Speculative momentum stocks are back

Here are the market observations of today.

1. S&P 500 is at 4500. This is how SPY ETF has moved over the last 5 days.
2. Is the market expensive? S&P500 is expected to do an EPS of $206 over the next 12 months. So, yes at 4500, stocks are obviously pretty expensive. But with a 10-year yield of 1.31%, stocks become cheap.
3. It is the cost of money that matters. The tapering upsets the equation.
4. Fed Chairman has spoken today. What did the market like in the speech? Basically, He said what the market wanted to hear. He sounded cautious and hinted that he would wait and see how the economy is moving before adjusting policy and tapering asset purchases.
5. AMD is inching up and now at 110.8 whereas Palantir PLTR is also moving higher.
6. Earnings momentum play holding up well: 1. Macy’s; 2. Palo Alto Networks PANW; 3. Lowe’s; and 4. Medtronics. 
7. The best part of the current rally: Bullish move in IWM small-cap index ETF. It was near $210 last Friday and now trades at $225.
8. I love when stocks do what one expects them to do. ANY is up 9% today.
9. I covered yesterday PXLW at 5.45. The stock is up 18% today.
10. Morgan Stanley has invested more than $1.6 million in Zomedica stock . It’s a penny stock that trades at $0.62 and is in the animal health diagnostics business. Will I buy it? I will not yet.
11. Lots of penny stocks are flying today. The bullish sentiment seems to be returning in small stocks.
12. Trading speculative momentum concept stocks are very risky. You never know what lies ahead. DLPN is down 5.5% today and you don’t know what to do?
13. Never pray when stocks gap down. SAVA was at $120. It opened gap down and closed at $80. Usually one should sell even if it looks ugly but people think how can they take such a big loss? Just see what happens next.
14. The trend matters. Alibaba popped on some short covering but the trend has taken over again. The stock is back to $162.
15. Gap has come out with a brilliant set of earnings numbers. The stock stands at line of support. This is one business that is turning around. If you like the business, then one can consider to go long with a stop loss below 24.5. This is not a momentum play.
16. I regret missing this opportunity. It’s a coal mining company on a relentless bull run. CLF is also trending higher with 100 dma as support.
17. Some stocks have bad luck attached to them. Affirm AFRM broke past $70 but then has tanked below it again due to bad earnings performance from one of its largest customers Peloton.
18. What is Cathie Wood buying now in ARK Innovation ETF? She is buying 3D, Coinbase, and Tdoc. Charts are a mess when it comes to these 3 stocks.
19. I love when breakouts fly like this. SentinelOne S has done the same.
20. Think of success as a long-term endeavor. If you reach it early, fantastic! But you have got to think of it as a journey.

I will add more observations with a new timestamp later during the day

Do let me know how I can make this section more useful.

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers