As we kick of an important week for investors, the market is picking up where it left off on Friday…
In the middle of a bear market rally!
Stocks are set to trade higher this morning. But any number of issues could derail this rebound.
So as an investor, it’s important to stay vigilant and nimble.
Tuesday’s Consumer Price Index (or CPI) report will have a big effect on the overall tone of the market.
If the report shows inflation is still hot, the bear market rally will likely get stopped in its tracks.
That’s because investors will expect the Fed to continue to raise rates aggressively. And higher interest rates typically drive stock prices lower. (Especially high-growth tech stocks.)
But thanks to a loosening labor market, lower gasoline prices and a recovering supply chain, many expect the CPI report to be relatively tame.
A low inflation print could give investors a shot of confidence, leading to another “risk-on” surge.
With such a high level of uncertainty, it’s important to be prepared for either outcome.
That’s why I keep a regularly updated watch list of bullish and bearish stocks. This way, regardless of which way the market turns, I’ve got a plan and some go-to names to benefit from specific situations.
Over the weekend, I updated my 20-20 Watch List — adding a few names for each section and making notes on specific situations.
If you’re already subscribed to the watch list, you can use the links below to access each section.
And if you’re not subscribed, its only $49 per year (or $15 per quarter) to get access. That’s a small price to pay for a list of vetted stocks to help you grow and protect your wealth!
More information on the 20-20 Watch List here
Let’s take a look at what’s on my list for the week ahead.
Access the full list of 20 bullish plays here.
The bear market rally continues, and could have farther to go. Sentiment has been largely bearish which means many investors have significant amounts of cash on the sidelines.
As markets move higher, fear of missing out (or FOMO) can cause these investors to buy. So this bear market rally could become a self-fulfilling drive higher.
Here are some highlights from the “bullish plays” weekend update:
- Added CMG: Strong profit growth and ability to pass inflation through to customers.
- Cut NVDA: Stock broke below support, concerns for future demand.
- CF: After breaking to a new high, CF’s recent pullback looks like a good buying opportunity.
- EXPE: Building a base and rebounding off the 50-day average.
- PANW: Breakout in August may get follow-through this week.
Access the full list of 20 bearish plays here.
Even after a brutal decline for speculative tech, there are a number of vulnerable stocks that still have farther to fall.
The bear market rally has actually pushed many of these high-flying names higher. And that gives us a great opportunity to set up new bearish plays betting on these stocks trading lower.
I’m expecting this week’s CPI print to be a bullish catalyst for the overall market. But if we see inflation come in hotter than expected, many of these bearish plays will roll over and trade sharply lower.
Here are some highlights from the “bearish plays” weekend update:
- Added AFRM: “Buy-now-pay-later” is competitive and unprofitable.
- Added DKNG: Big losses in an extremely competitive industry.
- Cut SPLK: Stock pulled back to support – more reasonable valuation.
- Cut ZM: Shares found support and valuation is now more reasonable.
- ROKU: Muted bounce even with overall market trading lower.
- TSLA: Trading near 200-day resistance level.
Access the full list of 20 income plays here.
My put-selling income strategy collects payments from specific stocks in exchange for an agreement to buy shares at a specific price. Learn how this strategy works here.
The more volatility and uncertainty in the market, the more income we receive. It’s a good season for our income strategy and I’m excited about our income prospects headed into the end of the year.
Here are some highlights from the “income plays” weekend update:
- Added CHPT: Electric vehicle charging – Inflation Reduction Act spending.
- Added RIOT: Crypto may be bottoming, profits from blockchain.
- Cut TEX: Option prices don’t offer enough income.
- Cut YETI: Stock broke below support.
- CLF: After pulling back, shares offer value. Support above $16.
- OXY: A pullback to support offers a good entry point.
That’s all for this morning.
Stay up to date with my real-time thoughts and perspectives on the market by following my Twitter stream and LinkedIn profile.
Here’s to growing and protecting your wealth!