Has the Bear Market Started?

Hey There Income Hunters,


It certainly felt like the beginning of a bear market on Thursday.


Something of an official switch from buy the dips to sell the rips.


This week has seen the largest drawdown for the Nasdaq 100 Index since May, with big tech suffering the most.


This is a battle for the ages between bulls and bears with volume above average six of the past seven days.


As you can see below, the series of lower lows is starting to look ugly and sustainable based on Fed policy and a shift in money flow from financial assets to hard assets. 


Today, we will take a closer look at the colossal wave of capital that needs to move from stocks and bonds into hard assets. 


Fed Tightening With Stocks Near Historic Highs


It’s starting the year with stocks at such high valuations when the Fed keeps pounding the table on aggressive tightening.



Even the dove of doves, Neel Kashkari from the Fed, is talking about rate hikes now. 


I still have a feeling that the Fed is bluffing just to get the market lower to give them cover to pull back. 


Jerome Powell was at the helm in 2018 when he went through with an aggressive tightening only to flip and have to go back to QE and cutting rates after ruining everyone’s Christmas.


Powell doesn’t want to make the same mistake again but he will have to if the market does go down at least 10% before the hiking starts.


That is why I think you can sell the rallies right now in QQQ and XLK until we go down at least 8-10%. 


This chart shows how similar 2018 was to today’s situation …



QE tightening can be worse than raising rates because QE is the liquidity that has been driving stocks higher.


We don’t know how weak the markets will get once the Fed removes the liquidity. 


Right now I think we have a green light to sell rallies and with the VIX above 20 again, the next couple of days will be crucial. 


Bring It Home


I am currently riding XLK put spreads that I bought on Wednesday. I was tempted to close them out yesterday, but I believe we are going to take out the lows from Monday before we take out yesterday highs. 


I’ll leave you with one other chart today that may explain why the dollar has collapsed in the past couple of days …


Check out how high the PE ratios are in the US versus non-US. This will become a major issue as other central banks are tightening as well.


Why?


Because without the Fed feeding the market, money will flow to where the greatest value is. 


Have a great weekend everyone and as always …


Live and Trade With Passion My Friends,


Griff

Is the Dollar Calling Powell’s Bluff?

Hey There Income Hunters,

 

The Greenback is calling BS on J-Pow … 

 

 

Capital is flowing out of the US just when you would expect the opposite. That is a real warning sign. 

 

Let’s never forget the market is all about liquidity and when liquidity dries up it usually spells trouble for financial assets in a country that has huge debt problems. 

 

Today, I’ll run through why capital is in flight and trades to consider as the heat is turned up at the Fed …

 

Dollar is THE Most Important Signpost 

 

I have to admit I never thought we would see the dollar drop like this so quickly. 

 

Yesterday’ volume was the highest we have seen in over a year. The dollar index ETF (Ticker: DXY) confirmed the breakdown below the 50 DMA from Tuesday on 250% higher volume. 

 

We are now at the lowest levels since early November .. The timing of which comes at the peak of the Fed hawkishness. 

 

Reasons for a Capital Flight out of US:

 

      • Global rate differentials have shifted in favor of foreign countries like Brazil that has raised rates from 2% to 9.25% in 10 months. 

 

      • The other big factor is lost GDP from Covid outside the US 3x larger than GDP lost inside. This is another reason for capital to be leaving the US. 

 

      • You have to consider the fact that China could be selling some of its dollar reserves. I mean the PBOC has been aggressively injecting money into China’s economy and the Yuan has not budged from the dollar.  

 

The bottom line is since the Fed has built up massive debts the dollar has consistently weakened with each set of rate hikes. This has been going on ever since the Fed and banking system took control of the US financial market economy. 

 

Could the Dollar Drop Ignite a SPDR Gold Trust ETF (Ticker:GLD) Breakout?

 

Fed Hawkishness has been a headwind for gold but it hasn’t gone down, which on its own is a positive signal. Now it is knocking at the door to a significant breakout above 171.00.

 

If it breaks above 171 that means it has put in a higher low and a higher high in the shortest time frame. This will turn the short-term trend bullish.

 

Notice in the chart below that GLD has also broken above a confluence  of moving averages on higher than average volume. If we can repeat this above 171 GLD will build some nice momentum.  

