Trading Journal - Bullish Week for 4th of July

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As suspected the start of the week was in favor of the bulls as the spy basically had back to back days of over 1% gains. It is beyond comprehensions that one weekend makes. As a reminder last week on Friday a lot of tech stocks got destroyed to the down side and the indexes were hitting lows that basically made the month of June flat. Yet today's close has made end of June a decent month of gains as nearly 3% for the month.

Yet the reality of the real economy is heading in the opposite direction of stocks. With what has accumulated over the last 3 months in job loses is shown in front blog post chart. The job losses have been so bad it is almost 4 times as bad as 2009 and yet to see initial unemployment claims reduced to under 1 million since March. This Thursday will be interesting to watch on claims and due to shorten week it will likely be the last data point effecting the markets for the week.

What to do final two days of trading for the week

As I mentioned markets moving up is where I will sit on the side lines and indeed I missed out on some great opportunities. The FANGs like FB started out on Monday in the red only to recover and rise almost +5% in the past two days to $227. This is on the back of multiple companies and corporations pulling out of FB in purchasing ads on its platform. The bread and butter of FB is the ads so reality is FB will have to resolve the ads losses soon or else face lower evaluations. I am somewhat bearish on FB as outlook is bleak but the past two days of gains is clearly making it difficult to short. Same with the rest of FANGs as AMZN is again flirting with all time highs.

Today Fedex posted earnings and it should not be surprise that they beat top and bottom due mostly to consumer demand for its use under the lock down. This quarter confirms that shipping carriers like Fedex and UPS will likely be profiting even under lock down. An obvious opportunity missed on purchasing stocks prior to earnings. These are those examples in trading to be not only focus on technical charts but also fundamentals. Lesson learn is to always find what will be profitable under any negative back drop in the real economy. Another example was the March market bottom was lead my a lot of tech stocks having hit very low evaluations. The opportunity to invest in them were there because even when the country and globe were on lock down many of the companies were still operating near full capacity. FANGs companies, twitter, zoom, work- slack, and so on were benefiting from the lock down as they were still running while other companies would or could not. Overstock is a very good example as it became a 10 bagger this week.
OSTK got signed up to build the government's e-commerce site which clearly will mean they have become a vital part of the US government. Yet three months ago their stock price was on the verge of hitting historic lows.

I will maintain my stance and sit out the remainder of the week as I want to avoid carrying any kind of risk over the holiday. Yet definitely glad I did not go short even though as of last week technical charts were bearish.

Posted Using LeoFinance



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