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Momentum Monday - Higher Rates Taking A Toll
Howard Lindzon
October 02, 2023
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Good morning…
I had a long day of travel yesterday and just took the day off the blog.
For the first time in years I asked Ivanhoff to do the show himself. He did a great job and I embedded the show below.
One new feature of Momentum Monday is the ‘Social Momentum’ lists that Riley is putting together that table the stocks at 52 week highs with their Stocktwits follower count.
You can watch this weeks episode right here on YouTube. It is easy to subscribe, so please do and every Sunday you will get an alert when we post the show.
Chapters:
Social Momentum:
Over followed stocks flopped, while unknown names strolled to new highs.
Here are a few notable names,
Pfizer has more than 91,000 followers on Stocktwits. Last week, $PFE closed at a new 52-week low 4 out of the 5 days.
JD.com also dropped to a 52-week low 4 out of 5 days while the $JD stream sees more than 57,000 followers on Stocktwits.
Not to be out done by Block. $SQ secured more than 174,000 followers on Stocktwits and set a new 52-week low 3 times in the previous week.
Meanwhile, under-followed stocks crept to new highs.
CONSOL Energy has only 1,036 followers on Stocktwits, but $CEIX accelerated 11.6% and closed a weekly all-time high.
Ferguson flew 9.2% following Tuesday’s earnings beat. $FERG features only 186 followers on Stocktwits. The 33B Industrial company is wildly under-followed.
Here are Ivanhoff’s thoughts:
We saw a light bounce from oversold levels in the indexes. Now, the question is if we can see a follow-through day next week. This scenario is still in play despite the weak close on Friday.
The stock market has been in a correction since August. The only time most stocks bounced in the past couple of months is when interest rates pulled back. The correlation is crystal clear. It is all about interest rates until the next earnings season starts which is in about 3-4 weeks.
It’s hard to trust any rally for too long unless rates start to really come down. The 10-year yield is in a notable uptrend, which is a major headwind for equities. This doesn’t mean that we can’t see short-term bounces in stocks. We saw one in late August. It lasted a couple of weeks and then cratered. We potentially saw the beginning of another last week. Let’s see how long it lasts. Those frequent changes in direction can make you dizzy. This is why I keep saying this is not the time to be aggressive on both the long or the short side but it also doesn’t mean that I am not taking advantage of select short-term trading opportunities. One has to be super nimble and operate with a scalpel in this environment. I rather operate with a mega tractor but now it is not the right time for it.
Have a great week.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.
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