Weekender for 3/17/2024
1. Market Summary
- Upside futures survive hotter Producer Price Index (PPI), weaker retail sales, but by the close the indices are lower
- Late session recovery keeps Nasdaq et al. holding near support as the market tries to ride through the Nasdaq volatility
- Large-cap Nasdaq help lead along with oil and gas, retail, metals while small and mid-caps tank
- Chips weaker, mega techs stronger — are we going back to mega-tech dominance?
- Bitcoin, cryptocurrency-related taking a breather after a frantic surge
- Ten-year yield surges back over the 200-day simple moving average (SMA) as iShares 20 Plus Year Treasury Bond ETF (TLT) gaps farther below support
- Chicago Board Options Exchange’s CBOE Volatility Index (VIX) rising as the market rises. Goldman Sachs reported telling clients to buy VIX calls for an upside VIX move.
- Expiration Friday with a handful of reports: NY Purchasing Managers Index (PMI), industrial production, Michigan sentiment for March
This market remains buoyant, that is certain. PPI came in hotter, retail sales missed expectations and January was not revised higher but lower. Huge revisions on continuing claims, so large that the line-toeing in-house economists on the financial stations terms the revisions as “odd.” Yet, stocks were, relatively, buoyant.
NOTE: The figures and facts above are from the 3/14 report.
MARKET VIDEOS
MARKET SUMMARY/TECHNICAL SUMMARY
NEW & ECONOMICS/NEXT SESSION
NOTE: The videos are from the 3/13 report.
2. Targets Hit
Investment House Daily:
Even with this market continuing to trend higher, the moves are stoked by specific groups. Of course, the mega-cap techs have driven the action, but we like to look for areas that are not as crowded, not as pricey. Sure, we end up in some crowded trades — because we got in earlier and then let the crowd push our positions higher.
The ProShares Bitcoin Strategy ETF (NYSEARCA: BITO) is one such area where we opened a position on Feb. 7 as BITO was testing the 50-day moving averages (MAs). It undercut that support then broke back over it. It tested the support again, and this time BITO broke higher. That was the entry signal we were looking for and we issued the alert to buy the stock trading at $20.95 along with the June $20 strike call options trading at $2.50.
From there BITO posted that dramatic February through March run. We issued the alert to bank partial profits as the stock moved higher, 13% on the stock and 68% on the options at the initial target. Then 35% on the stock and 230% on the options on Feb. 28, as BITO gapped higher after a rally, showing a tombstone doji. We still let part of the position work, and as BITO looked to be topping that next leg higher on March 12, we sent the alert to bank the rest of the 52% stock, and 428% option gain.
Other gain we banked this week include:
Louisiana-Pacific Corp. (NYSE: LPX): 50.5% gain in the options
SoundHound AI Inc. (NASDAQ: SOUN): 42% gain in the stock, 111% gain in the options
TMC the metals company Inc. (NASDAQ: TMC): 22.4% gain in the stock
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Technical Trader:
An eclectic mix of plays of late because that is what the market is giving. Few areas participating, and within those areas just a few stocks. Being flexible and willing to look not only at the mega-caps but at emerging areas or at least the big-name stocks in some areas, continues to pay off. This past week, we banked gain on the following:
ProShares Bitcoin Strategy ETF (NYSEARCA: BITO): 173% gain in the options
Freeport-McMoRan Inc. (NYSE: FCX): 64% gain in the options
Lam Research Corporation (NASDAQ: LRCX): 131.99% gain in the options
Meta Platforms Inc. (NASDAQ: META): 70% gain in the options
iShares Silver Trust (NYSEARCA: SLV): 29.19% gain in the options
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Rapid Profits Stock Trader:
Using the “turning the corner” strategy I discussed last week, we were able to pick up some plays on the week. Some powerful moves resulted.
One such play was SoundHound AI Inc. (NASDAQ: SOUN). We made good money on the stock back early in 2023 when it surged. That move died off and SOUN fell into a long eight-month cup base. It broke higher with a big gap, too big to chase.
It consolidated that move, however, and that gave us the opportunity to play the turn. When SOUN broke higher off the test of the surge, that was the entry signal. We issued the alert to enter with the stock trading at $5.97. SOUN moved higher from there, accelerating this week with a strong Tuesday to early Thursday move.
Thursday the stock gapped higher then started to fade. With such a huge move in a rather meteoric stock, we issued the alert to sell with the stock trading at $8.65 and a strong 44% gain with a short holding period.
Fate Therapeutics Inc. (NASDAQ: FATE): We also banked a gain in this position, gaining 14.15%.
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3. Covered Call Options Play
Stoneco Ltd. (NASDAQ: STNE) — Stoneco Ltd. is currently trading at $17.28. The April 19 $18 calls (STNE20240419C00018000) are currently trading at $1.00. That provides a return of about 11% if STNE is above $18 by the expiration.
