Sponsored by
Happy Sunday 🌞 to our outstanding members 🫂 .
We have a lot of exciting information to cover today, so kick back and enjoy the reading!
Check out our Sponsor, the Yellow Brick Road.
We only partner with companies that have value.
Get the best stock ideas
Our AI tool scours the internet every day for the best stock ideas that we share with you each morning in our free, daily email.
We find stock ideas from:
Billion-dollar hedge funds
Professional analysts
Millionaire investors
and more…
We’ve already found stock ideas like:
Carvana ($CVNA) - +822% in 4 months
Myomo ($MYO) - +507% in 3 month
ImmunityBio ($IBRX) - +313% in 1 month
and a ton more…
Subscribe to our free, daily email to start getting the best stock ideas sent to your inbox each morning.
Proceed with reading…
Table of Content
The Sunday Read
🗣 Livestream with us! Join Free Discord for Stock Market Recaps & Q&A.
🧑💻 Access stock picks & Discord alerts in real time here
🧑💻 Emailed investments & trading levels without alerts for ½ the price, here
Education
I have a question before we start the educational part of our Sunday read.
Click on X to vote, or vote below
3 Simple Strategies to build a reliable, long-term portfolio.
Diversification:
Asset Allocation: Allocate your investments across different asset classes, such as stocks, bonds, and cash equivalents. Diversifying helps spread risk and reduces the impact of poor performance in any single investment.
Sector Diversification: Within each asset class, diversify further by investing in different sectors of the economy. This can help mitigate the risk associated with economic downturns affecting specific industries.
The takeaway: In an account where you hand-pick stocks, you may only need 10-12 companies that you are committed to. Having mutual funds, index funds, real estate ETFs, bonds, gold, etc., is a great asset that allows your money to grow with less risk.
Long-Term Focus and Patience:
Buy and Hold: Adopt a buy-and-hold strategy for core investments. We defined core investments here.
Avoid frequent trading based on short-term market fluctuations. If you trade, keep this action in a separate account with its own risk tolerance.
Regular Contributions: Consider making regular contributions to your portfolio. (You can move money over each month allocated to long-term investments, automatic dividend reinvestments, etc.)
Risk Management:
Emergency Fund: Maintain an emergency fund equivalent to 3-6 months' worth of living expenses in a liquid and easily accessible form.
Review and Rebalance: Periodically review your portfolio and rebalance it to ensure that your asset allocation aligns with your financial goals and risk tolerance.
Data
Upcoming Data
Early in the week:
This could be a great continuation setup on companies like $AMZN or on the $SPX index if we get decent consolidation on Monday.
Later in the week:
Key data is Initial Jobless Claims at 8:30 am on Feb. 15th and Core PPI at 8:30 am on Feb. 16th.
2 pending IPOs for 2024
Plaid | Financial Services/Tech | $14 billion |
|---|---|---|
Discord | Social Media/Tech | $15 billion |
Plaid is a technology company that operates in the fintech sector, providing crucial infrastructure that connects various financial applications with users' bank accounts. Learn more about Plaid and their IPO here!
Discord is a versatile digital communication platform renowned for its text, voice, and video chat capabilities. What you need to know about Discord’s IPO.
More upcoming IPOs for 2024
Upcoming Earnings Release
Price Range | Shares | Date :
WETH $5.00 - $7.00 | 4,000,000 | Week of 02.12.24
NYX $4.00 | 2,106,250 | Week of 02.12.24
MTRS $6.40 | 1,000,000 | Week of 02.12.24
MAMO $4.00-$5.00 | 1,300,000 | Week of 02.12.24
AMDI $3.50-4.50 | 1,750,000 | Week of 02.12.24
You can view more info here.
Earnings Calendar for Feb. 12th
If you’ve stated you want further guidance, join our Free Discord to join future group livestreams.
View past live stream here.
Recording on Risk Management here
Free Discord Room. Ask Questions anywhere and anytime.
(Join)
Roadmap
Anything is possible
Unless you’ve been avoiding all of our readings, you know I have not been bearish on the market. In fact, on many occasions, I have stated that the market could run to the upside into March rate cuts.
Though the narrative may change with the news below, based on key observations during the last couple of weeks, the market could remain irrational.
Feds may not cut rates in March as promised.
