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Don't fear the capitulationINVESTMENT CONTEXT Fed Chair Jerome Powell confirmed the key priority of the Fed is bringing down inflation, even while acknowledging that monetary policy can't address critical components like food and energy. Powell also a stated a recession is “certainly possible,” but not in the near term as the U.S. economy remains “in good shape.” Turkey's central bank is expected to hold its benchmark rate steady at 14% on June 23, after it kept interest rates deeply below zero when adjusted for inflation. Norway's Norges Bank is instead set to hike its key rate 25bps to 0.75% Russia is facing three interest payment transfers totaling almost USD 400mln on June 23-24, but more pressing is a Sunday-night deadline on previous missed payments from late May. If the country fails to make those payment - ca. USD 100mln of bond coupons - it will effectively be declared in default Global bank Citi said the probability of a recession is now approaching 50%. The Bank expects 3% growth for the world economy this year and 2.8% in 2023 U.S. President Joe Biden called for a gasoline tax holiday, in an effort to relief households from pump gasoline prices, which briefly surpassed USD 5/gallon BTC trades have entered a dangerous (4) channel with trading range set between 19-21k as volumes fail to return to the blockchain space PROFZERO'S TAKE Value investing has been the key theme across Q1 and most part of Q2 this year, as investors unloaded Growth assets whose bulk of profits are located deep into the future, hence more exposed to higher interest/discount rates. That trend is set to reverse should a recession materialize. In particular, the undisputed champions of the past 150 days, namely Oil & Gas stocks, may steeply retrace as energy demand is threatened by slowing pace of industrial expansion, particularly in China. ProfZero warned back in April that the fat dividends paid this year may dwindle in 2023 as a protracted bear market triggers a recession; consistent with that, ProfZero maintains faith in Value-like Growth stocks, which enjoy state-of the-art balance sheets; top cash generation; and most importantly excel at intangible assets and services - natural price deflators for the economy ProfZero concurs with ProfThree thinking one step ahead - demand for industrial commodities is by definition pre-cyclical, and any slowdown in the near-term should be taken as an early sign of a cooling global economy. Seeing Brent crude tumbling more than 2% just on recession concerns confirms in ProfZero a sense of unease while looking forward on Energy equities; thinking even further though, the feeling of concern permeates the post-recession recovery, whose seeds do not look planted as of yet PROFTHREE'S TAKE One of the commodities to watch this week is iron ore, which has seen a slump to USD 110/ton on June 20 after topping USD 150/ton just two weeks ago. Profs’ eyes are obviously on China (ca. 60% of global steel output), where demand seems to be under threat following the news that steel mills are cutting production in response to weakening real estate sector. ProfThree contends iron ore quotes are finally close to their fundamentally justified levels after a long period of speculation-driven pricing. Yet, a further dramatic correction could still happen since the second half of this year is expected to bring an increase in steel output from China, compensating for the 10% y-o-y output reduction in Q1 due to the Olympics-related emission restrictions. ProfThree also sees infrastructure spending and targeted fiscal as well as monetary stimulus also to prove supportive to supply, thus boosting prices
by ProfZero
Running up that hill - but then?INVESTMENT CONTEXT Analysts sharply raised the probability of a recession, while the Fed announced its support to yet another 75bps rate hike in July A worldwide measure of people’s inflation expectations over the next year was more than 4% in May, up from 2.3% a year ago Russia cut 60% of natural gas supply to Europe via Nord Stream 1 pipeline; cuts are now estimated to have reached 50% to Austria and Germany and 45% to Italy Germany announced it would take emergency measures, including restarting coal-fired power plants, to cushion the impact of lower gas supplies from Russia Turkey offered its support to extending safe grain export corridors from Ukrainian ports A delegation from the IMF arrived in Colombo, Sri Lanka's capital, to discuss a rescue package after the country declared default on its international debt Three Arrows Capital failed to meet demands to provide extra collateral to meet margin calls on digital currency positions PROFZERO'S TAKE Carefully monitoring equities after last week's collapse - not even energy stocks, the clear overperformers of the first 150 days of the year, were spared by the rush to sell. Balancing now Value with Growth may become the major challenge for investors as we head into recession - where the winners of the next decade are dictated Ireland's Finance Minster Paschal Donohoe expressed positive views on the Eurozone, asserting that the balance sheets of the continent's States are in much better shapes then 10 years back, when the contagion of Greece's debt crisis was feared to spill over to Italy and Spain, triggering a spiraling domino effect of defaults. ProfZero unfortunately does not share Mr. Donohoe's optimism. Countries like Italy deeply enjoyed the not-so-implicit backing of the ECB when it came to rolling over government debt in the open market after the investor confidence meltdown in November 2011 - yet no tangible reforms revived the nation's growth and productivity statistics, while public spending rather than targeting infrastructural changes was aimed at winning political approval in the form of heftier unemployment cheques. Taken together, Italy's debt-to-GDP ratio in fact ballooned from 126.5% in 2012 to 150.8% in 2021; inflation may definitely play a role smoothing the nominal debt load, but interest rates are already guiding fixed income traders to bet against the