Chris said investors should be closely watching the oil markets after their big rebound from negative prices back in April.
Last week, it appeared the rally in Brent above $40 could be coming under pressure. That's because doubts emerged about the timing of an OPEC+ meeting to agree on an extension to production rates.
But Chris thinks there's still room for oil to drive to the $50 level. And his favorite stocks to trade this move are Halliburton Co. (NYSE: HAL), Chevron Corp. (NYSE: CVX), Occidental Petroleum Corp. (NYSE: OXY), and the Energy Select Sector SPDR (NYSEARCA: XLE).
Chris is also seeing signs of a bifurcated market...
It's beginning to split as tech leaders, which have been so strong during the pandemic, are showing signs of slowing down relative to some of the recent underperformers like financials.
About 30% of the Nasdaq 100 is in overbought territory, and that could be a problem in the coming weeks.
Tom still sees Bitcoin as a long-term alternative asset with high reward potential based on its fixed quantity and its supply/demand economics playing out over time.
Bitcoin is a long-term hold for Tom. He's not trading it because it's too volatile and unpredictable short-term.
Tom finds some of the most recently beat up stocks interesting today:
Royal Caribbean Cruises Ltd. (NYSE: RCL), currently trading for $75 - momentum is strong as this stock has more than tripled since making lows back in March of $22.
Delta Air Lines Inc. (NYSE: DAL), currently trading for $37 - this stock has doubled in the last month as investors are betting people will begin flying again soon.
Las Vegas Sands Corp. (NYSE: LVS), currently trading for $55.50 - Las Vegas, the city, opened this weekend, and it's looking more likely that gamblers and tourists will be returning soon.
Before you make your next trade, think about what type of trader you are and try to be in the 1%:
Ninety percent of traders will trade what they "think" the market is going to do, which is consistently wrong.
Nine percent of traders will trade what they "see," which is better but inconsistent.
One percent of traders are "rules based," meaning they take their emotions out of it and instead trade based on what others don't see.
D.R. expects a brief market pullback will come soon.
But he doesn't think it's going to last long and will instead be another buying opportunity for investors.
He likes utilities companies today because interest rates are still historically low and expected to stay lower for longer. Two of his favorite utility stocks today are:
Southern Co. (NYSE: SO) and the American Water Works Co. Inc. (NYSE: AWK).
D.R. also likes the financials because they had been beaten up so badly through the depths of the coronavirus lockdown.
Now, he expects them to revert to the mean and catch a bid as technology stocks turn over after a strong rally these last couple months.
There are two tech leaders that D.R. doesn't expect to slow down anytime soon, however. They are Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT).
He likes Amazon because of its upcoming healthcare venture with JPMorgan Chase & Co. (NYSE: JPM) and Berkshire Hathaway Inc. (NYSE: BRK.A).
And he likes Microsoft because the release of its newest Xbox gaming console is still on track for the upcoming holiday season.
Shah doesn't know if we're going to see three to four quarters of this irrational exuberance continue.
At some point, investors are going to question these valuations.
The top 25% best performing stocks in the market from 1950 to today had an average P/E of 26.3.
In the last year, the top 25% performers have an average P/E of 38.3 - meaning we're already at lofty valuations.
Shah thinks retail investors have been driving the market higher because they can trade commission-free, buy fractional shares, and have little competition from other betting avenues.
It will be interesting to see if these retail investors will continue buying stocks or not once sports and other forms of gambling come back as more of the economy reopens.
Catch us tomorrow - starting LIVE again at 8:45 a.m. EDT with Chris Johnson, right here.
If you missed our live streams today, you can now replay them on our YouTube channel, here.
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