Markets with no fear and on a tear...

Markets with no fear and on a tear...

Markets have been on a tear after the huge drop in Q1 March when we dropped around 12K points on the DJIA and have recovered over half of these points already.. But that is not the main story here - the DJIA, a closely monitored daily index is not reflective of what is happening in other bubble areas of the NASDAQ and software companies which are trading at multiples unheard of even in the dot com bubble days... And no matter what anyone says - or the talking heads on Bloomberg or CNBC - these prices for the stocks are driven entirely by nothing else other than Fed policies and actions. There call to basically monetize anything and drive rates to ZERO during this pandemic - along with now going as far as loaning money to businesses is beyond belief.. The Fed has clearly crossed its mandates without any regard for the future of this nation or the debt that is entailed on our future generations. We utter or throw words of TRILLIONS as if it is a joke - now the US is indebted and the Fed's balance sheet is now growing like a weed..with no Roundup.. Over $6T and heading higher - we wish we had a money printing machine to print unlimited money in our backyard with no repercussions or consequences for our actions - at least that is what these bozos at the Fed and in the government think.. It is just keep printing and there is no way in hell we will ever pay back this debt - EVER!!!

Machine trading has taken over markets - stocks are moving over 100% in a span of less than a month and not one talking head or the Fed comes and says - yup this is a bubble... Totally out of it - they will all be out of their positions at the Fed when the bills come due and earning millions at private banks/institutions and will be called saviors.. No wonder sometimes we agree with Trump - that there is really fake news and propaganda out there to keep this bubble growing - companies with ZERO revenue growth and revenues trending down and folks come on TV and analysts screaming new targets and buy recommendations - unheard of in the last 30 years.. There is ZERO sense of price discovery any more and no regard for revenue, PEs, P/S ratios, margin and name it - no metric matters.. It is just trading and some justification is provided for why the stock price is where it is.. Just take a look at AMD, NVDA, SHOP, COUP, TTD, CRWD, ZS, ZM, OKTA, DXCM and many more - trading at numbers we would consider not just in the stratosphere but beyond... But what does this mean - as long as the Fed rates are ZERO and policy is accommodative you have to trade this market and make money. Trading intraday or overnight and using options has been a really profitable way to make money.. And with the volatility in stocks as high as it is now - there is no way you cannot make money.. Machines are trading and the where the machines are buying and the market actions and stock intraday volumes are very reflective as to how the action during the day is going to be.. The list above is very useful for making money and monitor these stocks and you will see what we are saying - SHOP has moved over 100% in less than a span of a month.. Think about it - people are giving money to the US government for 10 years at 0.3% and this stock moves 100% in less than a month... Yup it is not a bubble...!! The Fed is asleep and is actually just acting as ignorance is bliss or are fully aware but refuse to bring reality and real price discovery back to markets...We are truly in a different era and market model and what I call the Twilight Zone markets.. 

Here are some charts for your perusal - just huge moves and if you were smart you would have bought as the VIX was in BUY territory... just take a look at the bounces of the recent correction - staying long as we expect DOW and SPY to hit brand new highs next year - 40K for the DOW and 400 for SPY.. 

Also check out our buy/sell signals in charts below and on our stockcharts page along with our screeners - truly awesome.. 

We will be adding unlimited trading for $30 on our site soon - so for all you options traders (stock trading is ZERO commission) and unlimited options trading will be $30.. No one offers that except us in partnership with Tradier brokerage - options commissions on per contract basis are half of all the other brokerages.. $0.35 per contract vs $0.65 for all others.. The $30 unlimited trading has no limit or minimums..

  

 

and many more on our site at www.trucharts.com/stockcharts.aspx.

make money while the sun shines.. long any tech stock.. Wait on leisure stocks for now till August..

Bob B.