 

 

Bring It Home

 

I also like the ETFMG silver miners ETF (Ticker: SILJ). The miners will explode once the metals breakout and historically they outperform the metals significantly once the rally is on.

 

Today come check out the Tradefest at Option Pit where I will join Mark, Andrew, Licia and Frank to give you our take on the next trades for 2022. 

 

I will be revealing a lot of information on what the Fed can and can’t do this year and how to anticipate what their next move will be so you can crush it 2022.

 

We are in for a wild ride so don’t miss Tradefest 2022 … Until then …

 

Live and Trade With Passion My Friends,

 

Griff

“Senator” Powell Played Politics All the Way

Hey There Income Hunters,


J-Pow is the greatest political Fed chair since Alan Greenspan.


And it was absolutely hilarious watching Greenspan speak out of both sides of his mouth. 


He admitted after leaving the Fed that his goal was always for people to walk away not really sure what he said.


Powell must have taken lessons from him because he came out like a man who was extremely concerned about inflation – which most of the panel was – even though he spent six months saying inflation was transitory and not to worry about it


Well at least he toned down the hawkishness yesterday and gave the market a nice reprieve from the correction. 


Today, we’ll take a look at the clues we can take away from the market’s reaction and what to expect in the weeks ahead. 


He Said What?


I thought one of the most significant things J-Pow said during the confirmation hearing was his reference to the economy no longer needing highly accommodative policies. 


Another play on words … I would agree, if Covid is finally over and the global economy strengthens, he may be correct – but that is a big IF.


Let’s face it, the “real economy” has been weak for 20 years. We are a financial market economy.


Now, you would think the Fed chair understood this fact.


And of course he does, he just needs to continue trying to brainwash Americans into thinking everything is fine and dandy.


The Treasury yield curve is a very good predictor of the path the economy is on, so we can find the clues we need there.


When the yield curve is flattening, meaning long rates are going lower relative to short rates, the signal is that the economy is weakening. 


This is due to the fact that if future economic growth is expected to decelerate and interest rates will have to be reduced to incentivize consumers to borrow and spend. 


Let’s take a look at the 10-year rate minus the 2-year rate as the curve barometer. 


Notice the red circle in the above chart that highlights the financial crisis of the late 2000s.


Prior to the market collapse, the 2yr-10yr spread inverted and this is an very important sign for the markets. An inverted curve signals an economic recession is coming anywhere from 6-18 months. 


When the stock market gets this signal it plummets. After the curve inverted, the market went down more than 50%.


In Oct 2006 the curve hit -.20% and in January 2008 the market rolled over and headed straight down until March 2009. 


Small Businesses Tell the Same Story


Small Business accounts for 44% of economic activity in America.


We know they were decimated in 2020- 2021 and may never fully recover. 


Here is business owners’ opinion about expectations for the economy to improve:


We are talking about all-time lows for expectations of the economy to improve!

 

This is the sector of the economy that is involved in economic activity day in and day out. I would say this survey and the yield curve are two of the best forward-looking indicators of economic activity. 

The bottom line is Jay Powell knows this but he must put on a happy face and look for his first chance to bail on the rate hikes and get back to doing what he does best – print money!


Bring It Home


Make sure you join Mark, Andrew, Licia, Frank me on Thursday when we will open your eyes to great trades to capitalize on where the markets are going in 2022. 


It’s TradeFest – and it will be awesome.


We will be providing insight into the great trades from 2021 and a look ahead to what we believe will be an incredible year to trade aggressively across many asset classes as the Fed attempts the most difficult balancing act of all time.


I look forward to seeing you there and provide a lot more details on what I expect the Fed to do this year and how you can maximize your profits by getting out in front of the most powerful money flows in the world.


Until then …


Live and Trade With Passion My Friends,


Griff

The Insiders are Selling Everything


Hey There Income Hunters,


I worked for  the major banks early in my career and had access to incredible information. 


For instance, in 1998 the Long Term Capital Management (LTCM) crisis nearly took the banking system down because of how much money LTCM borrowed from the banks and then went belly up.


At the worst of it, the stock market was melting down and the trading floor went silent …  


Now, I sat near the head of the unit that financed clients’ positions and overheard him telling his broker to keep buying the bank’s stock.


I thought, what does he know?


Well, what he knew was that a group of banks were coming to the rescue of LTCM, to save their own assets, and the bank’s stock went up 10x from where the insider bought it within five years from when he bought it.


