Day trading at extremes and the fastest market bounce back

Day trading at extremes and the fastest market bounce back

Here we are - after being in the shortest bear market ever and the Fed unleashing the biggest money printing spree ever known in history, the markets responded and we recovered from the lows to climb back in the most ferocious fashion.. 

We bounced over 8K points in the DOW and crossed an all time high for the NASDAQ with everyone joining the bandwagon buying left and right - and the biggest short squeeze driving valuations and PE ratios one cannot even fathom..much less explain.. Analysts falling head our foot raising their price targets with no regard to the outcome or their actions... No justifications for their actions..Wow - sounds like the 1999-2000 bubble.. For companies to trade at 10x revenue is now considered to be cheap.... Then we have our wonderful day traders who proclaim they have found the holy grail to making billions and chastising greats like Buffet - you know who we are talking about.. 

These are crazy times with the Fed backing everything - we printed over $2T in a matter of 2 months and it took the US over 200 years to get to that number in debt... Think about it for a second.. We are going to kill the dollar and have severe inflation in the future - and the only safety is owning gold or precious metals. We stand steadfast in our belief that gold will rally to 3000 after the longest consolidation..

Tech stocks like AAPL, AMZN, GOOG, FB, MSFT - the FAANGS are trading at valuations in the TRILLIONS... These valuations rival GDP of several nations combined.... And yet not one analyst comes and says - hey we are in a bubble - those words are uttered by the smallest minority.. What we are seeing will leave the tulip bubble in the dust.. 

This is not over yet and we expect this to move much higher.. Our targets are still in place for DOW to get to 40000 by next year and 4000 for SP500.. Tech stocks will trade at numbers that will be dizzying... So keep buying - we are seeing breakouts even when the economy is not doing well from a consumer perspective... With so many unemployed and so many jobs lost, businesses shutting down - the Fed has basically backstopped the rich and are on the path to making them richer... This will drive housing prices higher and create another bubble in that sector... Long housing stocks.

Again - we recommend these stocks with caution knowing that the trend is still higher...

ZM         - chart here - https://trucharts.com/stockcharts.aspx?TICK=ZM    

PTON     - chart here - https://trucharts.com/stockcharts.aspx?TICK=PTON

BYND    - chart here - https://trucharts.com/stockcharts.aspx?TICK=BYND

NVDA     - chart here - https://trucharts.com/stockcharts.aspx?TICK=NVDA 

Be mindful of stops = only risk money you can afford to lose - day trading is still working well and is very profitable. Along with use of options - the returns are even better.. Use small leverage - no more than 2:1 but keep close stops and watch the charts. 

We are enhancing our site and provide real time quotes and will be adding trading soon.. Keep an eye out as you will have access to our site once you trade through our site zero commission trades, along with unlimited options trading for $30 per month.. Our buy/sell strategies are excellent and work well. But be mindful, these are technical signals only and are not driven by news etc..

Good luck trading.. We will post some new videos soon on how to use our screeners to find stocks.

Trucharts Founder

Bob

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)

The Fed, the markets and tech stocks - FAANG - NVDA and others

The Fed, the markets and tech stocks - FAANG - NVDA, FB and others

Well the Fed showed that it has balls and is not dictated by markets or politics - and this is what would be expected if they are truly independent and focused on maintaining their mandate of full employment and low inflation - the previous two Fed generals or chairman/chairwoman did a terrible injustice by not raising early enough and leading to a massive ALL asset bubble - not just in good old USA, but all over the world. We were not aware but Chairman Powell has been an investment banker and a hedge fund manager. We hope he saw that the bubble was brewing in the markets and that valuations were truly over extended to a level that matched the 2000 bubble. Along with this we have a massive debt issuance from corporates that are rated at grade "BBB" - when companies issued bonds at cheap rates and this number has ballooned to $4T (yes TRILLION) from 1.5T in 2008. Watch the FAANG stocks - these are broken..

We have provided here a link for a very good article from Mauldin economics (one of the better ones written) - 

www.mauldineconomics.com/frontlinethoughts/powell-the-third-mandate-the-new-fed-and-crawdads - Check it out - it has some really good data.

