Thread by @1TrendingMarket

Trying out a blog post as a Twitter thread. Areas covered: #NASDAQ $AMZN $SMH $NVDA $AMAT $AMD $MU $BB $CLNE $GME $CLOV $BABA $JD $DIDI $MJ $TLRY #silver $GDX $GDXJ $SIL $SILJ #oil #natgas #uranium $USO $UNG $DXY $EEM $XLF #Bitcoin

Bullishness price action in stocks prevailed once again last week and bearish sentiment grew stronger. It’s hard to separate the bearish narrative from price action, but necessary in this environment to be objective.

There is plenty to be cautious about. Markets are 12 years into a bull run and each week that passes is likely to be more volatile than the last. This isn’t a typical market and should be treated as such.

My plan to remain bullish on stocks but cautious has worked so far. My gains could have been much more in the last few weeks, but in the event of a large correction (5-10%) I would preserve my capital.

I’m focused on semiconductors and mega-cap tech, which both made significant progress this week with breakouts, continuing strength, and backtests. $AMZN $SMH

In semiconductors, $NVDA broke out strongly. I’m watching g other names that have shown some signs of life but haven’t been able to get going: $AMAT $AMD $MU when these hot new highs the sector will be off to the races.

Meme/Growth names may have found a bottom this week and while action could be choppy, some of them look to be hashing out a bottom. I wouldn’t go all in like the Reddit crowd does, but they are worth a look for a short term trade. $BB $CLNE $GME $CLOV

Chinese stocks are another are of opportunity. I noted this week that $BABA was a good option at 210. I doubled down at 200. Others like $JD and $DIDI are looking attractive too, but I currently have no position.

Another area with a lot of growth potential is pot stocks. Everywhere I look there are new shops and they all have lines out the door. $MJ $TLRY are two obvious ones . I will not pump penny stocks, but there is an endless list worth a buy as they find a base.

Precious Metals remain stuck in a downtrend. At the same time all I see is bullish predictions. With all the resistance since last August we need to see metals prove themselves. Until silver closes above 26 for a few days all I expect is chop or more downside. $SLV

Miners and platinum are still weakening. This also needs to change in order for me to be interested in this area. That’s a no need to be early if precious metals are going to break higher there is plenty of room. $GDX $GDXJ $SIL $SILJ

Energy is likely to pull back on a strengthening dollar too. I’ve been out of #oil for a while and made some quick gains on #natgas. I’ll be interested in #uranium too.

I could have gotten more out of both, but as these rallies progressed they got more dangerous. Last week they reversed nearly a month of gains. I know I can’t hold through action like this so I move on to other areas. $USO $UNG

I think commodities are in trouble because the dollar has made a base, is strengthening, and will be a headwind as it rises. This will be choppy action, but I think the trend in the dollar is up for the coming months. $DXY

Stocks are ignoring the action in the dollar so far. For now traders are happy to see raw good prices fall and the inflation narrative to calm down. This could be the reason for a large pullback at some point, it for now traders are ignoring the risk for potential gains.

Don’t forget, they are ignoring excessive valuations. This can continue for extended periods of time as it already has, but will correct at some point.

The 10 year minus 2 year treasury is declining and no where near producing a bearish signal. It could make process back toward crossing over rapidly, but until it does the risk of a major correction is limited.

What I’m watching for is breaks in trends for securities that are highly affected by the dollar. Precious metals is one area, emerging markets and financials are others. I want to see if these area can continue to new highs, or if they are diverging. $EEM $XLF

I’m also beginning to be interested in cryptocurrencies again. I’ll never #HODL but the recent run up and bust has left a tradeable environment I’m willing to risk some capital on. #bitcoin

Overall my plan at this time is still to day trade and then once over secured a profit I may hold a portion of my positions overnight.

My focus is in mega cap tech and semiconductors (breaking out), and Chinese, pot, and other stocks finding a base.

I expect stocks will continue to rally as small caps and growth turn higher and follow the mega cap tech lead. Just don’t be surprised by a big sudden pullback and lose all your profits when it happens in the coming weeks.

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