Hello Traders, Welcome to this week’s newsletter. This week is all about a strong dollar and earnings. As I have written before, the market is closely monitoring how a slow economic forecast will impact companies’ guidance and earnings and it’s also patiently waiting to price where SPX should accordingly be. The Big Picture Morgan Stanley ... Read more
Hello Traders, Welcome to this week’s newsletter. Earnings season is starting and it’s time for some serious reflection. Are the earnings going to disappoint and thus we will see SPY and other indexes moving lower? Or, are we going to see resilient companies that continue to extract profit despite the macro conditions? If I had ... Read more
Hi Andrew, I just wanted to finally take the time to write you an e-mail just to say thank you and all of the BBT and PCT moderators I started into the community at the end of July last year, so coming up on my first year with BBT. I also attended boot camp in ... Read more
Hello Traders, Welcome to this week’s newsletter. In today’s newsletter, I am going to discuss one of my biggest positions going into Q3 and my thinking behind it. Last week, we experienced a rally as expected, and now all eyes are on this week to see if the rally will continue. One of the major ... Read more
Hello Traders, Welcome to this week’s newsletter. The market is now in a rally mode after one of the worst weeks in history. This short-term rally could have been expected as market internals were demonstrating an oversold condition. This incredible chart by MrBlonde shows precisely what we experienced last week – three standard deviations away ... Read more
Hello Traders, Welcome to this week’s newsletter. Tomorrow is the second day of the Fed’s FOMC meeting and this is the first time in the last few years that the market is completely clueless on what the Fed will do. On the one hand, traders are almost certain that a 75 bps increase will happen, ... Read more
Hello Traders, I hope you are well and enjoyed your weekend. The bear market continues. Firstly, I hope everyone is staying safe in this market and following strict risk management. This is not a market to take excessive risk in, even if we see short-term rallies. Nasdaq just finished its seventh week in the red ... Read more
Hello Traders, I hope you are well and enjoyed your weekend. We are entering another week of uncertainty in the market. Are we heading for stagflation (high inflation and low growth)? Is inflation slowing down? The answers to these questions will definitely impact how the market reacts and moves this week. The Big Picture Sentiment ... Read more
Hello Traders, I hope you are well and enjoyed your weekend. While I know this will be a difficult week for looking at your long-term portfolio, I want to provide some commentary that could potentially help in the short term. All eyes are on Wednesday’s inflation numbers. Has inflation peaked? Or, are we still running ... Read more
Hello Traders, I hope you are well and enjoyed your weekend. Over the weekend, Berkshire Hathaway held their annual meeting, this time live, with an audience for the first time in 3 years. Both Warren Buffett and Charlie Munger were present and talked about the state of the market and their business moving forward. One ... Read more
Hello Traders, I hope you are well and enjoyed your weekend. We are heading into another choppy week in the market with all eyes on big tech earnings. Major heavy hitters in the market will be reporting, with Microsoft and Google reporting after hours tomorrow. The guidance these companies give will be a very important ... Read more
Hello Traders, I hope you are well and enjoyed your long weekend. We are heading into another choppy week in the market with all eyes on big tech earnings. The Big Picture One of the primary things I am looking at this week is the bond market and whether or not rates have topped out. ... Read more
Hello Traders, Hello to all of our new subscribers and welcome to this week’s newsletter. This is where we discuss the market and use a top-down approach to come up with a trading opportunity. The Big Picture The theme in the market remains the same. The yield curve continues to flatten and invert, and that ... Read more
Hello All, Welcome to this week’s newsletter and my apologies for missing the past few weeks. You can expect this newsletter on Monday’s every week moving forward. The theme remains the same, we discuss macro and big picture and work our way down to trade idea generation. The Big Picture This week is all about ... Read more
Hello All, At the time of writing this email early Monday morning, the market seems to have bounced very nicely and is slowly climbing back up all the ground it lost in January. The question now is whether or not we will see a continuation of this heading into next week, or is this but ... Read more
Hello All, Welcome to this week’s newsletter. We are heading into another week of sell offs due in part to geopolitical and rate risks. We did, however, see some signs that recovery was on the way when, late on Friday, VIX went into backwardation. For this week, we have some major earnings being reported and ... Read more
Hello All, Happy MLK day. Welcome to the second newsletter of 2022. Last week turned out to be quite interesting based in part on everything that was emanating forth from the Fed, including of course the inflation numbers. Despite the unfolding sell off, I mentioned early last week that we remain very much in a ... Read more