Currently most insiders are selling their stocks and again we must ask ourselves what do they know?


Today, I’ll share what they know and why we should pay attention to what they are doing.


The Selling Is Telling


Insiders have been selling their stocks in big size for about a year.


In fact …


Nearly 50 executives have collected more than $220 million each from stock sales over the past  year. 


That is up 50% from 2020 and it’s no coincidence that these guys see first-hand the damage inflation has done to their businesses and how difficult it will be for them to maintain their profit margins. 


The damage away from the FAANGM names has been earth shattering …


ARK Funds names are down 70%.


Meme stocks down 60%.


Crypto off 40%.


It has been a tale of two markets … 


The Insider Selling/Buying Ratio 


The chart below is one you can not ignore. 


This chart looks at the ratio of insider selling to buying. A higher number means there is more selling than buying and vice versa. The correlation of the ratio to outright stock prices is helpful.


This is another signpost for a tightening of money flow into the markets:



The insiders have been looking at the removal of liquidity that is coming after two years of $6 trillion-plus of stimulus and thinking …. Where will the new buyers of stocks come from?


It’s a great question because the buyer of the past two years – the Fed – is now shutting down and may even become a seller of securities in the months ahead.  


The insiders are looking at $2 trillion to $3 trillion of fiscal and monetary withdrawal, plus there is still plenty of uncertainty around the effectiveness of vaccines. 


This is setting up for a real problem for CEOs because inflation plus the fiscal and monetary withdrawal equals a tremendous amount of tightening.


The bottom line is … the Fed can’t accelerate the QE taper, talk about four rate hikes in the next year AND outright QE tightening without destroying growth stocks. 


Bring It Home


The key is to follow the SMART money.

We all know the Fed and the Wall Street banking casino play by a different set of rules.


I mean just read about the Fed insider trading scandal.


So, knowing the C-xuite is selling stocks in their companies is a signal worth paying attention to.


Yesterday was a nice recovery, but was still the fifth lower low in the S&P 500.


The market environment has changed very quickly and you need to change with it.


And I’ll show you how to capitalize LIVE on Thursday when you join Option Pit for TradeFest, an awesome day of insight, ideas and fun.


Catch me from 12:30-2 p.m. EST to find out how out-of-control the Fed really is – and how you can profit from their moves.


Until then …


Live and Trade With Passion My Friends,

Griff

Absent a Fed Walk Back This Week, Look Out Below!

Hey There Income Hunters,

 

J-Pow really shocked the markets last week when he took an already aggressive tightening stance and turned the screws even further.

 

Consider these headlines:

 

      • The Fed may begin absolute reduction of the balance sheet once QE stimulus is removed
      • Once QE is removed the Fed could begin raising rates (March)
      • The market has now priced in an 80% chance for 4 rate hikes in 2022

 

This really sets the markets up for a volatile week. (Good thing we’re all set for TradeFest on Thursday.)

 

Besides listening to every word out of Fed speakers this week, the market will also get an all-important consumer price index (CPI) report on Wednesday.

 

If that wasn’t enough, the Treasury will issue $130 billion in US Treasury bonds in the next eight days. 

 

Today, I’ll share the charts and levels that will be most important to keep an eye on this week. 

 

S&P 500

 

If the Fed continues to talk ultra-hawkish this week, SPX will head below 4,400.

 

However, if J-Pow and his team provide some dovish headlines they could trigger a move to new highs. 

 

I am slightly positioned for some dovish words and a rally, but I think either path is possible this week. 

 

SPX Set-Up

 

We know how badly stocks and bonds need constant liquidity from the Fed and US government in order to maintain these frothy valuations. 

 

So, in the end, I think SPX will suffer a 10%+ correction, which the Fed needs in order to be able get back to what they do best, which is print money. 

Chart Description automatically generated

 

SPX was able to close above the 50 DMA on Friday, but you can see the higher-than-normal volume that has caused the move down last week.

 

It may be worth buying a new low on light volume on Monday to see if buying enters and we get the Fed to throw the market a bone. 

 

US 10-Year Treasury Bond (US10Y)

 

I am bullish on bonds.

 

I do not think there is any way the Fed will tighten four times this year. 

 

The market is way too fragile and as the tightening begins, growth and inflation will slow quickly, forcing the Fed to reverse course. 

