February 2, 2024

If you choose to no longer receive our free newsletter and daily market updates, click here to UNSUBSCRIBE 

Sharpen your swords, Trendsters! Today's newsletter slices through the market's surface, revealing the truth beneath the bullish wave. We'll expose sectors secretly swimming with challenges, so you can avoid being dragged under. Spoiler alert: it's not going to be smooth sailing.

But wait, before you batten down the hatches, there's treasure ahead! Our Chart of the Day predicts smooth seas for CVNA (hint: think green!). Market Moving News equips you with the latest intel to navigate the currents. And for a touch of landlubber fun, we've got random trivia that might just become your lucky charm.

So, ditch the life preserver and dive into Traders on Trend! This newsletter's your compass through the market's hidden reefs, packed with insights, analysis, and a healthy dose of surprise. Prepare to emerge informed, empowered, and perhaps even a little richer (okay, definitely richer). Now, let's set sail away from those underperforming sectors...

Sponsored

Bill Gates was ahead of the curve on tech for decades.

He drove the personal computer revolution of 1980s.

He predicted the rise of smartphones, social media and streaming video in the mid-1990s.

And now he says artificial intelligence is “ as fundamental as the computer chip, the internet and the PC.”

This is why, ten years ago, I hired one of Bill Gates’ former in-house experts, Jon Markman.

This is why Markman has dedicated his long career to developing algorithms for picking the best stocks.

First he helped do it for Microsoft when Bill Gates was CEO. Now, he’s helped do it for me.

And this also helps explain why our “Buy” ratings for AI stocks have worked so well, giving investors the opportunity for gains of …

✓810% on ASML

✓3,146% on Lam Research

✓5,466% on Ansys, and

✓9,624% on Nvidia, and …

✓Many more.

The big news: The same ratings algorithm that helped pick these AI winners has now identified another AI stock as a “Buy.”

It’s Jon’s pick for the #1 AI Stock of 2024 and Beyond.

Click here for the details

Today's Market Mood: EXTREMELY BULLISH!

The Bear-Bull Meter

Yesterday's Fed-induced wobble was a mere blip on the radar as stocks staged a spirited comeback, fueled by two key ingredients: falling yields and eager anticipation for mega-cap earnings. 

Here’s where the major benchmarks ended:

The S&P 500® index (SPX) rose 60.54 points (1.3%) to 4,906.19

The Dow Jones Industrial Average (DJI) gained 369.54 points (1.0%) to 38,519.84

The Nasdaq Composite® (COMP) added 197.63 points (1.3%) to 15,361.64

The 10-year Treasury note fell over 10 basis points to 3.86%

The Cboe Volatility Index® (VIX) fell 0.47 to 13.88

So, what's behind this sudden shift?

Firstly, Treasury yields took a nosedive, reaching their lowest point since December. This drop, some speculate, might be linked to concerns about regional banks, potentially signaling a future dovish shift from the Fed.

Secondly, investors are itching for earnings season, with tech giants like Amazon, Apple, and Meta Platforms set to unveil their financial report cards. These heavyweights can significantly sway the market's direction, so anticipation is running high.

Careful still Trendsters, there's a wrinkle in the space-time continuum. Regional banks remain under pressure after New York Community Bancorp's disappointing results, dragging down the KBW Regional Banking Index.

So, what's the strategy for emerging from this quagmire?

• Keep an eye on earnings: The next few days are crucial, with mega-cap reports potentially triggering significant movements. Pay close attention to company guidance and overall sentiment.
• Don't ignore the undercurrents: While the overall market seems bullish, regional bank weakness is a potential storm cloud. Monitor the situation and consider adjusting your portfolio accordingly.

Sponsored

Remember that potato you accidentally left on the counter and watched it sprout eyes? Well, Treasury yields did the opposite – they sprouted wings and flew south, hitting their lowest levels since December!

Now, this sudden drop might have investors wondering: will stocks follow suit and plummet like a potato falling off a cliff?

