12/4 Recap

We got a big move down in big tech. A couple analysts sounded the alarm bells today on Google with their GCP margins and on Microsoft with their Co-Pilot. Tesla also had sales down 18% year over year in their most important market, China. It sparked a furious selloff with the /NQ down 300 at one point. Large caps are up so much from late October, they really don’t need an excuse to take a breather, but today gave them one. Market participants have completely forgotten about large caps as the IWM rally continues with another near 1% day.

The IWM remains the leader recently and looks fantastic albeit overbought at the moment. It has room up over 190 where it should meet some resistance. An index being up 10% in under 3 weeks is pretty remarkable, but nothing surprises me anymore as all the moves we see are just so violent in both directions these last few years like due to the rise of 0DTE.

The SPY tested the 8 ema for the third straight session and so far has held its ground. It’s weakening with the RSI cooling off and the macd looking to roll over but it still hasn’t. That gap below just over 440 remains where I’d look to put on the next longs.

The RSP, the equal weight SPY, is barely down and also getting overbought. This continues to outperform as now everything except big tech is working. Markets just go through these rotations, everything else was ignored for so long, but big tech is really all we have. That’s why it’s 30% of the SPY weighting, but when everyone is long the same handful of stocks, they always pull them down for a little bit and induce some panic. Big tech will be fine, and it remains the best place over the medium to long term.

Recent Trades

I noted SPOT back on the 11-24 recap after a couple odd buys and today they announced mass layoffs and the stock spiked 9% to now 196+.

HOOD was one I highlighted back on 11-29 and it’s up 10% quickly in a few sessions since

KOLD was a levered ETF I highlighted in that same 11-29 recap and it is up over 7% today to $89 as the name is up 15% in 5 sessions since. These 115 calls haven’t worked out yet but they still have 4 days, directionally they were right on Natural Gas crumbling quickly and that’s really more my focus is pointing out the direction on a trade.

So just keep your eyes peeled on the names I highlight daily, there’s lots of good stuff in there more often than not for you to pick from to trade around.

Trends

Lots of small caps are popping up in the short term trends again. Amazon is back to leading on all timeframes, so many big trades have been put on there as has been the case most of the year as its run 75%. You can definitely see the sentiment shift here as the only megacaps to show up in the top 30 of the past week as bullish are Apple and Amazon and they’re the 2 strongest ones today. There really hasn’t been much on META or GOOG and they don’t even show up on any timeframe but they’ve definitely been the weakest of the megacaps over the last 3 weeks.

1 Week

2 Week