 

When the market gets a whiff of the Fed considering a less hawkish stance, bond prices will soar. 

US10Y Set-Up

 

Notice how important the 2% yield is on the chart below. We may grind towards the 2% level, especially in the next week with all the bond supply, but I think the risk/reward favors being long the bond ETFs, including:

 

      • iShares 20+ Maturity Treasury Bond ETF (Ticker: TLT) 
      • iShares 7-10yr Maturity Treasury Bond ETF (Ticker: IEF)
      • iShares 3-7yr Maturity Treasury Bond ETF (Ticker: IEI)

 

Graphical user interface, chart Description automatically generated

 

If the Fed does provide dovish headlines this week, the iShares Investment Grade Corporate Bond ETF (Ticker: LQD) is a great choice for a quick recovery from oversold territory (see below):

Graphical user interface, chart Description automatically generated

 

CFDs on Physical Gold (Gold)

 

Gold has traded very well relative to bond rates rising aggressively. I think this is a most important sign for investors. 

 

If the Fed does make the mistake of over tightening and stocks get crushed, gold may take out $1, 770 and head down towards the $1,675 bottom. 

 

Notice the moving average congestion between $1,830 and $1,770. I will play a break out of this range for a good short-term low risk/high reward trade.

 

However, I am hoping for one last drop in Gold based on a collapse in stocks that will be met with Fed stimulus on steroids.

 

The stimulus would be even greater than the initial $3 trillion after Covid.

 

Gold, silver, and the miners will soar, and the dollar will resume its longer-term downtrend.

 

I believe this final flip by the Fed is inevitable and it’s just a matter of how long the Fed can keep up this balancing act of he said/she said and their hawkish/dovish nonsense. 

 

Bring It Home

 

This market environment is very far from the free markets of the past. Today’s market is like a centrally rigged casino and the Fed is the pit boss. 

 

The great thing about today’s market is that the Fed is predictable.

 

As investors realize the Fed has one tool in its toolbox and that is the money printer, then you can forecast where the market is headed by anticipating what they’re going to do.

 

I know what they are trying to do and what they will do in the near-term future. Want a peek at my blueprint for trading?

 

Join me and all Option Pit traders led by Mark Sebastian on Thursday Jan. 13. for the inaugural OptionFest.

 

Live and Trade With Passion My Friends,

 

Griff

Jobs Report Fuel for Fed Hawks

Hey There Income Hunters,

 

The initial headline print of 199,000 payrolls added versus expectations near 500,000 was disappointing.

 

But the internal data told a very different story.

 

First, revisions to previous months brought the increase closer to 340K and the unemployment rate down to 3.9% from 4.2%.

 

The most significant data was related to hourly earnings, which came in at .6% versus .4% forecast. 

 

Here are two important things to keep in mind:

 

      • People are chasing wages. A company may hire two people on a Monday and then by Friday others are leaving to take a higher paying job at a competitor down the street. 
      • Get ready for a possible wage/price spiral as participation in the workforce is still well below pre-Covid levels and jobs available are at historic highs.

 

This makes the Fed’s job increasingly more difficult …

 

Today, I’ll show you why I think the market has priced in too much tightening, ad the trades to consider …

 

Markets are Front Running the Fed

 

As you can see in the chart below, the markets are now pricing in a 90% chance of a rate hike in March …

 

 

A lot can happen between now and March and most of it can come from slower growth and inflation reports, so the tightening priced in may be going too far.

 

We had a very similar situation built into the markets back in the 2010s. Let’s take a look …

 

Too Tight?

 

The point of the chart below (it’s way down there) is to show that based on how much Fed tightening is already priced into the Bond market, bond ETFs are cheap and could explode higher in the weeks ahead.  

 

You see, as traders the signals we get from bonds are much more forward looking than the information we get from the Fed or stock prices

 

The Fed is, by definition, reactionary to economic data, which is based on past activity

 

Bonds, meanwhile, predict what the Fed activity will do to the economy and how bond prices will move in advance of the data.

 

The chart below shows when the Fed pulls the trigger on …

 

      • Tightening, i.e. QE taper, which is simply pulling back stimulus or 
      • QE reversal which is draining funds from the markets and economy

 

 

How the market reacts is very consistent …

 

      • Stocks go down on any pullback (QE taper) or withdrawal (QE reversal) of Fed stimulus. 
      • Bond prices rise/rates drop when QE tightening begins or is even announced. This is because Bonds are forward looking … 

 

You see, tightening is meant to put pressure on the stock market and reduce growth in the economy and inflation.