country's solvency, to the point that the ECB had to backtrack on its announcement regarding the end of the EUR 20bn monthly bond-buying program. ProfZero recently reiterated that from an inflation crisis this could easily spiral into a credit downfall; China already had its Evergrande moment. Let's hope the world will suffer a little more piccolo ProfZero often gets asked "Is it the right time to buy?" - The right question would rather be: "Why and what am I buying?" Until we flip our mindset to that, we'll be just chasing trends, ending up being eaten by the sharks PROFONE'S TAKE Following the considerations about the energy of future, ProfOne’s eyes are set on green hydrogen, a promising alternative fuel facing ever-growing demand. Hydrogen has been demonstrated to enjoy potential to replace natural gas in power-hungry industries like cement, steel, ceramics and fertilizers. In the context of de-carbonisation and energy security, exacerbated by the war in Ukraine, governments and energy companies upped their investments in green hydrogen: BP (BP) has taken a 40.5% stake in a USD 30bn green hydrogen production project in Australia, while Spain is bidding to become the first green hydrogen hub in Europe. Amidst growing enthusiasm, ProfOne is curious how producers will deal with the challenges of storage and transportation, other than the extremely high production costs. Today's green hydrogen is based on clean electricity from renewable energy; as such, it is ca. 5x more expensive than grey hydrogen (actually the most common, coming from natural gas without emissions recapture). The energy equation has 3 variables: security, reliability and affordability. To date, all known sources can satisfy but 2 at a time - green hydrogen included
CME:BTC1!
by ProfZero
Trade setup for VTVVTV tracks the CRSP US Large Cap Value Index. The index selects stocks from the top 85% of market capitalization based on multiple value factors. - Seeks to track the performance of the CRSP US Large Cap Value Index, which measures the investment return of large-capitalization value stocks. - Provides a convenient way to match the performance of many of the nation’s largest value stocks. - Follows a passively managed, full-replication approach. Read more about this index here
AMEX:VTV
by UnknownUnicorn38289576
DJI down 17% to 30636 VWAP fr Covid low; will 20% @29570 be nextDJI retraced already 17% from 36952 ATH to a low of 30636, now at 32120. This completed a 1:1 abc corrective wave. 30636 is also the black VWAP from pandemic low. This may be the bottom if 30636 holds. If it does not hold, DJI may retrace 20 % (bear market boundary) to 29570 pivot which is also the pre-pandemic top. This will be near the 0.382 FIB retracement level from pandemic low of 18213 to ATH of 36952. This will also be a retracement back to the base of my slanted FIB CHANNEL. If yields continue to rise, value stocks will outperform growth & tech stocks. Not trading advice
DJ:DJILong
by xtremerider8
BARCLAYS - Clear As Day - Buy @163p REASONS TO BE BULLISH Technical - Recently broke out of a 15 year pennant pattern and just retested for support. Technical - Recently crossed and reclaimed the 50 MA. Technical - MA 50 looking like it may cross the 100 and 200 in future months. Technical - RSI is in the bull zone (bouncing off its base). Technical - A 155p entry was triggered when reclaimed MA and RSI bull-zone on the same candle. We're now at almost the same level. Technical - All-time high was back in 2007. This stock hasn't been touched in 15 years and is now winding-up to revisit the top of the upwards slanting trend-line. Technical - Looks like wave 1 of a 5-wave move is complete/near completion. Fundamentals - Price to earnings is just 4.7. Barclays is looking like incredible value right now. Net earnings up 275% for the year. Fundamentals - Dividend yield is ~4% - not to be sniffed at all in this environment - they may even increase this given how profitable banking with current accounts may turn out to be if the BOE base rate continues to increase. Fundamentals - Implied volatility in the options market is increasing, and it seems like some big players may be eyeing-up Barclays for a big position (likely long but perhaps short). Fundamentals - Less exposed to the U.K. than some of its counterparts (like Lloyds). With U.S. and India appearing in their Top 4 countries in terms of investment. Target 1 - First target would be reaching the underside of the purple channel once more at 260p or £2.60. A 60% move off todays prices. Target 2 - Next profit target would be 750p or £7.50 (a 4.6x move). That could be attainable fairly quickly in the next decade on current trajectory. I don't normally like to post timescales but I am curious to see how this one plays out. Target 3 - The white top line coincides with the 2.272 and 2.414 fib extension (from Mar20 to Mar22). This generates an ultimate price target of between £10.50 (1050p) and £17.30 (1730p). This matches with the extension from the height of the pennant (top to bottom) also. REASONS TO BE BEARISH Technical - Below the purple bear channel and not showing signs yet of being an 'exponential' candidate. Technical - Stop loss will be 140p at the prior low - representing a 12.5% risk. Technical - Only recently broke out of the pennant pattern. Could still reverse from here. Fundamentals - Inflation is not usually too good for growth and banks, with costs increasing as well as profits from interest rates. Fundamentals - With interest rates increasing you'd anticipate that defaults and leverage will unwind in other economies and wreak havoc. Perhaps Barclays have repaired their balance sheet in the last 15 years or perhaps the UK government will continue to backstop, but current market conditions don't make for pretty reading. SUMMARY Buying Barclays here seems like a no-brainer here. Significant dividends in a stagflationary environment cannot be ignored. Neither can we ignore a reasonably priced stock in 2022, as well as a successful backtest of multiple breakouts on our indicators/TA. Time to keep an eye on this one.
