$AMD EV/ ebitda ratio is currently 39x historically it has traded at 20x the last 5 years. TA is great but a little fundamental analysis tells us that $100 level May not hold. P/e is also around 40x 20220410_124607.jpg187.24 KB
The weekend update noted that 458 is our next stop and that looks on the agenda for Tuesday stonks.chat/group/7/posts/296
Trade: flipped AMD for a decent profit. Unfortunately I bought it right before the 4 point drop on the SPY, so had to average down. Worked out OK in the end, but AMD wasn’t quite moving at the pace of the SPY. Something is still sitting on it. See $AMD for trades.
Trade: SPY 450c I traded a few times. This worked out as well, as you can imagine. See $SPY for trades.
China has started locking down millions of people in its zero tolerance policy, but I don’t think this will last long. They do not want to go into an economic stalemate again.
No progress in Russia/Ukraine event.
Looking Ahead (Tuesday)
Consumer Confidence Index will be released at 10am EST. This is a measure of how optimistic or pessimistic consumers are about their financial situation. Unless it’s a shocker (doubtful), won’t move market.
Fed Harper speaks at 10:45am
AFRM - on watch for entry. I should have went in today.
AMD - my flavor of the week. I’ll trade it up until SPY 458.
10Y Treasury is at 2.5% now….it was 1.5% on Jan 1. 🚨
Chart - SPY - it’s just chugging as expected so far. I think we’ll see 458 on Tuesday and then run into some headwinds. If it pulls back, it might be a significant one - but I don’t really see anything significant enough to pull it back until Thursday’s PCE data. More likely to hit 458 and cruise until then.
Before we get into the upcoming week, I need own my bad call & trade from Friday's market update.
If the SPY opens anywhere near 440+, I'll be buying puts for 4/1. It should pull back several points and consolidate to cool off from this run.
I didn't wait until 440 on the SPY (bought a little after the open) AND I bought QQQ instead (much worse in this case) AND I didn't cut it once I realized I was wrong (early). That bull was stampeding and I just kept getting trampled on. I did make a few other trades that helped lighten the blow (AMD and SPY calls), but I held the QQQ puts over the weekend hoping (dangerous) that the market will just pullback a little...
With that out of the way, on to the Week Ahead for March 20, 2022.
Monday: Nike NKE will give another signal on retail spending.
Tuesday: BuzzFeed is...public? 😏
Thursday: I'd say $NIO is the earnings release of the week. What was said from China on Friday was positive. This quarter won't include any slow down due to their COVID lockdown (which is changing to be more lenient). This one probably has legs. On my radar.
Monday-Friday: We've got Fed Presidents speaking all over the place. Just look at calendar and expect one of them to go off script and the news to pick it up with a fun headline. JPow on Monday and Wednesday.
I note a couple agenda items being 'digital' and 'cryptocurrency' - so $BTC will knock around a little.
Thoughts
We are coming off a very strong rally last week. We ended the week with the SPY at 444.50 after touching 416 on Monday. That's...impressive.
What's amazing about it, is that it was after the news of a stream of rate hikes incoming was delivered. It was indeed delivered with some tasty sugar coating...but it is still a huge tide change from what the market has been used to for the last couple years.
I thought it would cool down on Friday but was wrong. We had positive news out of China (at least what the headlines read...) from the Biden-Xi meeting that helped give it some tail winds, as well.
Since the market doesn't seem to care about the interest rate hikes - for now - the only negative I see present is the Ukraine/Russia situation. It's just not getting better, every talk seems to fail. Ukraine is slowly grinding into desperation (sadly) and they'll give into more of Russia's demands - and it'll be up to Putin if he is willing to accept that. I still don't understand what he truly wants. The market has likely absorbed this as-is for the time being.
Does the market take a breather this week? Or is this the bottom it was looking for and now retail thinks it's safe to jump back in? Let's take a look at the charts.
Trade ideas: NIO (earnings this week, positive sentiment out of China), $MOS $IPI behind ongoing fertilizer supply constraints, $AMD (it's still lagging the tech rally, NVDA has an investor event on 3/22)
Charts
SPY - it's overbought on the 30M, last time it was like this was Wednesday at the open, but it then dipped 8 points - but I don't think it's a fair point because that was FOMC day and the initial readout was that drop. It worked the overbought out and pushed higher by end of day.
SPY - the Daily suggest it could keep going. It reclaimed the 300 and 250MA and it is on track to reclaim the 200MA on Monday at this pace. I wouldn't be surprised if this touches 450 this week - which is the 150 MA, but I don't think it's got the juice to cross over it.
QQQ - VERY overbought on the 30m and MACD looking topped out on the Daily, but it crossed 343 which was important and is staring right at the 50 MA. I do think this one is going to pull back a bit just on technicals. It's running very hot. My puts hope I'm right.
QQQ - 317 on Monday to 351 on Friday. Goodness... 😬 Well done, bulls.
I am going to hang tight on SPY/QQQ after I get out of this put. I'd say we're in "could go either way" territory, but a pullback (not much) seems most likely. I think there's more to be gained playing individual stocks with events/stories this week.
ADP report premarket revised the January report that caused so much confusion from -300k to +500k. Say what? Then showed +475k for Feb. So, was the BLS report right, after all? I don't know what to believe with these jobs reports anymore - and the market is caring less, as well.
I was also caught off guard by JPow. He had his testimony before the House today - and he all but said he'll be doing a 0.25% rate hike. The market liked that, especially since many were expecting 0.50% hike.
Ukraine: We got some hope that a ceasefire is on the table.
Trade: I closed out my overnight $MOS calls at 4.75 (from 4.45)
Trade: I closed out my $SPY calls at 14.50 (from 13.48) - sadly these went on to 17.50. Grr!
Trade: I did some more research on $MOS and decided it was worth a swing trade (hold for a few days) and added back the March 18 50c and some April 14 50c - see $MOS for those trades. Remember, this is the fertilizer play (on tightening supply due to world events)
Trade: I also (poorly) traded AMD. It was an obvious one this morning just screaming at me, I took the quick scalp, but should have held it way longer. It roared most of the day. This is my favorite tech company to trade.
We ended up +8 points today on the SPY and closed just over the 250MA - nice rally, mostly on the back of JPow's comments this morning.
Looking Ahead (Thursday)
I don't see any economic data on the calendar that matters in premarket. We've got JPow again at 10am, but this time in front of Senate. I am guessing he's just going to mostly repeat himself? The only landmine I can think of is if they push him on the balance sheet.
Trade: I might pick up some more $MOS if it continues to inch up. Liking this one. They're the largest in this space in the US, have plenty of cash, pay a dividend, and announced accelerated buyback - and are now in a spot where their product has tight supply.
Trade: I'll have my eye on $AMD again. If the general market is moving higher, this should outpace it to the upside.
Chart: 30 minute chart approaching overbought on the RSI only. MACD looks fine. Daily chart says we could keep moving up, pending any extreme news or balance sheet landmines from Senate.