Hold your horses (and potatoes)! While yields and stocks often dance in opposite directions, the recent drop could be a sign of investor caution, not panic. They might be seeking shelter from potential economic headwinds, rather than preparing for a full-blown market crash.

So, should you ditch your stocks like yesterday's fries? Not necessarily. But keep an eye on the upcoming Nonfarm Payrolls report. Strong job numbers could reignite inflation concerns and send yields (and maybe stocks) flinging in a different direction.

$CVNA: Charting a Course to Higher Ground (Maybe)?

Carvana's 4-hour chart is really hinting at a potential bullish breakout. Four key signals are in alignment: the 200-MA acting as support, a demand zone hungry for buyers, and an upward weekly trend hinting at bigger things to come. Still, the real confirmation we look is a powerful green Heikin Ashi candle, bursting through the trendline with volume to match its conviction.

If this green giant emerges, our sights are set on the $49 supply zone, a potential area where selling pressure might resurface. Remember, Trendsters, we don't chase mirages. While I won't dictate a precise price target, a 50% stop-loss is crucial for managing risk. Swing trading, after all, is a tango with volatility, and only invest what you're comfortable potentially losing.

So, is CVNA ready to waltz its way higher? The chart suggests a possibility, but the market, as always, loves to keep us on our toes. 

Sponsored

" [Industry X] will grow at the same rate as the AI industry..."

But these stocks sell for up to 97% less.

Click here for details.

The market might be booming, but some sectors are stuck in the doldrums. Today, we'll chart a course away from three industries facing powerful headwinds, even in fair economic weather.

Oil Stocks: Running on Empty?

Remember the recent attacks in the Red Sea? Oil prices barely blinked. The potential U.S. retaliation against Iran? Crickets. Why the apathy? The rise of electric vehicles (EVs) is steadily draining oil's allure. Sales are surging, with large electric SUVs and trucks gaining traction. Plus, a potential Israel-Hamas ceasefire could further dampen demand. So, before you dive into oil stocks, ask yourself: if conflict can't ignite prices, what will?

Health Insurers: Feeling the Pinch?

Healthcare's rising cost is squeezing health insurers. Humana's recent loss is a stark reminder. Even UnitedHealth, despite strong results, saw its shares sink due to high medical expenses. With expensive new drugs and an aging population, this trend isn't going anywhere. So, unless you have a crystal ball predicting cost control breakthroughs, consider steering clear.

Cable TV: Cord Cutters' Paradise?

The cord-cutting trend is no fad. Millions are ditching cable, and the exodus shows no signs of slowing. Streaming giants like Netflix are eating their lunch, while competition from Verizon and others further erodes their grip. With these headwinds, cable companies are stuck in a shrinking universe. So, unless you enjoy watching your investments dwindle, give them a wide berth.

Remember, even a booming economy has its laggards. By avoiding these sectors facing structural challenges, you can navigate the market with a sharper focus on opportunities with a tailwind, not a headwind.

Today's news delivers a mixed bag, with some companies soaring and others stumbling:

** Gaining Altitude:**

• Corteva (CTVA): Soaring seeds and pesticide sales fueled a near 19% jump, thanks to rising demand for grain, oilseeds, and biofuels.
• Ferrari (RACE): Revving up after exceeding earnings expectations and forecasting a speedier 2024.
• Norfolk Southern (NSC): An activist investor's stake and potential proxy fight sent shares chugging over 9% higher.

** Facing Headwinds:**

• C.H. Robinson (CHRW): Shipping and logistics hit a snag, with weaker earnings and revenue dragging the stock down over 12%.
• Honeywell International (HON): Missed revenue expectations caused shares to dip 2.5%.
• Peloton Interactive (PTON): Lower-than-expected sales forecasts sent the exercise bike maker tumbling 25%.
• Qualcomm (QCOM): Downgraded by analysts, the wireless tech company shed 5%.
• Wolfspeed (WOLF): Semiconductor guidance missed expectations, leading to a 13% plunge.