LSE:BARCLong
by DigiDavid
IMPERIAL by name & nature - BUYREASONS TO BE BULLISH Price just reclaimed the 50 MA and is hovering right at the 100 also (£1,817). RSI on the 2 week chart recently turned bullish, coinciding with reclaiming the 50 MA. Trend line + MA cross = Bullish Entry. These are my favourite trades when the two signals cross the threshold on the same candle. Double confirmation. Further upside will see both cross above the 200 MA (the top of the purple channel at £2,575), which will further cement its place in a bull market. Imperial Brands are currently paying out a 7.8% dividend yield. Fundamentally, investors wire going tol flock to dividend paying stocks en masse. They have a price to earnings ratio of 7.27 which is very low by market standards. UK FTSE is trading at The stress of a downturn in market, trade & geopolitical conditions is likely to increase people's dependency on the products they produce. UK stock market is not over-leveraged, particularly not in value stocks like IMB. Has already endured a 6 year bear-market. Initial profit target is at £4.2k-£4.7k (the mid-point), which also coincides with it's prior all-time high. Here it will likely take a breather and form a cup and handle for a year or two (like April 2012 to April 2014). Has the potential to approach the top of the channel at £7k to £14k in the decade ahead. REASONS TO BE BEARISH Across many other assets, I am seeing potential capitulation in stocks going into June/July this year. It could retrace 10-20% along with more risky assets, but I suspect it will hold it's own for years to come. Stop would be at £338 - which would represent a 33% loss. That would put-in a new lower low and likely lead to more downside and a negated bull-run. SUMMARY In times of market conditions and the stagflation that we find ourselves subjected to, IMB is a solid buy and a great risk-reward entry here. Despite it's low expected volatility, it will likely provide a decent dividend and return on investment. IMB has a chance of keeping-up and in fact exceeding inflation. That is not to be sniffed-at, with the meme stocks facing their day of reckoning. We'll keep an eye on this one, as this indicator has provided 2 entries at £1,671 and £1,770 recently. Enjoy and thanks for reading!
LSE:IMBLong
by DigiDavid
1
Farewell to Growth? Not so soon! ☝🏻INVESTMENT CONTEXT The evacuation of Ukrainian troops from the Azovstal plant in port-city Mariupol suggests that Russia may be taking the final steps to seize control of the area McDonald's (MCD) and Renault (RNO) announced the full exit from Russia. MCD will sell its operations in the country for USD 1.2-1.4bn write-down, whilst RNO assets in Russia were nationalized Negotiations are stalling to persuade Turkey not to veto the entry of Sweden and Finland to NATO. Turkey resents both for refusing to extradite Kurdish dissidents Shanghai's lockdown measures may ease, as the city has reported no new COVID cases for the third consecutive day Sri Lanka’s new prime minister, Ranil Wickremesinghe, said the country has reached its last day of fuel supply, as default on international debt looms Berkshire Hathaway (BRK) scooped USD 3bn Citigroup (CITI) stock PROFZERO'S TAKE Analysts are seeing a remarkably dovish tone in the words of President Vladimir Putin, who said the proposed NATO enlargement posed “no direct threat for Russia”, and that he had “no problems” with either Finland or Sweden joining. ProfZero's eyes are now looking above, chasing further reconciliation signs from the other half of the heavens After ploughing more than USD 51.1bn in U.S. stocks in Q1 2022, particularly in energy (Occidental Petroleum, OXY) and Value-style technology (IBM, Activision Blizzard, ATVI) Berkshire Hathaway (BRK) binge on Value continued with a USD 3bn bet on Citigroup (CITI). All this, while Saudi Aramco overtakes Apple as the world's most valuable company, feasting on +82% net income on Q1 2022 vs. one year before. ProfZero sees the capital flow as possibly marking the end of an era for at least the frothier fringes of the Growth segment. Still, it's challenging to imagine the post-pandemic, post-war world without innovation in the driving seat on all fronts - energy (smart grids), finance (digital currencies, decentralized exchanges), healthcare (applications of genome mapping), transportation (smart cities, sustainable movement). As hard as it is to call for an opportunity now - is it really by chance that inflows to Cathie Wood flagship ARK fund are up USD 1.5bn since the beginning of the year, right while it was snapping 860,000 more Coinbase shares (COIN)? After TerraUSD project collapse, nervousness remains high in the stablecoin space. Ever since Tether briefly lost its peg to USD on May 12, over USD 7bn positions were pulled from USDT, sending the market capitalization of the project down by 9%. ProfZero remains convinced of the importance of stablecoins as mediums to bridge and create confidence between the legacy transactional world and fully embracing cryptocurrencies as means to exchange value - one of the rare wedges where Regulators could meaningfully step in and act concretely to establish investors' trust BTC is trading range-bound around USD 30k gravity. Albeit it successfully shrug off the risk of further meltdown below USD 25k in the wake of LUNA collapse, it is not supported by sufficient buy-side pressure to call the bottom. ProfZero still believes the eventual point (C) of a bear Elliott wave sits just below USD 30k, which could function as platform for a ramp to reclaiming USD 40k in the near term, before a final capitulation in the low USD 20ks. To ProfZero discouraged readers - BTC has seen multiple 80% peak-to-trough plunges, the last one no later than in Q1 2020. Another disruption of that magnitude would locate the next min at ca. USD 13k. Would that undermine the wealth of blockchain as the technology for the next era? Iron Maiden used to sing "Fear of the Dark"; not "Fear of the Future"
CME:BTC1!
