business

The 3 catalysts of a booming market


Hello, reader.

The past week has been depressing for Silicon Valley and its northern outpost in Seattle.

Amazon.com Inc. (AMZN), Alphabet Inc. (GOOG), Microsoft Corp. (MSFT)and Meta Platforms Inc. (META) all released lackluster earnings reports, confirming that Big Tech’s post-pandemic boom of 2020-21 is long over. And that kept the S&P 500 and Nasdaq Composite from joining in the Dow Jones Industrial Average’s historic October — the Dow’s best month since January 1976.

Source: Ascannio/Shutterstock

Facebook parent company Meta alone slid more than 20% on Thursday after its weak third-quarter earnings report… and even weaker fourth-quarter guidance.

However, all is not bleak for tech stocks and the broader market. As we told our Strategic trader Over the past week, three signals we’ve been watching tell us there’s reason to hope the S&P 500’s recent uptrend will continue.

Moreover, recent activity in “luxury goods” reveals an additional note of positivity in a crucial sector.

So in today’s letter, we’ll share those three catalysts with you…and how we’re playing the current situation.

How This Breakout Can Stay Strong

As we discussed in last Friday Business Opportunitiesthe S&P 500 – after spending about a month in bearish territory – seems to be starting to break out.

S&P 500 Index Chart

And we see three signs that make us think the breakout has legs…

  1. Leverage and margin debt have returned to a more sustainable level, meaning traders are borrowing less.
  2. Bond traders have allowed 10-year Treasury yield (TNX) down to 4% after climbing to 4.33% on October 21.
  3. And currency traders loosen the dollar and allow its value to pull back and begin to consolidate. This is great news for businesses earning revenue overseas.

While we won’t return to growth stocks just yet, there are some shorter-term plays to be made in Big Tech. In fact, we just added a bullish specialty trade on one of last week’s tech losers to the Strategic trader wallet yesterday.

Microsoft is down about $25 from its “resistance” point at $250. That means traders haven’t let it go past that point for about a month. Meanwhile, Microsoft stock appears to have found “support” – traders won’t let it go below – at $225 following its earnings announcement.

a chart of recent MSFT stock movements

The stock started to rally last Friday, but is currently hitting resistance between $235 and $236. It might break above this level, but we expect further resistance at $250 to be great.

Therefore, we’ve placed a “bet” that Microsoft is heading in the near term…but not that far. This goes hand in hand with our…let’s call it tempered optimism in today’s market.

For details on this MSFT trade – and all of our specialty games – learn more about membership Strategic trader here.

While Microsoft and so-called FAANG stocks suffer, Harley-Davidson’s stellar earnings show us that consumers still have disposable income.

Here’s what it tells us…

Bacon Pork

Meanwhile, Harley Davidson Inc. (PORK) posted 13% growth and beat profit forecasts in both revenue and net income last week. And his forecasts are sunny.Prada Spa (PRDSY), LVMH Moet Hennessy Louis Vuitton SA (LVMHF)and MasterCraft Boat Holdings Inc. (MCFT) have also released strong reports this earnings season.

If we’re buying “pigs”—not to mention boats, expensive booze, and high fashion—we’re most likely also buying bacon…and other staples.

We therefore remain bullish on consumer defensive stocks, particularly discount retail, which is currently undervalued. We are looking for this sector to do even better than “luxury” stocks like HOG and MCFT.

In other words, now may be the time to increase your stock holdings like Dollar General Corp. (CEO), Walmart Stores Inc. (WMT)and Target company (TGT).

Like Microsoft, Target is a title that features prominently in our Strategic trader wallet. We closed a specialty game on TGT for a nice profit in early October.

In fact, year-to-date, we’ve closed 101 deals and achieved a 94% success rate. That’s 95 wins and six losses in a market that returns a loss 17% since January 1.

Advance to Strategic traderwe are already lining up specialty games on several stocks in our portfolio that are poised for big profits as other retailers share their earnings reports and the holidays kick into high gear.

Go here to find out how to join us.

You have questions ? Follow our live stream

Every week we like to answer your most burning questions about market trends, trading and specific stocks in our live broadcasts and here at Business Opportunities.

To get your questions answered, simply send us a message in the comments section of our live broadcasts or write to us at feedback@investorplace.com.

If you’re ready for the market to pay for you as it does for our readers and our wallets, then we can teach you how. Click here to access our Strategic trader Master classwhere you can learn how to potentially earn an extra $1,000 per week using simple, easy-to-learn strategies.

Sincerely,

John and Wade

InvestorPlace

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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