 

When growth and inflation slow the best asset to own in Treasury Bonds.

 

Bring It Home

Understanding these relationships can make you a lot of money.

 

The Bond ETFs I am focused on buying are the iShares 3-7 year Treasury Bond ETF (Ticker: IEI) and the iShares 7-10 year Treasury Bond ETF (Ticker: IEF).

 

For full access to trades (along with alerts and management of them) that capitalize on Fed policy and macro money moves, join my Power Income Trader today.

 

Next week I will share additional info on what I’ve identified as the biggest trends for the coming months.

 

Live and Trade With Passion My Friends,

 

Griff

Rotation Is the Winning Game in 2022

Hey There Income Hunters,

 

We talk a lot about going with the flow, and in 2022 that will be more important than ever.

 

Here’s why …

 

The Fed is attempting an impossible balancing act that will make it difficult to trade longer-term this year. 

 

Jerome Powell is being forced to talk super-tough in hopes of causing a correction in stocks. Lower financial asset prices will act as a tightening for the Fed by reducing overall wealth and forcing consumers to reel in spending. 

 

No matter what, the markets will chop around as money flows to value as opposed to the majority of investors chasing a macro trend. 

 

This will be an environment for following the money flow to value …

 

Today, we’ll look at a stock that has tremendous value, plus a way to harness that value. 

 

Intel Corp. (Ticker: INTC)

 

Intel is a dominant player in the designing and manufacturing of microprocessors. They have a wide economic moat protecting their franchise via their cost advantages.

 

They are also constantly in pursuit of opportunities in the Internet of Things space, AI and electric vehicles via their purchase of Mobileye for automotive computing. 

 

Intel recently announced that their first-generation high-powered graphics processing units (GPUs) have already started shipping to manufacturers. 

 

These units support high-level gaming and creative features that will allow Intel to compete with Nvidia (Ticker: NVDA) and Advanced Micro Devices (Ticker: AMD) products.

 

The best way to see how much value Intel provides investors is to look at the INTC/VanEck Semiconductor ETF (Ticker: SMH):

 

 

Notice the weekly RSI/Price divergence as the ratio sunk to new lows, while the RSI of the ratio made higher lows.

 

Let’s check Intel’sa technical setup for a good location to buy …

 

 

Notice the breakout above the 50-day moving average on good volume. I’d like to see a test of the breakout enabling an entry around the $51-52 levels.

 

Doing Everything Well … 

 

Now, not only is Intel trading at an almost 20% discount to fair value, ust look at the up trends in earnings per share and sales, and the downtrend in shares outstanding:

 

 

What more can a shareholder ask for?

 

Plus, INTC has a massive price advantage that earns them a wide moat and barrier to entry into their core business. 

 

Bring It Home

 

This year it will be important to harness value in individual stocks more so than just getting long or short the broad index. 

 

So, you could consider a paired strategy where you can hedge a long position in a stock like INTC with an ETF that holds the value stock in it.

 

That is why I chose the semiconductor ETF SMH. SMH holds a 5.3% weighting in Intel, and as I showed earlier it is extremely cheap compared to the ETF.

 

I will be working on paired strategies and will be sure to come back with ideas.

 

As always I appreciate your thoughts and questions – so send them in!

 

Live and Trade With Passion My Friends,

Griff

The Fed Doubles Down on Tightening … Look Out Below

Hey There Income Hunters,

 

I don’t think anyone could have predicted the Fed would lean THIS hawkish.

 

The FOMC’s opinions on the start and pace of rate hikes was actually startling.

 

      • Based on their opinions regarding the labor market and inflation, Fed members’ believe a federal funds rate increase sooner than they anticipated may be needed.

 

      • Comments also indicate they believe it could be appropriate to begin reducing the Fed’s balance sheet relatively soon after beginning to raise rates. This would entail draining bank reserves through reverse QE once the tapering is completed. 

 

The market has now priced in a 73% chance the Fed starts raising rates in March. 

 

Today, we’ll take a look at what that means for the market and the sectors that will outperform in this environment …

 

Not a Pretty Picture … 

 

Notice the sectors that held the best … consumer staples and utilities.