by ProfZero
2
YM Dow futures to retest previous low; 17% & 20% correction riskIt seems even more likely that YM Dow futures may retest the most recent 12% correction low with major moving averages failing to give support. Bearish scenario: However, if this negative 12% level does not hold, the risks are increasing that it may target the next 17% correction level. (This is more likely that the worst scenario of a 20% correction bringing it to the brink of a potential bear market.) Bullish scenario: If the 12% correction holds, we may see a return to Value stocks as growth stocks remains pressured in an increasing rates environment. Not trading advice
CBOT_MINI:YM1!
by xtremerider8
Range of Apple Fair Value Estimates Based on analysing the company financial, qualitatively and prospectively, the fair value of Apple's stock seems to be in between 120 and 130 dollars while the lowest most conservative realistic value stand around 96 while with best assumption of future growth, and based on the true sustainability of said growth, the highest value seems to be around 178 dollars a share. This is using a desired rate of return of 10% based on the current high inflationary environment and including around a 2-5 extra percentage point for margin of error allowances, even though Apple seems to be one of if not the most solid business out there financially, management - wise and considering the way it has become entrenched in everyone's lives through its clever ever-developing ecosystem of products and now services too, with more to come. Fair value 120-130$ Lowest estimate - 96$ Highest estimate - 178$ ___________________________
NASDAQ:AAPL
by Vlad_A03
1
MP Materials Strong as Expected$MP made a new ATH just recently as I was/am expecting this stock to go far, however, the wave count and the indicators show that the price acceleration has taken the stock to the overvalued zone. The price can still go up if momentum traders pick up the stock and push it more towards the sky, however for long term investors the valuation is becoming rich for what it is today and I think it is time to trim a bit to lock in some profit or start to sell covered calls
NYSE:MPLong
by IboProtrader
Investment idea - forestry and lumber. - Interfor Corp - CanadaInterfor Corporation IFP - Canada (IFP) Interfor Corporation is a Canada-based forest products company. The Company and its subsidiaries produce wood products in British Columbia, the United States Northwest and the United States South for sale to markets around the world. At the time of writing this on, 19/3/2022, the share price at $42 is just a whisker below the all-time-high of $44 reached in mid January. Interfor Corporation is the 7th largest producer of sawmill timber in the world. Interfor Corporation operates about 15 sawmills in Canada, Oregon, Washington, South Carolina, Arkansas and Georgia. Most of the land on which the company harvests timber is owned by British Columbia. Interfor makes lumber for the construction market, logs for industrial processing, and wood chips for pulp production. The company says it is “The only pure-play lumber producer of scale” Why am I buying Interfor? With a prospective p/e ratio of below 4, a possible dividend yield of over 5%, (see dividend comments below), high historical sales and earnings growth, and sharply rising analysts' forecasts, the fundamentals make Interfor look like the most attractive in the forestry and lumber producer sector. I like the inflation play. It has very strong positive cash flow. Net income, (before non-cash items and acquisitions), is equivalent to one-third of its market cap. Catalyst for more growth The timber production market is highly fragmented. This has historically worked to Interfor’s advantage. Multiple acquisitions have have helped Interfor to grow. Potential takeover offer Interfor’s annual accounts and cash flow statement show that in 2021 they had net earnings of CAD819 million before items not involving cash, and before investing activities. That’s a third of its CAD 2.4 billion market cap. A takeover of the company could be easily financed out of its own cash-flow, with plenty left for the acquirer. Given their modest size of USD 1.92 billion, they could easily become the target of a larger rival or a value investor. I think Interfor would be an interesting acquisition for a seasoned Canadian investor, such as the 91-year-old Jim Pattison of Jim Pattison Group. He owns 51% of rival Canfor Corp. The largest investor in Interfor is Letko, Brosseau & Associates Inc. They own 10.8% of Interfor Corp. They are a Canadian institutional investment manger, with an interests in "Growth Through Value Investing" and in "Sustainable investing". They often exercise their shareholder votes, particularly when there are takeover offers, typically refusing what they see as low-ball offers. If Jim Pittard wanted to acquire Interfor he would need to get Letko Brosseau onside first before making any offer. Lumber Prices High Lumber prices boost Interfor’s profit. You are no doubt aware that Lumber prices have been strong over the last 2 years. Year end Price Random Length Lumber futures on CME front month. 