12/5 Recap

We had a nice pop off the open as yields fell but it was quickly sold off. I want to be optimistic and tell you things are ok, but right here we’re on our 4th straight 8 ema test, that isn’t really a sign of strength as we would be pulling away if that was the case, instead it is flattening out and the RSI is rolling over, the MACD also should finally inflect negative tomorrow. So right here, you probably want to be cautious in the short term. Maybe sell covered calls if you don’t want to sell for tax purposes, whatever it is, a short period of weakness looks here, after all, we’ve gone sideways now for 2 weeks and bulls haven’t been able to make a push. On the otherhand it’s hard to be bearish when the largest market cap company in our markets Apple just rose 2% to a $3T valuation right below all time highs.

Yields continue to dip which is bullish for equities, but the divergence between yields going down and stocks not going up is worrisome. I’ve said for a while TNX looks like it wants the 200 day just over 40 and now it looks like it is destiny that they meet at some point soon. Ideally this would keep going down and equities up, but equities aren’t cooperating the last 10 sessions as this has fallen 5%. So again, this is why caution is warranted.

Recent Trades

Coinbase, I don’t even know what to say on this one. I highlighted it in the 11-24 recap when it was 116, here we are 2 weeks later at 146 and it has been just a ridiculous move. Those December 120 calls for next week are up like 10x in that timeframe.

GTLB was another small cap that kept popping up in recent recaps with 3 bullish trades and 1 bearish one, it was up 16% at one point on earnings afterhours yesterday.

Trends

1 Week