Picking a market top or a market bottom is really tough, yet here I am say or maybe suggesting a market bottom has been made in the last two weeks.
Something Broke – Terra Luna broke last week. People close to Terra Luna are trying to fix it, but a lot of psychological damage has been done. Bitcoin saw 2.4 Billion US Dollars’ worth of coin trade a week ago Thursday. That is certainly a panic sell by someone. Terra Luna. More importantly is the question – who bought. The price of Bitcoin dropped from around $30,000 to $25,000 and came back to $30,000 in about 24 hours. This week Bitcoin sold down to just under $29000 and seems to be holding. No bottom is complete until we can look backwards and see the price moving higher and out of the low price area. We will need to see the price cross above $31,000 and $32,000 for that.
Easing off ever so slightly in economic numbers:
- Unemployment rose, suggesting a softening of the economy.
- The inflation number did not move higher in April, backing down ever so slightly.
- Treasury interest rates might be forming a top and correspondingly bond prices are trying to form a bottom.
Gold and Silver and even growth stocks faired better this week even as the Dow Jones got slammed. Risk on is sneaking back. Seems to be so.
Some Family offices and hedge funds are covering or covered their short positions and are going long. Energy seems popular. Maybe too popular but until supply increases oil and Nat Gas will stay strong.
- Michael Burry – noted for shorting the ARK ETF’s about 15 months ago is no longer short but going long the market.
- David Tepper covered his short position in NASDAQ 100.
- Stanley Druckenmiller appears long energy and value stocks but not short the market.
FinTech Payment companies are acting stronger this week than last week. Big moves upward in our top picks STNE and PAGS. I noticed Michael Burry added GPN (Global Payments) to his buy list of stocks bought in Q1.
China is easing off on it interest rates after a more than a year and more of tougher regulations and higher interest rates.
It is early to call but “the early bird get the worm?” It totally depends on your style. Lots of solid dividend stocks available as first selections instead of the higher risk more volatile growth stocks Symbols of our top three at this time are two familiar ones AM at 8.9% and Soluna Holdings Cumulative Preferred (SLNHP) at 13.6%. we also like IAF with a 11% dividend, trailing P/E of 3 and is a closed end fund for diversity from single company risk.
Want to break the tension and perhaps a bit of fear in the market? Buy or sell a small (tiny) amount of something. Breaks the Ice. Dividends anyone?
LOTM Research & Consulting Service
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