2014 $319 2015 $247 2016 $328 2017 $459 2018 $343 2019 $416 2020 $716 2021 $1227 18/3/22 $1200 The average selling price of Lumber in Q1 2020 was $842. In Q1 2021 it was $1143. So far in Q1 2022 it looks like it is going to be about $960. See the 50 year and 3 year charts below. Various reasons are being given for the high Lumber prices. These include flooding in British Columbia. It knocked out road and rail links in December. Mudslides disrupted Vancouver shipments. Beetle infestations, wildfires, and government restraints on tree harvesting limited availability of mature trees. Sawmills were said to be struggling to keep up with demand in part due to a shortage of workers. At the same time the supply chain was being disrupted by the pandemic effect on the transportation network. There simply were not enough vehicles or trucks to get lumber to market, so backlogs were building up at sawmills. The net effect was that supply to the market fell. At the same time, the Pandemic created unprecedented demand for home improvements. Home improvements more than compensated for any fall in homebuilding due to the pandemic. It was a perfect storm. Supply fell and demand rose. Since some of these one-off effects are now dissipating we could see lumber prices going lower as supply returns to normal. On the other hand any extra supply might be absorbed by new home construction. Home-buiding is said to have been constrained during the pandemic. Going forwards, lumber prices are likely to be heavily influenced by housing starts. With property prices up around 15% over the last year, it looks like demand is currently strong. Freddie Mac sees house price inflation gradually dropping to 2.5% by 2023, but obviously that still means higher prices than at present, and ongoing demand for new constructions. According to many articles housing inventories vs demand are at record lows for decades, and it’s likely to take years before the supply and demand balance out. Dividend: In May 2021 Interfor declared a "one-time special cash dividend" of $2. At the time they wrote: "“This special dividend reflects a partial distribution of the extraordinary cash flows being generated from record lumber markets” said Ian Fillinger, President and Chief Executive Officer. “We are able to reward our shareholders with this return of capital, while retaining ample financial flexibility to complete our multi-year strategic capital plans, grow significantly through acquisitions and continue to buy back Interfor shares.” Will this “one-time” special dividend be repeated this year? I am concluding that it is possible for several reasons: Firstly the company has more liquid cash on hand at the end of 2021 than it had at the end of 2020. In fact it has more than four times the cash needed to pay the same dividend. Secondly, the price of lumber remains strong, well above the average during 2021. Thirdly, the company recently expressed strong confidence about the lumber price driven by strong demand from new housing starts, and stated that it is well positioned with a strong balance sheet and “significant available liquidity”. Fourthly the company share capital has reduced by about 10% due to share buy-backs in 2020. This means that the same special dividend would cost less than last year. If the company pays a $2 special dividend - as per 2021, the yield will be 5%. The decision on dividend should be made in May. Share buy backs In 2021 Interfor purchased nearly 10% of its share capital. It was 100% of the amount allowed. The authorisation has been renewed again for 2022, again allowing for the purchase of nearly 10% of the share capital. Sales Growth Interfor’s historical lumber sales growth is reported as being 16.41%. In 2021 it was +50% helped by the acquisition. Analysts are forecasting that Interfor’s sales will increase by 17.3% in 2022. Acquisition The company made a major acquisition late last year (Eacom Timber Corp). As a result of this and high lumber prices, analysts have been raising their EPS forecasts for 2022. Currently analysts are forecasting EPS of close to CAD 11 per share. in 202 Interfor reported EPS was $12.80. The share price is currently close to $42 so the prospective p/e ratio is low (around 4x). If the company pays a $2 special dividend - as per 2021, the yield will be 5%. The decision on dividend should be made in May. Interfor’s historical lumber sales growth is reported as being 16.41%. In 2021 it was 50% helped by the acquisition. Analysts are forecasting that Interfor’s sales will increase by 17.3% in 2022. Earnings The future earnings of the company will, to some extent, depend on Lumber prices. The higher the better. The demand for Lumber will be heavily influenced by new home constructions. Interfor is thus an inflation play, especially if house prices keep rising. Analysts are increasing their earnings forecasts. Click below to see the latest lumber price progression CME:LBS2!
