Weekender for 3/10
1. Market Summary
- Powell affirms Waller’s ‘reverse twist’ musings and the market likes the prospects.
- After a volatile period, NASDAQ indices break solidly higher with the other indices — sans DJ30.
- Not much change in leadership, just recycling the usual suspects
- Initial jobless claims remain low even as Challenger and other private counters, as well as the government’s own WARN report show current layoffs and plant closures already occurring and more to come.
- Consumer credit sees resurgence in card debt as levels hit records, delinquencies and charge-offs surge.
- Jobs on deck, and we are supposed to pretend they are an accurate picture of the labor market.
The less than solid tech bounce Wednesday set the stage. Not for downside, but for a new break higher. The indices overall posted solid advances that helped take the wobble out of some potentially wavering patterns, particularly in tech.
Powell’s Day 2 saw him backtrack on some of the more hawkish positioning and jawboning from Fed governors and FOMC members. Powell went back to his pre-tough guy renewal tour since the presser two FOMC meetings back, stating the Fed is near the confidence level to cut rates in 2024. Importantly, Powell followed through on Waller’s previous comments calling for holding more shorter-term bills versus the MBS. The groundwork is now well underway for the next form of QE, the ‘reverse twist.’ That definitely took pressure of the upside move as the stock indices rebounded quite nicely.
NOTE: The figures and facts above are from the 3/7 report.
MARKET VIDEO
NOTE: The video is from the 3/6 report.
2. Targets Hit
Investment House Daily:
In a market that is light on leadership and what there is outside of the NASDAQ mega-caps is spread out and thin, you have to search to find the winners and not be so finicky you write yourself out of winning plays. Thus, we found ourselves in a wide gamut of plays where we banked gain, plays not only from different areas in the market and economy, but different prices as well. We had to use options on some plays to keep our price range where we want it, but that works if you have great setups.
American Eagle Outfitters, Inc. (NYSE: AEO): 12.6% in the stock, 60.9% in the options
Fastenal Company (NASDAQ: FAST): 64.5% in the options
Harmony Gold Mining Company Limited (NYSE: HMY): 58.1% in the stock
Louisiana-Pacific Corporation (NYSE: LPX): 64.55% in the options
Netflix, Inc. (NASDAQ: NFLX): 37.7% in the options
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Technical Trader:
There was a definite financial bias in the profits we took this week as we have played what we call the ‘outsiders,’ the crypto-related and a few other sectors that are doing their own thing, making their own wake, regardless of what the rally leaders and other market stocks are doing. Even so, some old-time retail and industrial-side stocks also produced nice gain for us.
ProShares Bitcoin Strategy ETF (NYSEARCA: BITO): 151% in the options
Coinbase Global, Inc. (NASDAQ: COIN): 122% in the options
Wells Fargo & Company (NYSE: WFC): 208% in the options
Walmart Inc. (NYSE: WMT): 64.7% in the options
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Rapid Profits Stock Trader:
I have complained of a lack of breadth in terms of market leadership, of those stocks in great patterns and breaking higher, rallying to new highs and carrying the market. Well, as we know, there are plenty of stocks that can provide a fast, solid return without breaking to new highs. It could be that some of those are on the way to a new high… eventually. We are picking them up when they ‘turn the corner’ as I like to say, i.e., coming off a trend break or having rounded off a bottom and turning back upside. The moves they make can be rapid and quite profitable. Looking across the gains we banked this week, we have a wide range from oil and gas to drugs to metals to AI. Hmmm. Plenty of breadth with these rapid profits stocks where we typically hold them a short period of time. For example, with CERS, we bought it as it made the move, then booked some profits that afternoon.
Cerus Corporation (NASDAQ: CERS): 6.75% in the stock
Palantir Technologies Inc. (NYSE: PLTR): 11.93% in the stock
Permian Resources Corporation (NYSE: PR): 7.57% in the stock
Teva Pharmaceutical Industries Limited (NYSE: TEVA): 5.7% in the stock
TMC the metals company Inc. (NASDAQ: TMC): 8.78% in the stock
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3. Covered Call Options Play
Madison Square Garden Entertainment Corp. (NYSE: SPHR) — Madison Square Garden Entertainment Corp. is currently trading at $48.12. The April 19 $50 calls (SPHR20240400C00050000) are currently trading at $3.10. That provides a return of about 11% if SPHR is above $50 by the expiration.