 

These are the most defensive sectors of the S&P.  

 

There could be much more of a fall to come. The Fed is officially on a hawkish tightening path 

with no end in sight right now.

 

How the Market Will React

 

Take a look at the last three times the Fed ended and even reversed QE …

 

The S&P 500 dropped pretty quickly after QE ended and ultimately traded down between 15% to 20% before the Fed flipped back to providing stimulus …

 

 

Why should this time be any different?

 

I knew this was coming.

 

If you have been reading Power Income, then you knew it was coming. 

 

If you’re a Power Income Trader member, you’re profiting.

 

I had the Power Income Traders in long put spreads on the SPDR Select Sector Technology ETF (Ticker: XLK).

 

In one week the trade was good for a +74% gain.

 

Sell Tech on Rallies

 

We could see XLK head down another $20 from here and that would equate to a 16% drop.

 

Check out the damage that has been done this week.

 

Tech is still the most vulnerable sector in the market because higher interest rates are bad for tech and now the Fed raised the bar on how high interest rates will go. 

 

Watch the US 10-year Yield

 

I don’t think the Fed will interfere with higher rates until the 10-year gets above 2% and maybe even 2.5% …

 

That kind of move higher in rates will put a lot of pressure on tech, especially since mega-cap growth stocks are long duration assets that are inversely correlated to interest rates.

 

The US 10-year yield chart below shows early signs of a potential breakout to higher rates …

 

 

Bring It Home

 

Stay tuned to Power Income for more details on where the money will flow next.

 

I think one of the surprises on Wednesday was how well gold and gold miners held in. 

 

The precious metals have already been beaten down and as the Fed moves closer to having to flip back to stimulating the economy and market – so precious metals and miners will outperform the most. 

 

I also think we should see oil rollover and head lower in the weeks ahead, which will be a great opportunity to get into energy stocks.

 

Until then …

 

Live and Trade With Passion My Friends,

Griff

Tech Breaks Down on Higher Bond Yields

 

Hey There Income Hunters,

 

As I mentioned yesterday, the new year has brought the Bond Bears out of hibernation. 

 

As you can see from US 10-year yields chart below, the rate is up almost .20% to the 1.7% level we reached in November and December. 

 

 

This has been the biggest two-day surge since March of 2020.

 

The mega-cap market leaders including, AAPL, MSFT, NVDA, TSLA and GOOGL who have contributed over 50% of the returns in the S&P 500 since the second quarter of 2021 were all down on Tuesday.

 

There was also employment news that signals we could be heading back into stagflation, which would spell additional problems for earnings.

 

Today, we’ll dig deeper into the possibility tech may run into deeper problems ahead. 

As I wrote about to start the year off, the headwinds for growth stocks are substantial and higher long-term interest rates are at the top of the list.

 

Growth stock valuations compete with long duration bonds because of the duration of their cash flows. So, higher bond rates cause two problems:

 

      1. They hurt growth stock valuations because they create an alternative to long duration investors. 
      2. They also dampen growth because of how much debt corporations are carrying.

Stock Market Breadth is Already Weak

 

As you can see below, during the April-to-October period market breadth fell to historic lows:


The fragmentation in the market was incredible during that time …

Especially, when you consider the S&P 500 index was hitting new all-time highs while many sectors were getting destroyed including crypto, solar, meme stocks and biotech, which were all down between 35%-60%.

It will be hard for the Fed to back off from tightening unless inflation drops substantially, which is not going to happen and we’ll take a look at why in a minute …

Or, the market has a meltdown, which forces the Fed to reverse course back and fires up the printing press. 

The Job Market Is Flashing Inflation Problems Ahead

 

On Tuesday, the Bureau of Labor Statistics released the job opening and labor turnover data (JOLTs) report.

 

The JOLTs showed some disturbing news for a Fed that needs to see inflation come down …

 

Yesterday’s report showed that the total number of job openings continues to be above the number of unemployed workers. 

 

As you can see in the chart below, there are 3.7 million more vacant jobs than unemployed workers, confirming that the US labor market has the potential to drive wages even higher:

 

 

The absolute worst news for the Fed would be to see the job market trigger a wage/price spiral.

 

This would mean wages rise allowing workers to pay higher prices, which then allows companies to pass through higher wages and so on.

 

Why Is Everyone Quitting?