Founder - Trucharts.com

Bullish tone and wild markets - making money like crazy

Bullish tone and wild markets - making money like crazy

There are now some bullish undertones in the market with the VIX which had risen to an unsustainable level was a good sign that the huge bounce was coming. It was not only obvious from the VIX but also from many technical indicators that had become extremely oversold.. Many stocks had been driven own to the 200d MAs and the machines were starting to kick in - just check stocks like AMD, NVDA and SHOP. These are amazing times to make money in both directions long and short and that is why timing matters no matter what anyone says.. You could tell from the indicators that the markets were very stretched before the huge pullback and it was a big nasty correction of around 35% and if you were keeping an eye on the stocks that had moved down, you could have made a ton of money on the short side. And this rally we saw today was very expected based on the recent price action over the last 2 days of the previous week. The markets and many stocks were bouncing of the recent lows and today these stocks moved up very nicely and this was an excellent opportunity to make a lot of MONEY.. That is why we say technicals are important to understand and use as a way to make trades. We are sticking with over night and intra-day trades and that is the most optimum way to make money. There is nothing like buy and hold and go tell that to the guy who has been holding on to XOM and CVX and WYNN and see what he says...about buy and hold strategy..

Options are another way to really enhance your returns and yet people do not want to even spend 5 minutes a day to learn basics about options and how they can boost your returns.. I feel sad for these people... Educated engineers and scientists who will delve into complex equations and designs will not spend even 30 minutes a day or even a week to figure out simple technical trading skills and learn basics about options - what a joke.... Anyway - we are recommending to go long here and the markets are down quite a bit and we think the DOW (DJIA) has to move to around 23500 and all the components of the DOW should also move up - we like every stock here except oil related stocks.. Tech stocks are a good bet for trading and we like BA - Boeing (we are long) and WDC... we closed our ROKU position but we still like it on a pullback - check out EXAS and PANW for some good trades. We like DE, CAT, ISRG...

Follow us on twitter @trucharts for our daily updates and stock picks - also check the screener on our site along with the stock charts page for real time charts, quotes and fundamental data.

We are working on a technical alerts system from our site and this should be ready soon..

Good luck trading..

Bob B.

Founder/CEO

Trucharts.com

Schizophrenic markets, Fed Reserve, Powell and markets moving up, FAANG stocks

Schizophrenic markets, Fed  Reserve, Powell and markets moving up, FAANG stocks

Well the man with balls - lost them over Xmas and New Year's eve - you know who we are talking about - none other than good old Powell himself.. I guess he had a good chat with grandma Yellen and good old bubble maker Bernanke himself and suddenly had his balls chopped off for being too aggressive and making the rich poor - oh we feel for the rich!!! What a fucking joke. Markets gyrating 1000 points in a day, 700 points - guess we have to get used to these type of moves. And then we have the blabber heads on TV trying to explain these markets. And non stop talk about the Fed and their constant analysis - just annoying - it would be nice to have a channel where no one says anything. Yet have you heard anyone yet mentioning that the bubble is falling apart. Somehow the Fed roll off the balance sheet is now being questioned after the teachers of Powell (Yellen/Bernanke) made some noise on Friday and everyone was excited. Again we are coming off very oversold conditions and several stocks are bouncing of key moving averages. We like any stock here for the short term - normally all stocks in the indices will move with the move up. so the FAANG stocks are also good for the ride up. Banking stocks look strong on charts - again be mindful - we are talking about some short term moves here and these can be used to trade intra-day and for overnight positions. Obvious names come to mind - FB, GOOG, SHOP, GRUB, NFLX (which moved up and we think it is going to 300). There are many other heavily shorted stocks that also have high betas.

Here is an article worth reading:
https://www.zerohedge.com/news/2019-01-06/ugly-truth-you-wont-hear-fed

The AAPL news was expected - it was obvious based on the suppliers indicating that their biggest customer (as if this was a big secret) was canceling orders - so the news from AAPL should not have shocked anyone and it was also obvious when the stock started falling after the last earnings report. As expected the stocks dropped and the once darling of Wall Street lost a total of over 350B in market cap value - that is the whole market cap for FB - and we say the markets are not over-valued or expensive - this is actually happening - everyone is in equities and the ETFs do not help - we think ETFs should be banned - these distort markets and are really another way for Wall St to just make more money. How are these different from mutual funds - there is really no difference.