Hello All, Welcome to the first newsletter of 2022. I am planning to send this newsletter out every Monday in order to help traders navigate the trading week with some data-driven insights. This week is all about the inflation numbers being released on Wednesday. They are important and they will likely dictate how the Fed ... Read more
Hello All, Welcome to 2021’s last newsletter. This is a very important week given Tuesday and Wednesday’s Fed meeting. Aside from that, we are seeing continued pressure on higher valuation stocks as well as inflow back into utilities, staples, and other defensive sectors. It is so critical to be running a long and short portfolio ... Read more
Hello All, Welcome to this week’s newsletter. Last week was definitely tough for the market, with defensive sectors being the only ones closing slightly in the green. As I mentioned on Friday, the fact that money is continuing to flow into these defensive sectors is a good sign for the equity market. Pockets of strength, ... Read more
Hello All, Welcome to this week’s newsletter. We are entering into a new volatility regime of VIX being above 20. I personally do not think that VIX will stay above 20 for long, but it is important to respect where the volatility is at currently and to then trade accordingly. I explained four different volatility ... Read more
Hello all, Firstly, I want to wish a very happy Thanksgiving to everyone who is celebrating the holiday! Due to this being a shorter week, there is not quite as much going on in the market. The Big Picture We have now entered into the final six weeks of trading for 2021. Historically, we see ... Read more
Hello all, I hope you had an amazing weekend. We are getting closer to the end of the year and historically, December and November are great months for the stock market. I am sure you have heard of the “Santa Claus Rally.” Below is the S&P500 return based on seasonality. As you can see, both ... Read more
Do you remember the market crash of 2020? Well me neither! We had one of the fastest recoveries on record, and in a span of 2 years the market has doubled in value! This has most investors on their feet worrying about a correction which might be on the way. Interestingly enough, every time the ... Read more
For the past 20 years, June has been one of the worst months of the year with only 40% of the time being positive. Whether this year will follow the trend is dependent on two major economic data: the job report and the CPI. The job report that was released last week was lower than ... Read more
This past Wednesday, inflation numbers were released and, as expected, they created jitters in the market. The speed at which prices rose month over month resulted in a major sell off. We were fully hedged by being long VIX, which is something we discussed in our last biweekly market update. Our $20 strike VIX calls ... Read more
When we were rebalancing our portfolio in early December, we looked at many reports by investment banks in order to gain a sense of what the S&P 500 was expected to return at the end of this year. The majority of researchers were indicating a return anywhere from 7% to 12% – for the whole ... Read more
President Joe Biden recently proposed a $2 trillion infrastructure bill to repair America’s crumbling infrastructure – an infrastructure that has earned a C- score from the American Society of Civil Engineers. Biden elaborated that his plan is to “… put us in a position to win the global competition with China in the upcoming years.” ... Read more
Long QQQ Short The VIX There has been an ongoing debate in the investment industry when it comes to value and growth. Value had a fantastic run after the dotcom bubble burst in 2000. However, the last few years of the 2010s tipped the scales in favor of growth, with many high-flying tech stocks returning ... Read more
From Steep Yield Curve to Tax Breaks: What caused the 2021 and 2016 sell-offs, and can we predict how the market will bounce back? The markets appear to be rebounding this week after a few weeks of selling off, especially in tech and growth stocks. Our research shows many similarities between the last weeks’ sell-off ... Read more
SPACs were the hottest thing in 2019 and 2020, however, in the first months of 2021, they have failed to outperform the S&P 500. So, what is the reason behind the recent underperformance of SPACs and are we seeing signs of a potential bubble burst in this speculative market? In this article, I am going ... Read more
In this week’s newsletter, I am going to discuss the impact of rising rates on the market. We’ve seen a massive correction in many of the hot tech stocks that had run up by over 100%. In some cases, they’ve now dropped by as much as 50%. For example, Tesla, the market’s golden child, dropped ... Read more
In the first week of September 2020, retail traders (trading less than 10 contracts) made $11.5 billions worth of trades in call contracts, 9 time the weekly average. In comparison, U.S. consumer spent $91 billions on lottery tickets in 2019. It seems like the free money analogy has finally come to fruition and many retail ... Read more
So who has been the biggest winner in this pandemic? Looking at the Russell 1000 index, it is prominent that companies with lower leverage on their balance sheets, have been able to outperform their counterparts with higher leverage. While during boom times, income statement prospects such as revenue and EBITDA dictate equity valuation; In bad ... Read more
Is fixed income as an asset class no longer able to provide ballast against equity sell-offs? With zero lower bound interest rates(ZLB), the investors fear rates will not be able to fall far enough to provide the safety expected from bonds. In every other major recession, the Fed has had the room to decrease rates ... Read more