 

Quitters soared to an all-time high in November of 4.5 million. 

 

 

Most of the quitting was in the restaurant business, which is understandable … 

 

Although, quitting when we are experiencing a complete pullback in stimulus is a dangerous proposition. 

 

Value Will Continue to Benefit

 

Uncertainty about the Fed and the lack of stimulus for at least Q1 will test investors.

 

Notice the growth-to-value ratio below as measured by the Russell 1000 growth ETF (Ticker: IWF) and the Russell 1000 Value ETF (Ticker: IWD) …

 

 

Bring It Home

 

The next few trading sessions will be key.

 

Will investors step up to purchase bonds as the Fed sells them into the market? That is the trillion dollar question.

 

The Fed is not only selling bonds into the market but the Treasury will be increasing the size of bond auctions and corporations will be issuing trillions of corporate bonds, as well. 

 

Stay tuned this week and I will update you on any internal changes that can give you clues of where the money is flowing.

 

Right now it is rotating into value stocks but if the numbers show a sharp slowdown is ahead then the entire market will be under pressure.

 

Have a great day and as always …

 

Live and Trade with Passion My Friends,

Griff

2022 Is Off and Running

Hey There Income Hunters, 

 

Everyone loves a new year.

 

A fresh start.

 

A clean slate.

 

For some it’s a new wave of resolutions with hopes of the chiseled body they’ve been dreaming about.

 

For traders it’s renewed confidence you can take your game to the next level.

 

Power Income Trader is rolling out of the gate strong after adding a couple of tax-selling names late last week at bargain basement prices.

 

Today I’ll share the trades and a couple of other stocks to consider this week …

 

Making Moves

 

I've been touting a numb34 very oversold stocks the past couple of weeks and I’ve purchased a few, including:

 

Uranium Royalty Corp. (Ticker: UROY)

 

UROY is a great “pure play” on Uranium for a couple of important reasons:

 

      • The company signed a financial partnership agreement with TD Securities and BMO Capital Markets, among others, to distribute up to $40 million of shares to the market. The shares do not come with warrants, so dilution is lessened.
      •  UROY is a royalty company that provides investments in many producers for a percentage of the profits. This reduces the company’s risk and is why UROY is considered a pure play on uranium.

 

Teladoc Health, Inc. (Ticker: TDOC)

 

Teladoc is the oldest telemedicine company in the US. Since its founding in 2002, the company has been a pioneer of modern, scalable telehealth services.

 

TDOC’s October 2020 acquisition of Livongo, a leader in virtual diabetes care management, provides a lucrative end market and a potential competitive advantage.

 

By packaging traditional telehealth services with remote patient monitoring solutions for chronic diseases, Teladoc offers a unique value proposition.

 

TDOC is expected to grow at about a 31% five-year compound annual growth rate. It could be higher thanks to the Livongo acquisition, which introduced the company to the $50 billion market of remote patient monitoring for individuals.

 

Down 71% is a screaming buy for TDOC, which trades at a 50% discount to price and offers an excellent growth and value proposition that will reap some awesome rewards in 2022.

 

I think TDOC could break above $100 in the weeks ahead …

 

It’s just what the doctor ordered!

 

Nikola Corporation (Ticker: NKLA)

Before Christmas NKLA had rallied almost 20% after announcing its first electric truck delivery.

 

The beauty of this delivery is that it’s a proof of concept with Total Transportation services who signed a letter of intent to deliver 100 NKLA electric trucks.

 

This deal includes a pilot project that requires the delivery of two battery electric trucks and two fuel-cell electric trucks.

 

Upon successful completion of the pilot, the letter of intent calls for 30 BEV deliveries in FY 2022 and 70 FCEV deliveries in FY 2023.

 

 I am willing to take a shot down here … If they deliver this could be a 4+ bagger.

 

I love picking up decent companies that are down 70% from the high … Another stock trading at almost a 50% discount.

 

Bring It Home

 

If you want direct alerts on the exact trades I’m executing, along with analysis on why the trade makes sense and the money flows that are driving it subscribe to Power Income Trader today.

 

And be sure to register for the no-cost TradeFest on Jan. 13.

 

I go live at 12:30 and every other Option Pit Trader will be live at some point throughout the day.

 

You definitely don’t want to miss out!

 

Until then …

 

Live and Trade With Passion My Friends,

 

Griff