AAPL will need to change its approach on the next generation phones and there is nothing new on the horizon and specially this paying $1000 for a phone days are over. These companies need to start realizing that after a certain point - (same as computers) - people are not going to pay up for small feature improvements and there is a lot of competition in this space. Competitive phones are cheaper and better. A good phone should be no more than 500 - yet all these companies keep pricing themselves out of the markets. As you can see Samsung and AAPL are losing market share to Chinese competitors all around the world and we expect that prices will trend downwards as we may have reached the peak with IPHONE X.

There will be backlash as ordinary customers will stop paying these high prices being pushed onto them. This is going to be the next computer - lots of competition and prices will start to come down. There is a lot of buzz around 5G - we expect some noise around this - but it will be short lived. Prices will not be going any higher from here on forward. This means it will impact margins not just for AAPL, Samsung and others - but also their downline suppliers - they will be put under pressure on component pricing.

We would trade the markets here as earnings season is upon us - watch the man without the balls now - Powell - who changes his tune every couple of weeks. He is like a management trainee..

We are expecting to launch our new revamped site with new features and buy/sell directly from our site towards the end of Jan - slight delay to our original planned date.

Time to go and make some money.. Good luck trading.

HAPPY NEW YEAR 2019..

Trucharts team/Founder (Co-founder Jetstox.com)

Our latest thoughts on markets, Bubbles, Housing, NVDA

Our thoughts on housing, NVDA, ALGN and bubbles:

Written on 11/01:

Housing Correction coming, Bubbles, and how we held our NVDA short for over 2 years - patience is a virtue in the markets - what stocks look vulnerable and why we think HD is going to less than 50.. Well, what we expected finally happened - fortunately we were prepared for this big move down and we think more is coming - we used our indicators to monitor and these were confirmed once the move down was triggered.  We believe this pullback and move down could last longer than anyone thinks. Bear market rallies are fierce and vicious, and these tend to fool the ones who are still hanging on to their hats, praying for the move up so they can liquidate their positions which were acquired a lot higher. Unfortunately praying and hope are not the answer. 

We have shown here our short portfolio and our long/short portfolios below..

We know that there are some impeccable indicators that clearly show we were approaching a top in the markets - here they are: AMD stock - Masayoshi investing money like it grows on trees (which we guess is partially true), and ETRADE ads on TV showing trading can make one a billionaire.. Very standard ads - we live in a world where we are easy to forget the past, and repeat the same mistakes in a different form at a later time with a different group or generation of folks.. It is called wash, rinse and repeat - the big guys know it and they play the game well. Suck in everybody - make them high and drunk - then kick them out onto the road.. Works perfectly.. been there done that.

We have been warning for several weeks now that we are experiencing one of the most massive bubbles ever - ridiculous valuations - excessive risk taking with no regard for risk. Eventually someone has to pay for all this money printing. We believe the Fed has realized there is a massive bubble in stocks and is focused on pricking the bubble. Well, they are succeeding. Not a single soul and crackhead on TV has uttered the word bubble - CNBC, Bloomberg - you name it - all these assholes come on TV acting like they are gods of the stock market - everyone of them is a pump and dump ass.. Trust us - we know this very well - when one analyst came out and pumped up NVDA - all the asses on TV said it is going higher.. It is the most expensive semiconductor stock in the world - trading at over 15 time P/S - there is ZERO justification for that and guess what my favorite top of the market indicator did - that Masayoshi idiot invested in NVDA. We had shorted it all the way up at every 20% move and then also bought the long term puts. Agreed that we missed this bull run - but sometimes you have to use your gut and sit through it - trust us - we have learned patience from markets. And this mistake will never happen again.. We know how to manage such a situation much better next time around. BTW - whatever happened to that analyst - did he get fired - nope - we know that in these firms, the firms will be short the stock, and then their analysts will come and put a buy on the stock while the firm is shorting at the same time.. It is a well known technique/practice - but will never get out to the public - well now you have it.  Another one of our favorite shorts and overhyped stock ALGN - what a joke - company does 2B in revenue and market cap was over 35B - how does this make any fucking sense.. (We are allowed to cuss in our own blog!!) - I can tell you people lost their shirts in this stock as it dropped over $80 in a week and over $170 in 4 weeks. Margin calls are running around the trading desks.. We were long ALGN puts right before earnings.