2 Key Observations
Gif by nbc on Giphy
Earnings
Any company that has made AI updates to its system has done well and has had a positive reaction from investors. Companies like $PYPL may have billions of cash on hand and beat expectations lacking in the AI area. Even $SNAP had decent numbers but lacked future guidance. Here is more on that. I bet if they were to initiate new AI software that made advertising more efficient for advertisers, investors would have been more interested in their earnings reports.
$NVDA has burst through all resistance levels. Why? People believe in the AI revolution. $NET(Cloudflare) has updated its AI models.
$PLTR technology has a lot to do with Artificial Intelligence, and they are being rewarded with various commercial and government contracts for what they bring to the table.
$AMD, $MSFT, AMZN, you name it. AI technology is a massive part of what people believe companies should prepare for.
Rotation
Companies within the Magnificent 7 (Amazon, Meta, Google, etc.) are carrying the market.
Companies like $BABA, $SQ, and $CHWY seem to have momentum rotating off the lows. I’m not saying the move has to occur now, but will they contribute to the market trading above 5200s? If the previous leaders stagnate, will mid-caps take over?
For the sake of buying companies at key demand zones, it would be worth a shot for equity swings.
Thoughts for the week
For this week, if inflation and jobless claims data support March rate cuts, the market can continue to trend higher without much of a drawback. For example, the revised CPI was at 0.2% from 0.3%, showing inflation slowing down.
More information is below.
If data this week shows that inflation is not under control as expected or that we won’t cut in March, though the market may still be in a bullish trend, I think we could experience a pullback to the 4960-70 area on the E-mini before the market chooses its next move.
Keep reading for levels.
Trading Levels
If you haven’t read the general roadmap/thoughts on the week, please go here to give content.
/ES
This week, a key downside zone is this 4970-50 range.
My key level would be 4972.
If I can take this trade long, it will be partial size since we could have an extension into 4750-60.
If this zone holds, we could trade back up to 5030. Ideally, this is risking 15 points for 40-60 points.
After Jobless claims early in the week, I will watch to see if 5030-50 remains resistant. If we don’t see closes above 5030-50, we could test lower levels later in the week. Avoid shorts if we close above 5030, as we could trade 5100 next.
Strategic thought:
I am scalping /ES; I am not using $SPX or $SPY options. I am bullish, but not so bullish to buy calls 2-3 weeks out. There may be more to the move, but the majority of the move is done. (In my opinion)
The move started at 4000 /es months ago. I can scalp, take 10-15 points on a good day, and trade companies rotating higher or acting as a leader to this $SPY bull run.
Some levels like $BABA, $TSLA, and $AMZN have stayed the same.
View Levels from last week here.
Since last week, we have opened positions based on those levels. $AMZN now 🟢 +99% $TSLA 🟢 +35%
To access levels like this via newsletter upgrade here for $15. (includes a free trial)
SNAP - We added shares on Friday at 10.9. As long as we close above 10.5, this could retest $15 before choosing its next move. I am sticking with equity instead of options for this swing trade.
META - We are currently holding 500c, and I will remain bullish on this trade as long as 460 holds. It needs to break 476 resistance to gain momentum. It is currently trading 468. Target 485, 495
$TSLA - We entered last week at 184, and Tesla closed the week at 193. We trimmed a quarter of our option calls at 35%. Our target remains 215. It’s a winning trade, as our stops on the remaining contracts will be at entry.
$AMAT - has earnings on the 15th of this week. (upgrade to continue)
Social Media
Interesting topics on the web
Simplified definition.
A core investment typically refers to
a fundamental and stable component of an investment portfolio.
It represents a long-term, strategic holding intended to provide stability, consistent returns, and a foundation for the overall portfolio.
Core investments are often characterized by qualities such as low volatility, reliability, and a focus on preserving capital.
The Investors’ Mindset is Changing
The full reading was posted on Bloomberg.
Einhorn Says Markets ‘Fundamentally Broken’ By Passive, Quant Investing
Greenlight Capital was forced to shift its strategy as the growth of passive investing and algorithmic trading transformed markets, founder David Einhorn said.
www.bloomberg.com/news/articles/2024-02-08/david-einhorn-says-markets-fundamentally-broken-by-passive-quant-investing?utm_source=website&utm_medium=share&utm_campaign=twitter?sref=1zxv5xkq
Bull Market Bubble? Or Just the Beginning?
This topic is very interesting because the industry is changing before our eyes. For example, Retail and Analyst talk about this AI trend and the current bull run of 2023-2024 being a bubble, but I agree with Dan, its more of a start to a revolution. Click to view this interesting take.