May 8, 2024

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Trendsters, it's time to sharpen your sights! The market chatter might focus on fear and uncertainty, but we're tracking a potential goldmine. While the experts wring their hands, smart traders are recognizing a prime setup for those with calculated strategies.

 

Think of it like panning for gold. The stream might be churning with mud, but experienced prospectors know where to look for those hidden nuggets. Today, we're zeroing in on an opportunity that could yield some serious rewards.

 

Want to elevate your game to the next level? Join us for the "2024 Options Trading Mastery Workshop." This two-day event is your chance to unlock the power of options, minimize risk, and maximize your returns. Our experts will guide you through sophisticated strategies designed for success.

 

Get ready to analyze our Chart of the Day. NVIDIA's trajectory suggests a tactical pullback could be the perfect moment to strike. Later, we'll break down the latest Market Moving News – which companies are causing a stir, and why. And as always, we'll sprinkle in a dose of market trivia to keep things interesting.

 

Let's turn those murmurs of market fear into confident action, Trendsters!

 

P.S. Investing in your trading knowledge is the smartest play you can make. Don't miss out on the "2024 Options Trading Mastery Workshop!" 

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TODAY'S MARKET MOOD

Moderately Bullish

 

 

MARKET ROUNDUP

Stocks See-Saw as Yields Continue to Slide

 

Tuesday was a day of contrasts for the markets. While the S&P 500 clawed its way to a modest gain, the Dow remained relatively flat, weighed down by Disney's post-earnings stumble. Meanwhile, the tech-heavy Nasdaq saw a slight dip.

 

Here's where the major benchmarks ended:

  • The S&P 500 index rose 6.96 points (0.1%) to 5,187.70; the Dow Jones Industrial Average gained 31.99 points (0.1%) to 38,884.26; the Nasdaq Composite® ($COMP) eased 16.70 points (0.1%) to 16,332.56.
  • The 10-year Treasury note yield dropped more than 3 basis points to 4.457%.
  • The Cboe Volatility Index® (VIX) fell 0.26 to 13.23.

The bond market remains a key driver of sentiment. Treasury yields continue their downward slide, fueling hopes for a less aggressive Fed and offering potential relief in the interest rate tug-of-war.  Last week’s jobs report, with its hints of softening wage growth, has only added to the optimism.

 

Market watchers suggest a narrative shift might be underway. The idea of a potential pause – or even a pivot – in the Fed's rate hike cycle is gaining traction.

 

Eyes on Interest Rates

 

Interest-sensitive sectors like utilities and real estate shone brightly, extending recent gains. Lower rates can make these dividend-paying stocks more enticing when compared to Treasury yields. With positive chart patterns emerging, the utilities sector could be one to watch.

 

On the flip side, the semiconductor space showed some weakness, with even heavyweights like NVIDIA feeling the heat amidst concerns about the short-term outlook for AI.

 

What to Watch

 

Keep a close eye on the ebb and flow of Treasury yields. These have become a powerful compass needle for market direction. Additionally, the upcoming inflation reports (CPI and PPI) loom large and are likely to cause some pre-emptive market jitters.

 

Now, more than ever, understanding the relationship between yields, inflation, and Fed policy could be key to navigating the markets in the days and weeks ahead.

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By clicking the link above you agree to periodic updates from The TradingPub and its partners (privacy policy)

MARKET MISCHIEF

The Bear’s New Diet

 

Why did the bear on Wall Street start eating chips? Because he heard semiconductor stocks were down, and he thought it was snack time! Now, while our furry friend might be confused about the kind of chips we’re talking about, investors know all too well that when semiconductor shares dip, it’s not about reaching for the salsa.

This week, the market served up a platter of mixed signals, with Treasury yields sliding like a pro surfer catching a wave back to shore. Meanwhile, Nvidia’s stock took a little tumble, not because of a clumsy bear, but due to a billionaire investor deciding to cash in his chips – the silicon kind, that is.

So, while our bear is busy munching away, let’s keep an eye on the real feast – market opportunities. They say you are what you eat, and in the stock market, feasting on the right information can make you a well-fed investor. Just remember, when the bears are out hunting for bargains, it might just be the perfect time for a bull to charge. And who knows, maybe next time, the bear will go for the bonds instead!

CHART OF THE DAY

NVIDIA – Primed for Takeoff?

 

NVIDIA (NVDA) seems to be playing by its own script and delivering a textbook technical setup. The recent pullback offers a familiar echo of the August-October 2023 pattern, hinting at one final dip below the 1D MA50 before a possible liftoff. It's a potential buying opportunity for those who missed the earlier run.

 

Notice the uncanny resemblance in those 1D RSI fractals – it's like déjà vu for technical traders. Of course, past patterns don't guarantee future performance, but if these charts continue to sing in harmony,  that ambitious $1150 target might not be so far-fetched after all.

 

Key Takeaway: It's not just about the destination; it's about timing the entry point. As always, managing risk and understanding your time horizon is crucial in the world of technical trading.

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ANALYSIS

Volatility: From Foe to Fuel

 

The market has a dirty little secret: behind those respectable yearly returns lies a landscape of sharp drops and unexpected climbs. That "average" 14% intra-year drawdown? It's enough to give even seasoned investors a case of nerves.

