The Mag 7 strike back

BY ANDREW GIOVINAZZI

December 06, 2023

Yo Pit Crazies,

Today, I will show you how to build your own hedge fund without putting up $1 million. I do it week in and week out so come join us.

Just yesterday I said Big Tech was wimping out until the end of the year as money started finding more stocks. That was true but by Tuesday midday investors got those techie animal spirits again. Microsoft Corp (Ticker: MSFT) and Apple Inc (Ticker: AAPL) had their biggest candles in weeks today as traders look where the stocks were and decided they were not high enough. AAPL up almost $4 and MSFT up $3.00.

MSFT 1 month chart

AAPL 1 month chart

The story for the end of the year was not written. As usual in markets, like the weather in Maine, just wait a few hours and it will change.

I did notice something compelling and odd at the same time today.

Do you want to know what it was?

You do.

Lots of Big Tech Stocks are close to Big Round Numbers

In the best market psychology book of all time, Edwin Lefever wrote “Reminiscences of a Stock Operator” about the late great Jesse Livermore. He liked round numbers because they formed a psychological barrier and when stocks went through them he would buy more.

So AAPL is trading $193 to $200

So MSFT is trading $372 to $500

So NVDA is trading $466 to $500

So NFLX is trading $455 to $500

So AMZN is trading $146 to $150

So GOOGL is trading $131 to $150

Mostly this is about awareness. Just think of the SPX and 4600 and it becomes clear. Stocks are animal spirits, greed, fear and any other adjective to describe human behavior. The best shot to clear is AAPL. Implied vol is at a 1 year lows. AAPL Dec29 200 calls are less than $1.00.

If this round number thing is too nutty for you, come on in tonight and check out my webinar on trading and not caring where the market is going. You will not see trading the same way after it is over, I guarantee that.

To Your Trading Success,