Postcards from the florida republic: An independent and profitable state of mind.
We’re in an interesting period for short squeeze stocks. Iffy stocks like Carvana (CVNA), Beyond Meat (BYND), and Wayfair (W) keep screaming higher. That’s what happens when momentum remains positive for weeks.
In the post-WallStreetBets world, these names could well keep screaming until the trade breaks. Wait for momentum to turn negative before you try to start shorting.
Since it’s Saturday, it’s time to look at the week ahead. Here are my observations from 30,000 feet as I reenter the airspace of the Florida Republic.
On Monday, the Federal Reserve of New York releases the Empire Manufacturing Index reading for July. Things aren’t going great.
Economists expect the index will fall to a reading of 0.0, down from the 6.6 July reading. Meanwhile, keep an eye on Microsoft (MSFT) stock as we could see the final legal hurdles fall on the company’s planned takeover of Activision Blizzard (ATVI).
On Tuesday, bank earnings reports kick in hard. We’ll get reports from Bank of America (BAC), Morgan Stanley (MS), and Goldman Sachs (GS). Keep a close eye on the leveraged ETFs we watch, like the Direxion Daily Financial Bear 3X Shares (FAZ) and Direxion Daily Financial Shares (FAS). I’ll also be watching the earnings report from Lockheed Martin (LMT). This will give us some clarity on the amount of money pouring into the defense sector as Ukraine's long-awaited southeastern counteroffensive accelerates. I’ve been looking at selling put spreads on Raytheon Technologies (RTX) given the dramatic uptick in defense spending in 2024.
On Wednesday, Tesla (TSLA) holds its earnings call. The last time Tesla reported earnings, shares dropped 9.8%. I’m expecting the company to top expectations. Instead of speculating on Tesla, I’m looking at the ASX 2X Innovation Fund (TARK) for swing trading during the earnings report this week.
On Thursday, we’ll start getting reports in the regional banking space. We’re looking to see how the space is performing in the wake of the March banking crisis. Keep a close eye on oil prices as well, as March options expire this week. If oil prices decline, it could provide a buying opportunity on various Permian oil producers.
Finally, on Friday, we’ll get the last trading day before the Nasdaq 100 rebalances. We have a lot of focus on tech giants Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Tesla (TSLA), and Meta Platforms (META). As I noted, I’m very intrigued by Starbucks (SBUX) as a name that could see more weight on the index. But instead of buying low-probability call options, consider selling put spreads on Starbucks at a key support level of $96.00.
Tomorrow, I’ll be circling back on my Saturday and my take on FreedomFest. More important, I’ll discuss one of the biggest hot-button topics in U.S. industry… and how we can actively make money by opting out of the noise in politics and board rooms.
Stay alert,
Garrett Baldwin
Florida Republic Capital
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.