Good morning,
Nothing is ever as good or bad as it seems, and the theme of today’s report, and arguably last week, is offsets.
Last week, the two big events were Nvidia and retail earnings. Nvidia, which had rallied hard ahead of its report, failed to deliver more gains, while retail stocks, which were in the doghouse, saw a sizable bounce.
That bounce in the rest of the market pushed the equal-weight S&P 500 to a new all-time high, finally joining its cap-weighted counterpart.
That’s unambiguously good news, but as I review this market, for every pro I can find there seems to be an equal and opposite con. A few other examples:
Breadth improved last week with four of five days seeing more advancers than decliners for the first time in over a month. But, the new high data is still missing in action.
Memory mania has cooled with DRAM flat over the past two weeks, but the strength in Apple (a May Blue Chip Hot List addition) has more than made up for it.
Spot oil prices are down meaningfully, but the December contract is still holding its breakout.
AAII investors are getting more bearish but the put-call data suggests nobody is actually buying protection
I could go on, but suffice it to say, the risk across the market seems balanced.
However, it’s our job to find where the reward isn’t, and today’s Plays and supporting charts will highlight two portfolio themes where investors can add value, as well as some compelling ETF and single-stock trade ideas.
This week’s report will review:
Key support on Bitcoin
The most important charts from last week
Offsets in breadth, sentiment, and oil prices
ETF movers