We are down a mere 6% and everyone is panicking - imagine that - a mere 6% and apparently a growing economy (bustling as they say) - where it cannot handle a Fed funds rate of a mere 2.5% - what is wrong with a 2.5% fed funds rate - that is just 50bp over the 2% mandated inflation rate. Really - how is that our wonderful economy cannot tolerate such a normal Fed funds rate.. All the idiots on CNBC and Bloomberg - are nothing but a bunch speculators who have never experienced a bubble.   As we mentioned in our previous blog post - not a single soul has mentioned the word bubble - or how truly overvalued the markets are still - even after this pullback. We also stated that bear market rallies are fierce and vicious - so watch for many more of these in 2019 - but the trend is still down and there will be a reversion to the mean - it is called the law of nature and physics. Drumpf panicking as is Mnuchin - such morons.. Do check our comments on our last blog on how tops are marked with 3 different events.

We would like you to refer to our previous posts on stocks and why these were overvalued - stocks like NVDA, ALGN, ADBE and NOW. Check the charts we had posted and we are still recommending to sell these if you are making money. NVDA and ALGN are both down over 50% - and do you recall the analyst who upgraded the stock at 290 along with the analyst who upgraded ALGN. Well these guys still have their jobs and the stocks are down over 60%. We picked ADBE as our next big short - as it has a market cap of over 100B - for a company that does only 10B in revenue - what is that - a P/S of 10x.. Again overvalued and over hyped stock. We keep track of our key indicators and our indicators are saying there is more downside and there will be rallies on perceived good news and from oversold conditions - but these will be rallies to sell into. Here is our updated short portfolio;

We are still recommending shorting HD and LOW - the retailers will have a tough time in 2019 and this is being reflected in their stock prices - shorting Macys (M) would be a good idea here.

Again we will are in process of revamping our site - expect to launch in January - new features along with direct trading from our platform. Can't wait..

We want to wish everyone a merry Christmas and Happy New Year and wishing everyone good luck in their trading and some sound advice - to stop listening to the bozos on TV - Cramer, CNBC and Bloomberg. Too much analysis and non stop gibberish. Do your own work and analysis - it does not take that long to make sensible decisions.

Trucharts.com Founder

Our top short picks and markets

Our top short picks and markets

What a roller coaster - down 700 point and then up 700 points, we have had one of the most volatile periods since any recent memory in the markets. But we said in our last article that bear market rallies are fierce and vicious - these happen to shake out the weak, but the trend does not change - it happens to suck in those who think markets are bouncing back and going higher - this picture has been played before many a time. Basically what happens after a long period in these type of bull markets, where every dip is bought and things go back up again. The mindset of the investors and many becomes complacent and it is like becoming habituated or trained and maybe even numb to any volatility. On top of that if you add all the sound on TV, news and articles - you seem to be lulled into the fact that it is all OK and you can just keep buying - it will always go higher. We mentioned in our last post - it is like being at a party and everybody is high and drunk - no one knows what the hangover will be like. We recommend you read this article and it echoes our sentiment on housing and credit bubble:

https://www.zerohedge.com/news/2018-12-08/everything-bubble-has-popped

We are witnessing people reducing prices in one of the most hyped up housing places in America - California - specially Bay Area where folks were tripping over each other to buy houses - overbidding with cash offers was a common staple.. Now we are seeing price reductions ranging from a very low percent all the way up to 40% reductions - UNHEARD OF IN Bay area - we are staying with our prediction of the coming 30% price correction in California and Bay Area.

We wanted to also show how tops in some stocks are made - this always happens when companies build monuments to their success - good examples of this in our present era are - guess - NVDA, AAPL, FB and CRM - this tells us the story in these stock is also over.. So sell these while you are making money.

If you recall we have been steadfast on our call on NVDA stock being one of the most over-hyped and over priced semiconductor stock in the history of the markets (as much as we missed the bull run in the stock) - we stayed with our call on shorting it all the way up. As we stated sometimes it requires a lot of patience - the stock was trading at the highest P/S multiple ever. Well the markets finally spoke and the stock has crashed over 50%. We think it is going to $80.. Another over-hyped stock in our short list was ALGN - what a joke - stock went from 80 to 400+ - we said short it - and as of Friday the stock has crash 50% - think about that 50% - it is now at 200. The stock was trading at a P/S multiple of 17-18 - so for every $1 in revenue - people were willing to $17 - what a fucking joke. We were long puts and made some good money.

Well we want to bring to you our next top short picks - if you make some money - at least give us some credit and subscribe to our site - here they are - LULU, HD, ADBE and NOW. ADBE is trading at a P/S of almost 14 - Market cap 114B and 8B in revenue (ridiculous); NOW trading at 17 P/S ratio - 2 B in revenue and market cap of 33.5B; HD is a call on the housing slow down - just short it - over priced - we expect their earnings are headed lower.. LULU another retail dump stock and over hyped. We have other plays but these are on the top of our list. We are still short and hold shorts on these stocks in our account except HD for now - we will swap TXN short for HD short.