 

The temptation is to hunker down and ride out the storm. But what if, instead of fearing the swings, we could harness their power? This is where options enter the picture. Often misunderstood, options offer a unique tool for managing risk and maximizing potential returns within volatile markets.

 

Think of them less as a high-stakes gamble and more as a calculated, strategic play. With options, you can define your potential loss upfront, while simultaneously amplifying your gains if the market moves in your favor. Imagine capturing a decade's worth of market growth within a single year... that's the power options can bring to your portfolio.

 

Of course, navigating the world of options requires expertise. That's why we're thrilled to host the 2024 Options Trading Mastery Workshop. The insights and strategies will help you transform volatility from an obstacle to a catalyst for outsized profits.

 

The bottom line? The market will move, sometimes dramatically. We can retreat in fear, or learn to leverage its energy. The choice, and the potential rewards, are yours.

MARKET MOVERS

Earnings and Outlook Drive Sentiment

 

BP shares took a hit on softer-than-expected earnings amidst weaker fuel margins.

 

Ferrari, despite beating expectations, saw its stock decline as investors reacted to reaffirmed full-year guidance.

 

Lucid Group plunged following a wider-than-anticipated quarterly loss.

Palantir Technologies stumbled as better-than-expected revenue failed to offset softer guidance.

 

Peloton soared as reports of potential private equity buyout interest fueled speculation.

 

Simon Property Group gained ground after its Q1 revenue outpaced forecasts.

 

Target got a boost from a Citigroup upgrade, citing the retailer's potential for margin improvement.

 

UBS shares surged, propelled by earnings that surpassed analyst expectations.

 

Eyes on the Calendar

 

Investors are eyeing Wednesday's release of earnings reports from semiconductor heavyweight Arm Holdings, alongside releases from Airbnb, Anheuser-Busch Inbev, Shopify, Toyota Motor, and Uber Technologies.

 

Economic Indicators

 

The Fed’s recent banking survey hints at a tightening credit environment, potentially signaling some underlying weakness in the economy. This week's speeches from Fed officials could offer further clues on their inflation outlook and the trajectory of interest rates. While markets currently anticipate rate cuts in late 2024, the timing and extent remain a subject of ongoing debate.

MARKET MUSINGS & TIME CAPSULE

 

Random Musings

 

"If inflation is the thief in your pocket, options can be the lockpick."  Sometimes, the best defense is a calculated offense.

"Volatility breeds opportunity, but only for those who know where to look."  The market's chaos is fertile ground for the prepared investor.

"Every chart tells a story. The trick is understanding its language."  Technical analysis is a powerful tool; let it guide your investment decisions.

"Markets, like history, have a tendency to rhyme."  Studying past patterns can unlock insights for navigating the present.

"Don't confuse luck with skill. Even a broken clock is right twice a day." Remember,  sustainable investing demands more than just a good hunch.

 

 

On this day in history, May 8

 

May 8, 1945: Victory in Europe Day (V-E Day) marks the end of World War II in Europe.  A celebration of victory, but also a reminder of the cost of conflict and the value of peace.

 

May 8, 1984: The Soviet Union announces it will boycott the Summer Olympics in Los Angeles, in retaliation for the US boycott of the 1980 Moscow Olympics. Politics and sports collide, highlighting the power of international events and rivalries.

 

May 8, 1794: French chemist Antoine Lavoisier, known as the "father of modern chemistry," is guillotined during the Reign of Terror. A tragic reminder of the volatility of even the greatest minds in tumultuous times.

 

May 8, 1886: Pharmacist John Pemberton first sells a new carbonated beverage called Coca-Cola in Atlanta, Georgia. A humble beginning for an iconic brand that would conquer the world.

 

May 8, 1902: The Mount Pelée volcano erupts on the island of Martinique, killing an estimated 30,000 people. A stark reminder of nature's unpredictable and destructive power.

THE FINAL LEDGER

Is this Gambling? This is Strategy.

 

Before we close the books on today's market musings, let's heed the wise words of humorist Will Rogers:

 

"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it."

 

While a touch tongue-in-cheek, this quote highlights a fundamental truth: speculation and calculated investing are vastly different beasts. The markets may seem like a casino at times, but success lies in discerning the opportunities hidden within the noise using the right strategy.

 

Speaking of strategy, if you're ready to take your options trading to the next level, don't miss the 2024 Options Trading Mastery Workshop. This two-day event is your chance to learn directly from seasoned experts, gain crucial insights, and walk away with a toolkit of high-reward strategies.

 

Remember, investing in your trading knowledge is always a wise move. Let's stay informed, think critically, and seize those opportunities hidden within the market's ebb and flow. Until next time, happy trading!

Disclaimer:

 

Trading foreign exchange, stocks, options, or futures on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience.

 

This newsletter provides general information that does not take into account your objectives, financial situation or needs. The content of this newsletter or our website must not be construed as personal advice. COE Media is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation.

 

The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. You should seek advice from an independent financial advisor.

Any past performance presented is not necessarily indicative of future success.

 

Always do your own research and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

 

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