Housing in Bay area - here is our open prediction - a 30% correction is coming.. We said it and are putting it in writing.. There is a 100% stocks to housing correlation in Bay Area and once all of the stocks come back down to earth - so will housing prices - we are already witnessing price reductions of over 100K in a week for eager sellers.. Unheard of again - where people were jumping over each other to overbid and paying top price of over 200K-300K on average over asking - now there are no buyers - whoever is out buying - is going to regret it very soon.. Just a 20% reduction in price will instantly eliminate all your equity.. It is coming - wait and watch. This is the main reason we think HD stock has to go to 50.. all the days of renovation and flipping are coming to an end.. The SALT and HELOC deductions will devastate the Bay Area - watch - Trump knows it. Prices are coming down in NY, Denver, Australia, Hong Kong, Canada, UAE and India.

We are short and stay short NVDA, ALGN, NOW and many more overhyped and overpriced stocks. We will buy when there is blood on the streets.. It is unfortunate that many people will end up losing (wise ones will sell and take their profits) while all the suckers who are still drunk and high at the party will be stuck with a big shock.. It is also unfortunate that the Fed and all Central bankers have made the world (along with China) addicted to bubbles.. They have not learned that human behavior does not change just because of a single or two  incidents (2000 and 2008 crash) - people will take more risk when money is flowing like water.. No one is talking about all the pension funds, government liabilities, and many more government entities that will suffer consequences of bubble markets - it is sad and it would have been better had the Fed and central bankers had taken a more gradual slow and steady approach - we might have been in a much better position. Yet they do the same - wash , rinse and repeat.. So take profits while you are up - and do not end up crying later..

We will be announcing an amazing offer for equity trading from our site directly very soon - an unbeatable offer - that will rock your brain.. It is coming - stay tuned.. and keep checking our site..which will also be completely revamped.. 

Also check our call on Chinese Yuan to USD targets on our twitter handle @trucharts where we post our trades and our previous blogs. 

BTW - sell AMZN and we are short NFLX.

Short portfolio link on Twitter handle - (@trucharts)

      https://twitter.com/trucharts/status/1063793651552182272

Long portfolio:

Good luck trading..

Founder/CEO/Team at Trucharts.com   

Bubbles everywhere and new highs and extreme complacency

Bubbles, Bubbles and more of it...

This is what bubbles of made of - low levels of volatility and no respect for risk. We are now in a massive bubble and it is now looking like it may also beat the 2000 bubble. All around me I see people discussing stocks and trying to make that quick buck and let me tell you in this type of environment it is very easy to do that. Extreme liquidity from all central banks and the Yellen, Draghi put is making this market look even more risky day by day. But right now everyone is high and happy - as every investor thinks that stocks will never ever go down and there is no risk. Stocks like IBM, UNH and big cap names moving over 10% in a day is not a normal market. Stock rebounding on bad news is not a normal market. All news is good news, even if it is manipulated from an earnings perspective. All valuation metrics are above and beyond the previous bubbles and we have literally created money out of thin air. Central bank balance sheets are loaded with debt instruments, company valuations from a Price/Sales and PE ratios are at highs that eclipse the previous bubbles. There is total disregard for risk and yet no one cares - everyone acts like this is normal price action. Take for example IBM - they beat earnings because of their tax rate - and their tax rate - a phenomenal 11% - yes you read that right - a company as big as IBM pays a 11% effective tax rate and us normal folks pay at 30%. Their revenue was marginally higher and yet the stock was up over 10% in a day - think about it IBM up over 10% in a day. ADBE reported numbers that were slightly higher than the analyst estimates for 2018 and the stock jumped over $15 in after hours - yes that is right over 10% move in a single day. Yet we have the TV talking heads all acting like this is normal and there is no bubble. We do, my friends, and I have lived through two of these and this is the 3rd one - but this is not only a stock bubble it is like a loaded gun - completely leveraged - with housing, stocks, debt, and bonds all at all time highs and we are supposed to act like this is normal. 

