I went to one who had the reputation of wisdom, and observed to him – his name I need not mention; he was a politician whom I selected for examination – and the result was as follows: When I began to talk with…
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The stock market has been very thematic since the March 2020 COVID lows as investors try to invest in an environment of extreme uncertainty.
There is a debate among economists about whether we are on the verge of one of the greatest economic booms in history or whether the current market rally is the bubble of all bubbles. The consensus view reflected in market prices is the former. The latter is the correct one in my opinion…
Those who know me will be surprised to learn that I bought shares in Coinbase (COIN), the leading cryptocurrency broker, on Friday in the wake of its 1Q21 Earnings Report Thursday afternoon. That’s because my intellectual roots are in Ayn Rand, Ludwig von Mises, The Austrian School of Economics and therefore the gold standard. As a consequence, I’ve tended to be of the mindset of Warren Buffet toward Bitcoin and cryptocurrencies in general when he called the former “rat poison squared” at Berkshire’s 2018 Annual Meeting. However, that doesn’t mean I can’t trade it profitably.
The catalyst for Wednesday’s selloff was a hotter than expected April CPI Report. Overall inflation came in at +4.2% year over year and +0.8% month over month. Core CPI, which excludes food and energy, was +3.0% year over year and +0.9% month over month.
Most analysts have been characterizing the current rotation in markets as from Growth to Value. However, while on Monday the S&P 500 Value ETF (IVE, -0.02%) outperformed the S&P 500 Growth ETF (IVW, -1.95%), on Tuesday growth (-0.43%) outperformed value (-1.35%). This calls into question the Growth to Value narrative.
A very important divergence is taking place in markets between the tech led NASDAQ and the broader market as represented by the S&P 500.
Many technicians are starting to note that Tech stocks are breaking down. I have been all over the false breakout in the QQQ so I’m simply going to update the chart through Thursday and point out that we’ve now closed three straight days below the February 12 close of $336.45.
Two weeks ago this morning I led with “QQQ: Failed Breakout Watch” (Top Gun Financial, Wednesday 4/21). Well, yesterday the QQQ broke down below its February 12, 2021 closing high of $336.45 to close at $330.14.