We like gold as it has been holding up and cash as a holding - gold has been moving up and this is telling us that there is some event that may occur which will impact the markets - maybe Deutsche Bank (DB) - it is not clear. In addition this has been a market for traders and not investors and it will stay the same for the foreseeable future - there is money to be made for the last few weeks via via intraday trading. So stay on your toes and again - this is not an invest-able market - majority of our accounts are in cash and we published our short and short/long portfolio on our twitter handle - @trucharts.

We do not do FB - but do post on twitter our trades. One additional prediction - FB will not be a company in ten years.

We have an incredible deal coming in Jan on our site www.trucharts.com  - stay tuned..

Good luck trading.

Founder and Trucharts team

Our thoughts on the Tech Bubble and the everything bubble

The EVERYTHING Bubble:

It has been a long time since we published our last post. We have had a huge Trump rally since the election and the markets ramped in straight line. The FANG stocks have been the biggest contributors to the gain in the S&P along with the small cap indices hitting new highs.

Stocks like ALGN, NOW along with many others are trading at valuations that defy even the loftiest imaginations. ALGN is trading at a PS ratio of 18.8 (that is we are paying 18x times for every dollar in revenue - absolutely mind boggling numbers).  In addition, there is no shortage of companies being funded by VCs at valuations that put the 2000 bubble to shame. Just recently DoorDash received a funding of 535M - that is over HALF A BILLION DOLLARS for a company that delivers food from restaurants.

Think about it - $535 M!! These mind boggling numbers are all a result of the non stop money printing from the Central Banks - the Fed, BOJ, ECB and the PBOC along with many other central banks. This is reminiscent of the 2000 bubble but above and beyond that. Real Estate is in another bubble - and everyone thinks that this will never stop or prices will never move lower. We all know that is not possible - there are limits to everything - simple motto - nothing goes up forever and nothing goes down forever.

Many of the DOW stocks are in downtrends - check stocks like CAT, DE - http://www.trucharts.com/stockcharts.aspx?tick=CAT
http://www.trucharts.com/stockcharts.aspx?tick=DE

The DOW is being held up by stocks like AAPL, UNH, BA and MSFT. Jeff Bezos has now become the richest person on earth - in a span of 2 years is net worth has moved over 100B - Bill Gates is not even close - think about it - one guy's net worth has crossed over 150B!!! Just in a span of less than 4 years. And yet the TV bobble heads are mesmerized by all of this - not a single talking head wants to say it is a bubble - SNB (Swiss National Bank - yes a bank) along with BOJ are buying stocks - when did banks start buying stocks - unheard of - yet folks it is happening.. Just take a look at some of the exponential charts we had exhibited in our last article and many of these stocks have been moving sideways but still at lofty levels. NVDA still trading at 13 times sales.. No revenue growth in many companies - yet the stocks keep trading at these lofty levels - that is called a BUBBLE.

We have central banks that are enamored by bubbles and bubble behavior - it is like being drunk and high - that feeling lasts only so long. Then we will get to the hangover. Stock buybacks are shrinking the pool of shares available and thereby help companies do financial engineering to goose up their EPS. But this is now a trading market and no longer a investing market - we strongly suggest keeping tight stops at the 100d SMA or 10% below the 50d SMA. Try to take some profits and have at least 30% in cash ready to invest. This has been a crazy market and it is now time to take some money off the table and wait for everything to unfold. We still like gold as a hedge - it has been moving in a tight range between 1200 and 1350 - we would nibble into gold and invest 15%-20% of investable assets.

SP500 has been moving sideways in a consolidation pattern and we have to wait and see what happens in terms of a breakout or breakdown. But is very tradeable - specially ETFs like SPY and SSO, along with the QQQ'. Rates will be going higher, so bonds should be moving down. Sell NFLX and look to short the semiconductors ETF SMH. The FANG stocks - are racing to the TRILLION dollar market cap - just think the FANG stocks are worth over $4.1T!!!

We will all be witnessing history here.. Keep your eyes and ears open.. but always learn when it is time to say - yes I have made a very good return and now it is time to take it to the bank..

Check out our site - our screener is excellent and also do subscribe - checkout our pages - we offer features above and beyond other sites:
http://www.trucharts.com/stockcharts.aspx
Subscribe
Dynamic Screener

Good luck trading..