TSX:IFP
by Clive_Thompson
Growth vs. Value: Skating to Where the Puck Will BeHockey legend Wayne Gretsky famously said: "Skate to where the puck is going to be, not where it has been." This sometimes applies in investing and trading. Towards what object have investors been skating, figuratively speaking? Currently, financial media, fund managers, and commentators have been emphasizing the opportunities in value over growth for several months. And for good reason: Energy, a value / cyclical sector unloved for about a decade, has outperformed every other sector this year by a huge margin. It has risen by approximately 20.5% since January 1, 2022. Even it's uptrend channel could not contain it (although it looks to be consolidating at the moment or perhaps mean-reverting). Increasingly, market participants have been "skating" towards value areas and away from growth for over a year now, as anyone who has been burned by long trades in tech / disruptive innovation knows. For example, a spread chart (also called a ratio chart) of ARKK/SPY shows just how dramatically growth has struggled. ARKK is a well-known US ETF containing high-beta stocks typically categorized as disruptive-innovation stocks, i.e., high growth names. This chart evidences just how much growth has struggled vs. the S&P 500. Notice, though, how this spread chart shows how close to major, long-term support the ratio has moved. Examples abound of high-growth names having been crushed in powerful bear markets in those names. Some of them are even top names with innovative products and services and an impressive record of earnings / sales growth: Square ( NYSE:SQ ) has declined about -68% from all-time highs, Upstart ( NASDAQ:UPST ) fell about -81% from its high to its low in late January 2022, and ( Roku ) dropped about 78% from its peaks. Even large cap tech not gone unscathed: Facebook NASDAQ:FB suffered a nearly -50% decline after a huge earnings / guidance disappointment. But in general, large-cap tech has been the exception in growth until the selloff this year. While growth / tech in general has struggled for months, large-cap tech names such as GOOGL, AAPL, MSFT, and NVDA have outperformed. Even AMZN's sideways move for about a year should be considered outperformance relative to other high-growth names as shown by the ARKK chart above: see the chart below, which is a relative chart of AMZN vs. ARKK, revealing that even with AMZN's lengthy sideways move, it has dramatically outperformed growth / tech names more generally. Markets are in constant flux. So often, just when the little people (retail traders like me) take notice of a powerful new trend or outperformance, it ends. So I'm trying to watch for where markets are moving rather than focusing on where they are. In short, is growth bottoming out relative to value? Here are a few charts to consider. 1. The main weekly chart above (also copied below) is a spread chart showing the ratio of NASDAQ:IJT (small-cap growth) vs. small cap value. Notice how close to major long-term up trendline support the ratio has moved. And the weekly ratio is also right at support at March 2021 and May-June 2021 lows. The RSI for this relative chart also shows that it's oversold to 33.65, a level that only appears in multi-month (and often multi-year) intervals. Even the two RSI lows in 1H 2021 occurred 2 months apart, but this is the exception looking back longer term. 2. Large-cap growth is right at support at a long-term uptrend line. See the weekly spread chart of the ratio between XLK/SPY. AMEX:XLK is a US ETF that is heavily weighted towards large-cap tech. 3. Equal-weighted growth vs. equal-weighted tech RYG/RPV is also very close to long-term upward trendline support. 4. Interest rates are nearing long-term downtrend channel resistance—at the upper line (the actual downtrend line). Interest rates have soared powerfully since mid-2020, and the Federal Reserve has hawkishly signaled coming rate hikes, and market participants have behaved as though rates will keep on going to the moon—by selling tech / growth, which struggle when rates rise b/c of discounting of future cash flows used to value such names. The viewpoint that rates could turn around in the near future seems radical, contrarian and unreasonable. But consider this chart below. Could rates turn around just after a large move just after millions of market participants have been flocking towards value names that outperform in rising-rate environments? Some well-known experts have already taken this view. www.cnbc.com It seems priced into the market right now that the 10-year yield could continue rising, that the interest rates could even breakout higher above long-term downtrend resistance, and that the Fed is likely behind the curve in controlling inflation. It seems consensus that value could continue to outperform long-term, and that growth could break even long-term support levels and continue to plummet. But if this is priced into the market, shouldn't one consider buying what's already priced in? Especially because maybe what is priced into the market will not last. Thinking about where the "puck is going to be" may suggest that tech / growth is making a multi-month or multi-year low or that interest rates are going to pullback in the next few months, allowing tech to thrive again.
