQ: RIOT): 19% gain in the stock, 48.59% gain in the options
Snap Inc. (NYSE: SNAP): 34.6% gain in the stock, 212% gain in the options
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Technical Trader:
We have enjoyed a stellar Q4 thanks to looking at the patterns and setups and positioning ourselves for that rally. It was fairly amazing that the setup for a typical Q4 rally was in place, yet the negativity about if that would occur was quite high. That is a great combination: solid patterns, a favorable seasonal setup and negativity that it won’t happen. It did. These are some of the gains we banked this past week.
Gatos Silver Inc. (NYSE: GATO): 69% gain in the options
Global Payments Inc. (NYSE: GPN): 101% gain in the options
Illinois Tool Works Inc. (NYSE: ITW): 51% gain in the options
NXP Semiconductors NV (NASDAQ: NXPI): 101% gain in the options
Quanta Services Inc. (NYSE: PWR): 153% gain in the options
Ralph Lauren Corp. (NYSE: RL): 133% gain in the options
Uranium Energy Corp. (NYSEAMERICAN: UEC): 29.6% gain in the options
Zscaler Inc. (NASDAQ: ZS): 34.7% gain in the options
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Rapid Profits Stock Trader:
Materials, minerals. Precious metals, tech, biotech and more – so many areas started to pop when the small caps started to move here in December. The economic data was a bit better and the market sensed the Fed was close to changing its rhetoric. It all fell into place and we continued banking gain here in the year end rally. Some of the nice gain we took this past week:
Coeur Mining Inc. (NYSE: CDE): 14.33% gain in the stock
Cemex SAB de CV ADR (NYSE: CX): 10.5% gain in the stock
Fate Therapeutics Inc (NASDAQ: FATE): 11.5% gain in the stock
Opendoor Technologies Inc. (NASDAQ: OPEN): 14.43% gain in the stock
Photronics, Inc. (NASDAQ: PLAB): 18% gain in the stock
Uranium Energy Corp. (NYSEAMERICAN: UEC): 16.16% gain in the stock
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3. Covered Call Options Play
Dorian Lpg Ltd. (NYSE: LPG) — Dorian Lpg Ltd. is currently trading at $37.55. The Jan. 19 $45 calls (LPG20240119C00040000) are currently trading at $1.45. That provides a return of about 11% if LPG is above $40 by the expiration.