** Watching the Clock:**

• Energy giants Chevron (CVX) and ExxonMobil (XOM): Reporting Friday, their performance hinges on oil prices and potential Middle East disruptions.
• Pharmaceutical heavyweights AbbVie (ABBV), Bristol-Myers Squibb (BMY), and Regeneron Pharmaceuticals (REGN): Earnings reports due Friday, offering insights into the healthcare sector's pulse.

Technical Talk:

While the S&P 500 and other benchmarks remain bullish, the market isn't as overheated as earlier this week. However, beware of February's historical weakness for the Nasdaq Composite.

Remember, Trendsters, the market is a living creature – ever-changing and full of surprises. Stay informed, adapt your strategies, and navigate the ups and downs with confidence. See you tomorrow for more market insights!

Random Musings

Oil's Not Always Golden: While oil prices have rebounded, remember they're fickle beasts. Just like that fad for neon leg warmers in the 80s (don't ask), trends can shift swiftly. Keep an eye on alternative energy developments – they might just steal the spotlight.

Earnings Season Rollercoaster: Hop aboard the crazy train with earnings reports this week. From energy giants to pharma powerhouses, each announcement can send stocks soaring or plummeting. 

Don't Fear the Bearish Whisper: February might be historically bearish for the Nasdaq, but don't let that spook you. Remember, past performance isn't always a guarantee of future results. Stay focused on your long-term strategy and don't hit the panic button based on short-term fluctuations.

Think Outside the Stock Market: Diversification is key! While stocks are important, don't forget about other assets like bonds, real estate, or even that vintage comic book collection (if it's actually valuable, of course). Spread your wings and explore different investment avenues.

Investing is a Marathon, Not a Sprint: Don't expect instant riches or overnight success. Building wealth takes time, discipline, and a healthy dose of patience. So, put on your running shoes, lace up, and enjoy the journey – the finish line will be all the sweeter for it.

On this day in history, February 2

1870: The 15th Amendment to the U.S. Constitution, guaranteeing voting rights regardless of race, is ratified. A giant leap forward for equality and a reminder of the ongoing fight for civil rights.

1904: The Russo-Japanese War erupts, highlighting the geopolitical complexities of the early 20th century. A sobering reminder that understanding global events can be crucial for navigating the financial landscape.

1924: The Winter Olympics officially debut in Chamonix, France. A celebration of athletic prowess and international cooperation, reminding us that sometimes, the best competition fosters collaboration.

1971: Idi Amin seizes power in Uganda, marking the start of a brutal dictatorship. A stark reminder of the fragility of peace and the importance of responsible leadership.

2014: Philip Seymour Hoffman, a talented actor, tragically passes away. A day to remember the impermanence of life and the importance of cherishing the present moment, even amidst market fluctuations.

The market this week was like a well-stocked pantry – a little bit of everything to satisfy your investing taste buds. We saw soaring seeds with Corteva, roaring engines with Ferrari, and even a potential proxy fight spicing things up at Norfolk Southern.

But remember, just like that questionable fruit lurking in the back of the fridge, not every opportunity is worth taking a bite out of. Do your research, manage your risk, and remember – sometimes the wisest move is simply… waiting for the next grocery run.

And as we head into the weekend, keep this gem in mind: "The best way to predict the future is to create it." – Peter Drucker. So, go forth, invest wisely, and shape your own financial destiny. Until next week, 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.

Advertising Disclosure: This email contains paid advertisements and we have been paid in some fashion to send this advertisment to our readers.

If you do not wish to receive this email, then we apologize for the inconvenience. You can immediately discontinue receiving this email by clicking on the unsubscribe link and you will no longer receive this email.  If you have any questions, please send an email with your questions to  [email protected]

We strongly urge you to read our full disclaimer here.

UNSUBSCRIBE 

TradersOnTrend.com

COE MEDIA.    1126 S Federal Hwy
Unit #827    Fort Lauderdale, FL 33316