Insider Tips - Weekly Stock Market Report - Week April 15, 2024
Market is RED: Exercise caution. Respect a cash position. protect to the downside. Consider short selling but be sure you know what you are doing.
Market Overview and Technical Analysis:
Hey everyone, it's Mark Yegge here with this week's market update. We're starting off in what I would call a "red" market, signaling a need for caution. After seven months of positive trends, we're seeing signs of a downturn. The market is exhibiting increased volatility, with notable moving average crosses and shifting momentum.
Looking at specific indices, the NASDAQ and S&P 500 are off recent highs, while the Dow Jones Industrial Average is notably below its 50-day moving average. I attribute some of these challenges to recent Federal Reserve news and underlying inflationary pressures.
The implications of rising inflation on interest rates are significant, affecting asset classes like gold, silver, and oil. I advise paying close attention to the VIX (volatility index), which is at levels not seen in a long time, indicating heightened market uncertainty.
Volatility Analysis:
Sector-specific movements are crucial to monitor. We're seeing spikes in the oil and gold indices, reflecting investor interest in hard assets amidst inflation concerns. Conversely, treasury yields are declining, which is unfavorable for treasuries and banks.
I caution against expecting a bounce in the treasury market given current inflation rates.
Individual Stock Analysis:
Let's dive into some individual stocks:
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Apple: We've seen a recent bounce in Apple's stock volume following the M4 chip announcement. I anticipate a potential rebound, especially given its positioning above key moving averages.
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Tesla: Despite recent declines, I remain optimistic about Tesla's long-term prospects, particularly with advancements in autonomous driving technology.
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NVIDIA and AMD: NVIDIA is consolidating post-highs and could lead during a market rebound. Meanwhile, AMD faces selling pressure but may find support near its 50-day moving average.
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Super Micro Computer (SMCI): SMCI had a significant run-up followed by consolidation. Investors should be cautious of potential volatility in the AI support sector.
In conclusion, it's essential to practice prudent risk management strategies in this red market environment. Protect your profits and stay ready for market shifts. As always, stay tuned for further updates and insights.
Stocks to Short in a Declining Stock Market
Mark's Market Update: Playing the Red Market
I want to talk about how the market has turned red, which can mean big opportunities for those who know how to play it right. If you're feeling the shift, you're not alone—many investors are taking profits, and that kind of momentum can lead to significant downturns.
Let's dive into two stocks that I believe are ripe for shorting:
1. Roblox (RBLX): Roblox, the popular game platform, has been struggling with declining earnings and a hefty amount of debt. The stock is currently stuck in a year-long consolidation phase, showing a triple top pattern, which indicates strong resistance. With a weak relative strength of 29 (out of a possible 99), Roblox might struggle to break through resistance levels. If it drops below the 200-day moving average (around $37-38) with volume, the next support levels could be around $25-26. Keep an eye on this one, especially in a declining market.
2. UPS (United Parcel Service): As a major player in logistics, UPS has been in a downtrend for a couple of years due to negative earnings growth. The stock recently fell below the 50-day moving average and might target the $140 support level next. If it breaks below $138 with volume, it could see a significant drop towards $81-82. This decline reflects broader market sentiment—when transport stocks like UPS signal weakness, it's a sign that the market expects tough times ahead.
For more stock picks and detailed insights, including the remaining short list of 13 stocks, see the list below. Our newsletter not only provides stock lists and sector analysis but also offers weekly updates to keep you ahead of the curve.
Remember, shorting stocks carries risks, especially during volatile market conditions. Always set your stop losses to manage potential losses effectively. Watch the full video here.
TOP SHORT Candidates:
When markets turn Red, like we just did, you should be protecting your portfolio - all things being equal. Markets can move down twice as quickly as they moved up. But there are always opportunities. Here is a list of my favorite short candidates right now with RBLX and UPS being at the top of the list. As always, do your research. Be careful. Put your stops in.
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