• Howie Town
  • Posts
  • Momentum Monday - Avoid Broken Trends That Have Too Many Friends...

Momentum Monday - Avoid Broken Trends That Have Too Many Friends...

As a reminder, MarketSurge (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from MarketSurge. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

Welcome back to Momentum Monday!

I am out of country this week in Italy …

Ivanhoff was good enough to do the show without me and as always he is great.

In today’s episode of Momentum Monday, Ivanhoff discusses the following:  

  • Slowing inflation

  • Commodities and materials

  • Energy

  • Failed breakouts

  • 10-year / risk-on trade

Remember that daily Riley on my team created the ‘Trends With No Friends email as well which is my go to list every day to track what is workikng and what is not. You can get it for free here.

In This Episode, We Cover:

  • Slowing inflation (0:00)

  • Commodities and materials (1:22)

  • Energy(4:24)

  • Failed breakouts (5:20)

  • 10-year / risk-on trade (8:53)

Here are Ivanhoff’s thoughts:

We saw a ping-pong price action in most stocks last week. First, Powell said that rate cuts are still on the table later this year despite rising inflation numbers lately and stocks rallied on the news. Then, Kashkari, who is a non-voting Fed member, opined that maybe there should not be any rate cuts this year. and stocks were slammed. Obviously, cutting rates this year matters to the market and the more the Fed waits, the more anxious and volatile the market is likely to become.

In the meantime, inflation expectations are rising. Gold, silver, and crude oil accelerated their ascent. Yields, economic activity, employment numbers, and wages are also perking up. 

Volatility has increased bringing more false breakout and breakdown attempts. Volatility tends to rise at turning points so I wouldn’t be surprised to see more of it as we are entering a seasonally weak period for US stocks. Granted, seasonality hasn’t played a big role so far this year and we certainly should not base our decisions solely on it. It is just something to be aware of. If enough market participants believe in it and take action, it can become a self-fulfilling prophecy. 

The tape has become choppier overall, offering great intraday trading opportunities and making swings more challenging outside the basic material space. I plan to remain nimble and focused in this tape. This is certainly not an environment where I want to be on margin or even fully invested overnight. The market is hot a few times of the year when almost any breakout works immediately. These are the times when it pays to be extra aggressive because they can easily account for 95% of our annual gains. We are currently not in such a market but things can change quickly.

And here are the charts discussed:

PS - Riley has brought back a fave FREE daily newsletter we created called ‘Trends With No Friends’ which covers ‘new highs and new lows’ and measures the followers (friends) on Stocktwits versus the prices. Subscribe here.Small Caps

Join the conversation

or to participate.