Weekly Report: The Really Big Pandemic Lie About Netflix and Peleton
The Vix, Algos, and a little Gold Philosophy
Housekeeping: Sunday’s Founder’s Class will be 3 p.m. ET. Brynne Kelly will be joining us to discuss the Oil, and Natural Gas markets. We expect a packed house. Zoom Link Here. Founders use usual password please. See you tomorrow!
The weekend premium report is a dense piece intended to be read in sections like a Barrons or Sunday paper.
Our exclusive analysis this week is mostly stock based in this 3500+ word report. Market behavior seemed to dictate it. Here are the subsections of the week’s special first section alone:
THE VIX AND MARKET BOTTOMS- Is this a bottom?
THE TIME ZONE TRADES- Algo spotting
THE FED PUT- is there really one, and where is it now?
FAANG STOCKS- The really really big lie revealed about Netlix and Peleton
Market Summary: weekly recap
Technicals: active trading levels
Podcasts: GoldFix and Bitcoin
Charts: related markets
Calendar: next week
1. Market Summary
Where to start.. We read a lot this week and watched markets closely. “Class” was definitely in session for us. We looked for information and tried to curate what was most relevant and hope it is helpful to you both in your personal decision process and your growing knowledge base of this part of your lives.
Monday Was MLK’s Day. Markets were open Tuesday through Friday.
Our own thoughts as always were to figure out how to make money, or in this case, minimize losses. Second is to handicap future market behavior and how it would affect things.
This the 3rd straight weekly loss for the S&P (its longest weekly losing streak since Sept 2020) with every bounce hit hard.
Nasdaq and Small Caps were the hardest hit this week with The Dow the best of the bunch. This was the worst week for Nasdaq Since March 2020, and S&P and Dow's worst since Oct 2020.
The Nasdaq Composite is down 14% from its highs, but the Russell 2000 is worst, down over 18% from its highs (S&P -8.1% from its highs and Dow -6.75%)- this is a comment on the need for many of these negative cash flow companies to have easy Fed money. Recall 2 weeks ago we discussed Goldman’s take on Tech stocks and duration risk as the new boogeyman on the street.
If the [get out of duration] advice takes hold we could see a large selloff in Nasdaq and S&P 500 stocks. This is not a prediction. But it is a risk. A whole generation is long stocks. A whole generation is retiring. That same generation is now meeting with advisors to re-balance portfolios for 2022 and possibly pay a big tax bill.
We ended that section of the report with this:
If enough people take this advice and move in herd fashion, you could see a big dip the next few weeks.
And then last week we again said:
Because if we are wrong, then this is instead a broadening of the selloff as the “safer” stocks are no longer doing well. The tech rally on Friday would then just have been a dead-cat bounce
Well, this week may actually be a short term bottom give or take 100 S and P points. Put it this way: last week showed many many signs of panic and the Fed meeting is coming up. So maybe stocks get lucky next week.
A lot of scrambles to explain what is going on hit the air waves. We wrote on some of the themes, with a couple you won’t hear anywhere else. Enjoy!
THE VIX AND MARKET BOTTOMS
Volatility is a barometer of risk. The Vix term structure inverted last week. It very frequently is a good indicator of a short term bottom. Behold the financial media’s take on this.
A “Time-Honored Bull Signal”…
But why is it a good indicator of a short-term bottom? It is because people are very panicky now and worried about tomorrow, not next year. This graphic may help.
From “All is well” to “Oh Crap!” in a week…
Keep reading with a 7-day free trial
Subscribe to GoldFix to keep reading this post and get 7 days of free access to the full post archives.