Weekender for 12/31
1. Market Summary
- Santa rally tepid, reminiscent of the lack of Christmas spirit in “Elf.”
- Data still tepid overall, the seven-year auction was poor, but hey, the Fed Bank Term Funding Program (BTFP) arbitrage usage continues — great for banks, but how about everyone else?
- Most leading areas are in pause mode after a seriously good Q4 run.
- Now, we wait for the new calendar and what direction the funds push their money.
The in-between week, a.k.a. the time of the Santa Claus rally, is showing action reminiscent of Santa in the movie “Elf” — just can’t get the sleigh going. After a solid enough start Tuesday, a couple of clinkers, with Thursday more so than Wednesday, with small-caps taking the brunt at -0.38% — not bad, but overall stocks were lower. It certainly looks as if the market is tired and does not have the energy to fight off the profit taking. One day left in the year, perhaps there will be a spurt. If so, we likely bank some more gains.
NOTE: The figures and facts above are from the 12/28 report.
MARKET VIDEOS
MARKET SUMMARY
TECHNICAL SUMMARY
NEXT SESSION
Note: The videos are from the 12/27 report.
2. Targets Hit
Investment House Daily:
After a heck of a fourth-quarter rally, the market moved through the Santa Claus rally week somewhat worn out. We used it to bank some gains with an eye out for the new calendar year to see if any changes in focus from the large hedge and money funds will take shape. We will play the good setups in the areas they move, and if they stay with some of the same groups, that is okay by us.
Some trades we banked over the past week:
Arm Holdings PLC – ADR (NASDAQ: ARM): 118.79% gain in the stock
Coeur Mining Inc. (NYSE: CDE): 32.5% gain in the stock
Cemex SAB de CV ADR (NYSE: CX): 15.95% gain in the stock, 90.7% gain in the options
Fate Therapeutics Inc. (NASDAQ: FATE): 32.9% gain in the stock
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Technical Trader:
Some plays were getting extended and started looking heavy. We opted to bank some more gains ahead of the end of the year, particularly in plays with nearer term options or ones in which we had not yet taken some partial profits.
Gatos Silver Inc. (NYSE: GATO): 75% gain in the options
Meta Platforms Inc. (NASDAQ: META): 66.3% gain in the options
Southern Copper Corp. (NYSE: SCCO): 115.2% gain in the options
Steel Dynamics Inc. (NASDAQ: STLD): 54.6% gain in the options
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Rapid Profits Stock Trader:
The continued rally in Q4 gave us many solid plays. We sometimes took profits outright when a play ran up to resistance. On others, we took partial profits when the target was hit because the move was so strong and the resistance was not a stone wall. In that way we can let a play run — with solid profits in the bank — to see if it can take out the resistance. If so, we can turn a solid gain into a very nice double-digit-percentage gain.
What happened this past week was some money reallocation that saw some of the metals, materials and related stocks stall late week. Given these areas are very susceptible to new directions and new focus from fund managers in a new calendar year, we banked some more gains.
Coeur Mining Inc. (NYSE: CDE): 9.12% gain in the stock
Cemex SAB de CV ADR (NYSE: CX): 10.7% gain in the stock
Riot Platforms Inc. (NASDAQ: RIOT): 11.3% gain in the stock
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3. Covered Call Options Play
Compania De Minas Buenaventura SAA (NYSE: BVN) — Compania De Minas Buenaventura SAA is currently trading at $15.18. The Jan. 19 $16 calls (BVN20240119C00016000) are currently trading at $0.65. That provides a return of about 11% if BVN is above $16 by the expiration.
