High Volatility and Low Returns

We are in a period of high volatility and lower returns. It’s time to be extremely careful about where you are building positions and how you are managing your trades.

Here are the market observations for today.

1. Don’t feel bad if the market makes you feel baffled. It’s incredibly confusing out there ~ Jim Cramer
2. The market is drifting down slowly and painfully. Here’s S&P 500 over the last 10 days
3. Inflation is here to stay. In the 12 months through September, the CPI increased 5.4%. U.S. consumer prices increased in September as Americans paid more for food, rent, and a range of other goods. Consumption economy?
4. Inflation is the No.1 risk that could derail the global economy and stock markets ~ Goldman Sachs
5. The Bears have every reason to be bearish while Bulls have every reason to be worried and cautious. Supply Chain issues and inflation will impact companies badly. The good news lots of stock price damage has already been done in the broader market.
6. During periods of higher inflation, select equities still offer some upside compared to bonds. 
7. Silver ETF seems to be attracting some value buying at lows. I will buy at the current market price in the current chaotic market environment
8. Large Cap Financials ETF is under pressure today. Most of the leading banks are down.
9. Crude Oil prices are above $80 but it is not driving up prices of Oil stocks anymore. Instead, the money is now chasing Clean Energy and Alternative fuel stocks. 
10. Hydrogen economy stocks are moving higher. Today Plug is up 10% on hydrogen-powered aircraft deal with Airbus. Bloom Energy is also not behind up 6%.
11. URA is up 9% today. I recommended it yesterday
12. Blackberry – The company that always creates excitement around creating an exciting future (connected cars) but consistently disappoints when it comes to price action. Fundamentally Bullish but Technically 🙁
13. Cybersecurity stocks seem to be moving higher like crazy. Cloudflare NET tops the list along with Crowdstrike and Palo Alto Networks. SentinelOne also looks attractive. I am not adding it to the trade sheet as I want to be really selective there.
14. Lending Club ~ The investment idea, recommended back in August, has worked very well. Here’s how
15. The “easy” money is made when a new uptrend starts after a correction or a bear market, not when everyone’s comfortable buying.

Trade Sheet:

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