NASDAQ:IJT
by SquishTrade
4
The Investor Mentality: Are You a Worthy Investor?There are two types of people: people who will read through this entire post and put themselves on a life-changing path towards generational wealth by understanding the essence of investing, and people who simply won't read this post. This post may be lengthy and abstract, but I guarantee you that comprehending the concept of what it means to invest, and how to do so, can change your life forever. This is not financial advice. This is for educational purposes only. Capitalism is much simpler than you think. The goal of the game, as the name suggests, is accumulating as much capital as possible. Interestingly enough, there are only three ways to achieve this goal, and if anyone tells you otherwise, they're either lying or they're a crook. The method is simple - you need to own the three means of production: land, labor, and capital. Land: Only 30% of earth's surface is covered by land. Land, contrary to common belief, is rare in the sense that it's limited. If you own land, you can have factories and houses built on your land, through which you can receive rent. This was also prevalent in the past where aristocrats allowed peasants to farm on their properties, taking a certain percentage of the crops that were harvested without even breaking a sweat. Labor: When you own labor as a means of production, it essentially means that you run a business. What this implies might not be intuitive, but it simply means that you're paying money to buy someone's time. Time is a resource that is much more important than money. Money is infinite, and can even be printed. As for time, both Jeff Bezos and a freshman at college both get 24 hours a day. The difference between the two, is that Jeff Bezos can pay the freshman and hire him to work on whatever needs to be done. Essentially, Jeff is paying to buy the freshman's time, a limited resource. Capital: Capital is the magic sauce that allows all of this to happen. You can buy land, buy someone else's time, and even buy companies that do all of the above on your behalf. But, capital is no good if you don't make that capital work for you. You can lend capital to someone who needs it, and receive interest payments. In this case, interest is simply understood if you think about it as the cost of borrowing money. The name of the game is to either make the capital work for you, or convert that capital to other means of production, which then bring you more capital, ultimately creating a virtuous cycle. When people invest in stocks, oftentimes they get too caught up and focus only on the price action, and forget the fact that buying a stock represents ownership of the company. In other words, if you own 10% of Tesla's shares, you have ownership of 10% of the company whether the company is valued at $800B or $2T. So what do you do when a company that's supposed to be worth $1T, judging by the amount of money it makes (cash flow) and the growth it's showing, drops to $800B? The most logical course of action is to buy more shares. You want to buy more ownership of the company for a cheap price, because you know that the company is going to buy other people's time (labor) and use that to generate more capital for you. It seems so easy, but there's a reason why most people fail at investing. Our brains are biologically wired to focus on short term consequences, and we fail to look at what's best for us in the long term. Thus, we make dumb mistakes like selling perfectly good assets just because "the price dropped too much". "A price drop is an opportunity to buy more of a good prospect at cheaper prices." - Peter Lynch Unfortunately, most people sell when the price drops, because fear, uncertainty, and doubt take over their mind. There is a reason why billionaire hedge fund manager Bill Ackman bought over $1.1B worth of Netflix stocks when the price dropped. He saw no fundamental changes to the company, yet the price dropped due to certain people's irrational decision to sell. And I'm very positive that there's a high chance that Bill will be the last one laughing in the end. I believe that there are only three reasons for you to sell a perfectly good asset: 1) when the narrative has changed (fundamental change in the asset), 2) when you find a better asset, and 3) when selling is inevitable to save your entire position (ex. selling to pay taxes). Unless there is a clear reason for you to sell that fits into one of these three criteria, selling is probably not the best idea. If you truly understand what it means to invest, and convince yourself on why you should be buying or selling at certain levels, you can, and will become a successful investor. Think big, be optimistic, and have patience. If you like this educational post, please make sure to like, and follow for more quality content! If you have any questions or comments, feel free to comment below! :)
TVC:SPXEducation
by Michael_Wang_Official
12
Is Bunge Breaking Out?The rise of inflation has investors quietly returning to many commodity-related stocks that were popular 2003-2007. One of them is Bunge. Earlier this month, the soybean processor touched its highest level in over 13 years. It pulled back but is trying to stabilize around the same $92 area where it peaked last May. Is old resistance new support? BG is also near its 50-day simple moving average. Next, notice how the stock rallied after its last three earnings reports. (Each beat estimates on the top and bottom lines.) Third, something of a rotation seems to be taking place because other similar names like Archer Daniels Midland, Mosaic , CF Industries and Deere are also above their 50-day moving averages. (Unlike the S&P 500.) Overall, it’s been a tough start to the year for most major stocks. But certain corners of the market have held up better. Traders may start focusing on the emerging relative strength in agriculture-related names like BG. TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
NYSE:BG
by TradeStation
1
Energy and Financials Look Like Tech 5-1/2 Years Ago2022 has begun with another sharp rotation from growth to value stocks. The SPDR Technology ETF had its biggest weekly drop in over a year, while the SPDR Energy ETF had its biggest gain in even longer. Financials also jumped: Price action in the two value sectors (XLE and XLF) seems to resemble XLK another moment 5-1/2 years ago. The chart below shows XLK between January 2015 and November 2016. Notice how the tech ETF spent more than a year consolidating sideways after a big run, chopping along its 100- and 200-day simple moving averages (SMAs) before breaking out. There was also a bullish candlestick pattern (post-Brexit kicker) on June 27-28, 2016: XLE and XLF haven’t consolidated as long as XLK in 2016, but they have other similarities. Both moved sideways for at least six months and spent time below their 100-day SMAs. Both made one final higher low at the 200-day SMAs. Both had potentially bullish candlesticks (abandoned-baby hammers). And, most importantly, both closed at new highs. It’s also noteworthy that XLK’s 2016 breakout helped launch the current regime of FANG and “big cap growth.” Now as investors shed tech stocks and monetary conditions grow less favorable , similar breakouts have occurred in the polar-opposite sectors. Are we entering a new phase of the market, led by neglected cyclical value names? TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
AMEX:XLE
by TradeStation
Staying AliveI don't know about you, but I got the Saturday Night Fever for VIAC. Since Archegos made its fatal misstep, VIAC has been under short pressure from the Shylock. Tax harvesting has relieved some of that pressure from shorts. Add market sentiment shifting to risk off appetite, We will likely see a retro stock like VIAC back in fashion this year. I'm not saying the dance will rise to 100 again, but an ascending triangle breakout might see the 40-50 range again by the end of jan.
NASDAQ:PARALong
by SPYvsGME
1
SPX500 Index Investing -Popular method yet less known methodDo you know regular & consistent investment strategy leads to wealthy financial asset creation ? Simple way of doing the investment would result bigger wealth accumulation over a period of time. It is interesting ,Backtest proves YES it works :) Have collected data of SPX500 from 23-09-2013. Goal was to put 500 USD every 7D (weekend ,holidays excluded) & irrespective of Markets accumulate the units. This goes like this .... 2013-09-23 1695 500 0.294985251 ...... ...... ...... 2022-01-3 4788 500 0.104410073 Summary : Total USD invested : 150000 Total systematic investment : 300 times Total Units accumulated : 59.73 Current value of the investment : 286059 Profit percentage : 90% How you can do this kind of analysis,The data can be downloaded from Tradingview . Go to Menu (top left corner)--> Export Chart Data -Download the CSV --> open the CSV file - keep only Date ,Open,high,Low,Close data and in F column and G colum do the math and sum the data from F1:F300(last row) G1:G300 you will get the accumulation value. Refer the screenshot i put below in comment section that will show how to do this. If you like this Comment and like ...
SP:SPX
by MarxBabu
10
MED - underrated stock?Hello my dear subscribers Finally I am back with new investing candidates. Today we will talk about Medifast Inc. It is personal services company, which made own product OPTAVIA for peoples, which want change their lifestyle and habbits on healthy and strong. Levels for entry are here: From 1-year profile we have 2 levels. First level is at 188.42 to 197 USD. That is lower part of market profile and price haven't fallen lower. And from that levels price jumped up. Here we can buy stocks with cheaper prices. Second level is at 223 to 235 USD. That was most popular price with biggest volumes and value for market. It is chance to breaking POC to grow up - it can be positive for both swing traders and long-term investors. Ok, now reasons - why I am thinking that MED will grow fine(source - Guru Focus service)? First: all 2018-2021 year company acts good with good financial result. Net margin is 11,18% and operating margin has meaning 14,67% ROE has meaning 91,53% Last 3 years EPS growth at 56% - which is unique for that industry. And here is no manipultion with financial results. Medifast Inc DO NOT provide activity, which is unusual for that industry. Second: really stable financial situation Low debts (10%), enough cash to pay for debts, high interest coverage and extremely high meaning ROIC (274%) cause strong financial stability for Medifast Inc. Third: well organized business Company works with clients directly, without any third parties. And allow work from home for couches and sellers. This new organization caused 92% of sellings. Company has good PEG ratio (0,44) and fast-circling product. Medifast Inc continue to buyback her stocks and makes strong investing in growth. In official statements Medifast Inc plans to move on Asia-Pacific markets. Strongest points are Hong Kong and Singapour. They are reasons, why at my opinion price and value of the company will grow after new year. So just expecting financial statement 10-K at 31 december.
NYSE:MEDLong
by ValueInvest_Pro
SIMCORP A/S | UNDERVALUED | MARGIN OF SAFETY 47%Hello investors! It has been a while since I posted my latest investing idea/opprotunity. I have been researching SIMCORP A/S for a while now. For my intrinsic value I used a formula from "RULE 1 Investing" by Phil Town. I have calculated 3 differend intrinsic values for 3 differend scenarios. Optimistic: 1999,61 kr Neutral: 1282,01 kr Pesimistic: 837,64 kr Actual value at the moment: 678,40 kr This gives us a margin of safety of the neutral scenario of 47 %. I would recommend to put STOP LOSS and TAKE PROFIT in the areas shown, but maybe consider the stock to be a long term buy, given the undervaluation, that you do not see often these days. This makes SIMCORP A/S seem like a nice buy. In 2020 the stock value and company revenue has dropped by a lot, but looking into 2021 data gives me a strong confidence, that the stock should grow in the future. I would like You to give any kind of feedback on my idea and maybe point out any flaws within the company, that can lead to stock price drop. I wish you all successful investing!
SLong
by JanMachacek
1
ALIBABA BOUNCE FROM TREND LINE Alibaba oversold - RSI is low, historically this has preceded growth. P/E and P/B are low compared to other industry players and historically. Stochastic RSI was also down so tomorrow may be good for a buy. Debt to equity ratio decreasing. despite a bit of increased dept from a few Quarters ago. Let's see what the next few days bring, likely will open a buy position. I will update with TP levels. Hope you enjoy the idea. Let me know what you think below, anything to add or that I miss? Good day to you
NYSE:BABALong
by SaucyLettuce
4