Our good old friend Masayoshi from Japan is back and making the rounds - he lost over 70B in the last bubble - yet people gave him money again and he is running around like a boy in a toy store making stupid investments in companies that will never survive and at valuations that are mind blowing. He has a 100B fund. Think about that 100B to invest anyway he wants with no restrictions. Exactly like 1999-2000.

Everyone is feeling rich and the rich just got a lot more richer. More billionaires everyday - why? - all because the Fed is a puppet to the banks and the markets. Foot on the pedal on money printing. They dare not touch the dial or the button - who knows what will happen if they cease or pull back on their asset purchase programs or take away the punch bowl. They are petrified and have no handle on the situation - they use outdated metrics to measure inflation so that can keep printing more money and to keep juicing the pump.. We are all at a big party and no one thinks it is going to end - end it will - when maybe next year - I think. But until then just keep drinking...and get drunk.

Margin debt is at all time highs and yet no one is worried - the last time that happened was at the market tops of 2000 and 2007.

Some articles to read:

http://www.zerohedge.com/news/2017-10-18/long-list-market-anomalies-what-look-if-indeed-major-bubble

http://www.zerohedge.com/news/2017-10-18/something-wicked-way-comes-mcdonalds-–-bear-bull-costume

http://www.zerohedge.com/news/2017-10-18/when-not-if

http://www.zerohedge.com/news/2017-10-17/bubble-nomics

It is a bubble when you no longer have to flip homes to make money - you just have to take a snap (photo) and send it to an investor and just make money (check SnapFlip). Boy times have changed but the story has not. It is the same - wash, rinse and repeat (just with different names). Every show on TV now is related to housing flips and everyone is in it. Amazing how things look the same once you have experienced it before - what is that called - oh - 'deja-vu'. The more they say it is different this time, the more convinced I am that we are in this huge bubble and something is about to break. When who knows, but it will happen. Just read the articles in the links above. 

Margin debt at new highs, consumer credit card debt at new highs, auto loans at new highs, student loans debt at new highs - we are all running on borrowed time - we are a mind boggling debt creation machine and what is that called - enslavement. The rich have gotten richer and they are creating debt to enslave others. Companies are mired in debt and China - don't even talk about the Chinese regime - they are lying about everything - just to keep up the charade - debt is ballooning in China and is at over 250% of GDP and everyone says - that's OK - they will manage - of course, I could manage a trillion dollars as long as I have dollar printing machine in my back yard. 

It is amazing to see what is happening and everyone is smiling and acting like - there is no problem - it is all glorious.. Sure it is.. IPOs left and right, mind numbing valuations for startups with no revenue and so many stupid companies being funded - it just rings bells of 1999-2000. I think there must be a 17 year cycle or something..Anyway keep your eyes wide open, and learn to take money off the table and take profits.

We have a very unique feature on our platform - we call it PortfolioSense - as a subscriber you can enter any number of portfolios and we will send you an email at the end of the day to show how your stocks are doing in terms of the technical signals related to the holding in your portfolio. You can then check out the chart to see if you need to make a buy or sell decision. Check it out - I use it all the time and here is the link - http://www.trucharts.com/TransactionDetails.aspx

Don't even get me started on the Drumpf..

