Navigating Bullish Action Bearish Headlines

Here are the market observations for today:

1. A bullish action changes the mindset. It’s what happens on the screen that counts, much more than what you read in the newspaper.
2. The Dow closed last week with a 1.58% gain, its best week since June. The S&P 500 rose 1.82% last week, while the Nasdaq added 2.18%. 
3. What happened to all the supply chain worries and inflation, well it seems two pillars of the American economy: 1. Corporate Earnings and 2. Consumer spending continues to be strong and the market likes it.
4. No wonder, buy the dips worked early in the morning and S&P500 bounced back with intensity in the first 30 min of the trade.
5. 2021 has been a bad year for small-cap momentum stocks and the index continues to trade in a tighter band. The IWM ETF
6. The market breadth continues to be not encouraging. The momentum is restricted to be in a few sectors/stocks.
7. Crude Oil above $80 and hope that the Infrastructure bill would go through is driving up interest in Hydrogen economy stocks be it FCEL, Bloom Energy BE, and Plug. Today, FCEL is up 15%. In our portfolio, we are well-positioned with Plug and BE.
8. Higher Oil and Natural Gas prices mean bullish interest in other energy sources. URA Uranium trade is working well.
9. The regulators are embracing Bitcoin and no wonder Bitcoin ecosystem stocks (Coinbase, Silvergate, MARA) look strong. 
10. When a stock breaks out, it can test your patience, but there is a high probability that it will eventually do the right thing. Example: Macy’s
11. China reported a slowdown in GDP at 4.9% annual growth in the third quarter, much short of the 5.3% growth expected by economists.
12. In the case of some stocks, good times end before even the start of good times. This is the case with US Steel X as Morgan Stanley downgrades the stock.
13. The inflation problems are for real. The product and shipping cost inflation is not just high, it’s brutally high ~ Fastenal CEO
14. Strong stocks rarely disappoint. AMD is now again at 115
15. I love trading. Even if risk and uncertainty make it quite nerve-racking at times. You need to love the game to succeed 

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