Founder/CEO (trucharts.com) - Co-Founder (Jetstox.com)

Kink in the market's armor - Is the pullback coming from these lofty levels??

Kink in the market's armor - Is the pullback coming from these lofty levels??

Are we starting to see a kink the market's armor. Was the 1 year anniversary of the election a mark of a short term or a long term top? What should we expect going into the end of the year and heading into 2018?

Exponential moves in many stocks as been very characteristic of this move in the markets. There has been narrow leadership and everyone, just like in the year 1999-2000, has been loading up in tech stocks and tech stock funds. It seems like we never learn from previous bubble manias and even though we are truly in a bubble with stocks trading at valuations not seen since 2000 and even the market multiples for many metrics above and beyond 1929, 2000 and 2007, none of the analysts (who by the way are in no way responsible for their recommendations) are NOT telling their clients to take profits and wait for better prices. Short covering has also extended many of the popular stocks and obviously the FAANG stocks along with some others in the market - keep flying high. Financial engineering, stock buybacks and earnings manipulations have become a way of keeping prices elevated. The level of complacency is unbelievably striking - there is no respect for risk. 

Every person you speak to thinks that there will never be a financial crisis or a major pullback in the markets. Personally, I believe in simple math and that there is always a reversion to the mean and trust me the mean is way below where the markets are. Typically 50d, 100d and 200d SMA are very critical in determining where the markets should find as support levels. Bubbles in real estate (many house flipping shows on TV - similar to 2007),  bond bubble (scares the shit out of me) and along with the stock bubble is mind numbing. The funding of startups day in, day out, is also a stark reminder of the days of 1999-2000. Startups that will vaporize and end in total losses will be the norm soon. 

Everyone thinks they are an investing genius and there is no way they will lose - that is when you have to take a contrarian view of the markets. Folks willing to fund companies like SLACK (nothing unique), WeWork, and many others at valuations that make your head spin has become norm and every next investor is trying to better up the next one by showing who is boss. This is NOT normal. 

The Fed and central banks around the world will be responsible for the next pullback and it will not be pretty. Market capitalizations of many companies are at mind boggling levels and unheard of. Some market capitalizations dwarf GDPs of certain countries and yet everyone thinks we are going higher. We think it is a serious time to start looking into taking profits and buying some protection in certain high flying stocks and sectors (semiconductor being at the top of the list).  

We suggest looking at puts for Jan 2019 for stocks like ALGN, ISRG and some other high flying stocks like RACE, NVDA and many others. Keep an eye on HYG and JNK - these are he ETFs related to the high yielding and junk bonds - these are pulling back and have a very good correlation coefficient to the market indices. 

Consumer debt is at all time highs - credit card debt is now at over $1T - yes that is a T.... Car loans, housing debt and HELOCS, student loans are at all time highs. We are a world in debt and it is all going to end badly.

Debt/GDP ratios for China is at a staggering 280% and going higher - and other nations debt/gdp ratios are also at staggering highs - all this debt has been created in one decade. The central banks have managed to print so much money that it dwarfs everything we have printed in over  100 years - they have managed to do it in 10 years - that tells you why we are in a bubble. Japan markets are being driven higher because the government is buying stocks - can you believe that - government buying stocks!!! it is the quintessential final nail in the coffin or basically giving up on the basic equations of economics - normal market cycles and following simple rules of the law of numbers and laws of supply/demand and demographics.

Charts for: DIA, LRCX, ALGN and NVDA below: EXPONENTIAL MOVES NEVER END NICELY. We recommend taking profits aggressively.

 

 

Here some article links for your reading:

http://www.zerohedge.com/news/2017-11-06/broadest-episode-extreme-equity-market-overvaluation-history

http://www.zerohedge.com/news/2017-11-06/tech-stocks-accounted-75-markets-october-return

https://www.washingtonpost.com/business/us-consumer-debt-is-at-a-record-high-havent-we-learned/2017/08/11/5c7bee6e-7e13-11e7-a669-b400c5c7e1cc_story.html?tid=ss_tw&utm_term=.ddfcf5fbcbed

Yearly subscription is only $180 and you can also get access to our automated trading algorithms and if you enter your portfolio - you will get portfolio emails at end of day indicating the technical picture of your stocks and whether these are buy, hold or sell. Only for paying subscribers.

http://trucharts.com/truCharts_Services.aspx

Good luck trading.

CEO/Founder - Trucharts.com