Mr. Market, Yellen, Gold, Tech stocks and bubbles

Markets, Yellen, Fed, gold, Tech stocks and bubbles

Well another week and Monday markets were up and all the bulls were running around predicting that the markets were headed higher. Sure enough we had a down week last week and Grandma Yellen's move to tighten is still being partially ignored by the markets. TLT or bonds were moving higher with yields moving down. We like TLT and have been long since 120. Check the chart here:

www.trucharts.com/stockcharts.aspx?TICK=TLT

There was a heavy rotation into the biotech stocks this past week. The move in the biotech ETFs such as XBI, IBB and BIB were excellent and look like weekly breakouts. We expect these to move higher based on their weekly chart patterns. Check these charts below and we would expect a pullback before we would take any long positions.

Weekly charts:

We believe the rotation is coming out of tech stocks and moving into alternate investments that have been lagging. There is no question that we are in a bubble mode for all assets - the question is, when will this bubble burst. Over 90% of the tech stocks are trading at ridiculous PEs and valuations (that are above the 2000 stock bubble). 

Even with Fed tightening, central banks around the world are still in easing and loose monetary policy mode. 

Gold has been bouncing around this level between 1200 - 1330 for quite some time. Technicals are negative and we have to see a decisive break above the weekly moving averages of 13, 50 and 100 to turn bullish. We do not see that happening unless there is a monetary crisis a.k.a China Yuan or some other country currency crashing.

In the tech stocks we like, QCOM and WDC. These stocks relative to their peers are cheap and have good dividends and low PEs. We also like Alibaba - BABA, TWTR (if weekly close above $19.5) and would short NVDA. Please keep tight stops at 5% below 50d SMA or 20 week SMA. You can find these values on our site when you plot the charts on the www.trucharts.com/stockcharts.aspx page. 

We have added new features such as customizable multiple screener for various technical signals on our site under "Screener" menu option - check it out.  

We have video tours of our site on how to use the site effectively - please do check it out.

We have a discounted subscriber pricing which is at $10 per month or $120 annually. Please check this out on our subscriber page.

Good luck trading.

B. Bhatia
Founder/CEO - Trucharts.com

Fed meeting, gold, tech stocks and where we are headed

Fed Meeting - Fed stance, Gold and Where markets are headed

So the Fed meeting was over last week and they raised the rates by 0.25bp. In addition, indicated that they need to start winding down their balance sheet. Whoa!! Is Grandma Yellen and the Fed waking up to the scenario that they are the primary cause of the bubble - well surprise, surprise - they and all Central banks have co-ordinated this massive bubble and they have no idea how to truly unwind it. Stocks are trading at ridiculous valuations and at levels above the 2007 peak. The 1999-2000 peak was a real bubble of truly massive proportions - but we are now in an all out massive bubble in all assets except gold (maybe).

Tech stocks are valued at the highest EV/Sales ratio, high PE's and the insiders are cashing out. Does that sound familiar? Right now machines are trading and there we believe will be the catch 22 and the main risk. We can tell via our intraday charts when machines kick into the trades. Right now machines are running the show and there is very little human intervention. In addition, complacency is running at lows and we expect this to stay this way possibly through the summer.

We had predicted that the DOW stocks would hit new highs and many of the big names are hitting new highs. Our prediction of Dow 21500 was met this week and we do not see any reason for now that would not allow it to move higher.

We trade on technicals and these seem to be working very well - as we think the machines are programmed to work on technical signals. This is another reason to use our reports page to identify stocks that meet certain technical criteria.

So which stocks do we like - and how does one protect your portfolio.

Based on our analysis, we are seeing a move into the Dow component stocks and big names. We still like AAPL as it is cheap 0 but we would wait for a nice pullback before taking a position. We like BA, MDT, JNJ, CAT and DE. These are looking strong. 

We would take profits in tech stocks as we thinkthe tech cycle and bubble is over and although we may see signs of a rebound - we would sell into the rallies. There is definite rotation going on and tech is not the place to be at least for the summer or until the IPHONE 8 announcement happens. We are short NVDA and will stay short. We are long puts on NVDA also. 

We believe that the Fed is on a tightening and liquidity draining from the system and this will result in a profit taking in tech stocks as these are overvalued on all key parametrics - except for AAPL. In addition, please keep tight stops at around 8% to 10% or at 5% below 50d SMA depending on your buy price.

Check out our site - we offer AI based trading algorithms with clear buy/sell signals, end of day technical reports which work great to find good stocks to trade or buy.

We do not like gold as the Fed is in tightening mode and draining liquidity.

Good luck trading. 

Check out our site tour youtube video at -  

https://www.youtube.com/watch?v=dFC5iVaTkQY

Friday's Nasdaq Tech Bloodbath

Blog 6/10/2017 and 6/12/2017 

Trucharts.com

Was it a tech carnage or not?? Friday was a huge rollercoaster ride but we made out really well!Well, Friday started out like a good day in the markets with many of the FAANNG stocks hitting new highs and then reversing ending lower. AMZN moved around 100 points and we were very fortunate that we had closed our puts and were long the lower puts on many stocks and all of these made us some really good profits.We have been short NVDA and are staying short - we know this is a bubble stock trading at ridiculous valuations. Many of the stocks on the NASDAQ have been going up non stop in a straight line up with almost no end in sight - it looked and still looks like the bubble of 1999-2000 with a different feel. Everyone feels invincible and like a investment pro. It is all easy to think that one is a genius in investing when making money is so easy. It is days like Fridays when folks start getting margin calls that we see selling and then everyone tries ti buy the dip. We will have to wait and see if buying this dip makes sense. 

Now there was one key thing we had noticed on Thursday even when stocks were moving higher - MSFT was acting weak and that was a sign that something was changing. Everyone in the midea and online (CNBS - Cramer) has been harping on and on about NVDA - a chipmaker which momentarily reached a market cap of 100B - yes 100B and selling at price to sales ratio of around 12+ - no semiconductor company has ever traded at such a huge multiple or valuation. Also it is very common to see when stocks are high flying that analysts and idots on TV come out and try to justify the valuations of such stocks - vocalizing terms which they have no idea about like AI and VR etc. NVDA is a chip company - end oif story and their sales will never ever reach the lofty valuation it carries. NVDA is primarily a graphics chip company with lot of competition and this is a very hyped stock. We highly recommend taking profits, if long, and we are short and long NVDA puts.So what happened Friday tech stock bubble - we think there is a shakeout that took place. Technicals are still strong and until we actually see real technical breakdowns - we have to count it as a shakeout. In addition, it would be prudent to take some chips off the table and ring the bell on profits. Many of the stocks bounced up from their 20day and 50d SMAs. Very typical when machines are running the house. We can expect some bounce but we are also seeing rotation out of tech stocks, which we mentioned have been going up in straight line fashion, into energy and other sectors. 

Financials were strong but we still think this was a dead cat bounce. We like BAC and some financials, in energy we like beaten down names like SLB for short term plays. We also like some retail names - short term trades - GPS looks good. We would short SBUX, NVDA and LRCX. Although the real technical weakness or clear breakdown is not evident yet - have tight stops above at recent high. We suspect there will be some bounce back and maybe this was just a shakeout. We will have to wait and see confirmation - as there were no breakdowns below 50dSMA. NVDA was a classic textbook climax high reversal.

Financials were looking strong as these were oversold and oil bounced with gold closing lower. We need to watch for follow through on these next week. GPS chart looks good and we are watching BABA to see if it consolidates here for a breakout.Monday was a nice bounce back day. Many good formations on charts - need to watch closely - still short NVDA.Good luck trading and checkout our video on youtube and follow us on twitter (@trucharts). We will start posting more videos on youtube on how to use our site more effectively for trading decisions. Do subscribe - it is only $10 per month for full year subscription.

B. Bhatia
Founder - Trucharts.com