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I think I'm getting the hang of COVID. Of course, my wife now has the virus, and our daughter (magically) does not. So, things are tense around here. While I'm feeling a "six of a bag of cow manure," I'll be out of pocket one more day.
With that said, market momentum continues to offer strong gains and big moves on all of the heavily shorted stocks that I first discussed this week. Heck, even JPMorgan was silly enough to rate Charge Point (NYSE: CHPT) a Buy on Thursday despite the company being "unprofitable."
The FOMO is back, everyone... and it's fantastic.
Friday's Momentum Reading
Momentum remains Green heading into Tuesday. Currently, 55% of all stocks are trading ABOVE their 50-day moving average. This is very big news, and stocks continue their bullish ride higher on the back of momentum. Today's watchlist consists of SOXL, GNE, SLP, TSLA, ARKK, and RYAN.
Chart of the Day: Crash in the Factories
I think everyone needs to be very cautious right now. This isn't the bottom, because, eventually, we'll get a real hard taste of the coming economic problems.
There are a few things I need to point out.
First, private equity giant Blackstone Group (NYSE: BX) has set aside $50 billion... BILLION... to buy up real estate from the coming downturn in that market. I didn't believe this at first, and it's just another signal that the American Dream is disappearing faster than ever. The company created a special fund - of course, only inviting accredited investors (the richest of the rich) to invest - worth $24.1 billion that will buy up homes and other assets. This would be the largest real estate fund ever created on earth. This fund will also permit pension funds and endowments to take part - because what better way to effectively kill off the dream of home ownership than with the investment money of teachers and colleges. (Side note, college endowments largely don't pay capital gains taxes).
What else is coming? Well, manufacturing numbers - six months out - look incredibly weak. We haven't seen a projected downturn like this since the Dot-Com collapse or the Great Financial Crisis.
Keep in mind that we're still very early in this global challenge.
Friday's Schedule
- Twitter (NYSE: TWTR) reports earnings. Drink every time Elon Musk's name is brought up on a conference call. Try to survive.
- GameStop (NYSE: GME) will start trading at a 4-1 split-adjusted level after the bell. Can this stupid company just split into a million pieces instead?
- Look for earnings from American Express (NYSE: AXP), Verizon Communications (NYSE: VZ), Cleveland Cliffs (NYSE: CLF), Schlumberger (NYSE: SLB), NextEra Energy (NYSE: NEE), and Precision Drilling (NYSE: PDS).
Where in the world will we find our winning trade today?
The best way to find out is by joining us on our search. Every day my friends from the World's Biggest Trade and I look for mispriced opportunities to exploit.
While we are all enjoying this nice rally, I am starting to sift through the potential short targets for when momentum takes its turn, and we know it will.
With earnings compression, layoffs, and recession on the horizon, we will look to Short the World once again.
If you want to watch an episode of Midday Momentum you may have missed click here to watch a REPLAY.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.