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

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