Hunker down… things are going to get rough!
This is the week when we find out for sure just where the US economy stands right now… which of course will reverberate globally!
Signs have been pointing to RECESSION… and the actions of the Federal Reserve this week will most likely confirm it… though our head traders Dennis Sahlstrom and Keith Sullivan have been saying this for some time in recent Trades of the Week instalments… which they reiterate in this week’s Trades der Woche make or break episode!
One thing we may discover… if it proves to be the case… the boys DO have a crystal ball!
MARKETS
So why are they of this opinion?
Well, three BIG announcements are about to be made!
#1 – EARNINGS
We have already seen that 75% of companies, including the Blue Chips, have actually not met analysts’ predictions for earnings, meaning they underperformed on Quarter Two, which we expected. Margins have been getting a lot tighter because inflation was coming up so it’s showing how inflation has actually affected the companies.
#2 – FEDERAL RESERVE
They have been very hawkish on increasing interest rates. They are meeting this week and we’re expecting them to increase interest rates by .75%. The question is – are they going to pivot? If they do, we could see a pile-in in the stock market, because historically that’s what happens! The market should respond positively!
#3 – GDP
This is the big one. We’re going to find out officially if the US is in a recession. However, as regular readers will know, we believe the US has been in a recession since the start of 2022! The key to watch out for is whether Q2 is negative because two negative GDP quarters month-on-month confirms the Big R.
What does this all mean?
It means there will be a BIG, BIG movement in the market!
However… we still believe the market is overvalued and that we’re going to still be on a downside, for the next few months, and what that means is… well, you can find out exactly, on this week’s Trades der Woche.
BUFFALO
ALBERTSONS CORPORATION (ACI) – not stopped out yet, so we’re holding firm. With earnings coming up, we might see a big movement to the upside.
NV5 GLOBAL (NVEE) – moved our stop-loss from 1% up to 2%, so that’s a 2% profit locked in.
BUILDERS FIRST SOURCE (BLDR) – no trade because it did move up too much. We’re recalculating to see if we can get a really good entry here because the reward-risk ratio is really good.
KARUNA THERAPEUTICS (KRTX) – not entered yet, but might soon.
As with everything we do, you must do your OWN research.
We’re adding this week –
GLOBAL BLOOD THERAPEUTICS (GBT) – a good reward-risk ratio, we believe this is a good trade.
COTY (COTY) – we’ve been in this before, we had a no trade, but it is currently looking quite good, it’s broken the shorter-term uptrend and now we’re retesting that.
CRYPTOS
BITCOIN – a little bit of retracement, we did break to the upside. Similar to the stock market, we’ve been in an upward trend and this week will determine what will happen next.
METAVERSE – some really amazing news. A recent report has estimated that if metaverse continues growing at the same rate, it could reach $5 billion by 2026!
Why is this BIG?
Because it could be a great opportunity to position ourselves in the cryptocurrencies that are in the metaverse such as SANDBOX, DECENTRALAND and MANA.
Sandbox is currently down -86%! That could be an amazing opportunity to average into, because we are convinced and absolutely believe metaverse is the future, along with crypto and blockchain.
And what about this… banking giant BARCLAYS has invested $2 billion in crypto firm COPPER.
Its further proof the big institutions are not as dismissive of the whole crypto ecosystem as they once were! And they’re investing now when it’s cheap, of course!
What else?
Another report estimates 1 billion crypto users by 2030!
And that currently 0.3% of individual wealth is held in crypto assets compared to 25% in equities.
So the trend is going up… which is why we aren’t paying much attention to TESLA dumping 75% of its’ Bitcoin holdings. Elon Musk has his reasons for selling and for all we know he might be buying back in a month or so.
BUT, as ever, our message here is to do your due diligence, we have done ours and we are not selling because one person is selling. It doesn’t mean cryptos will go to zero.
You just need to go back through the past 12 years of Bitcoin. And remember what it means. Put it this way… just think tulip mania!
NEW OPPORTUNITY…
APEUSDT (APE) – APE COIN is created by the founders of the BORED APE YACHT CLUB and is down at -78%. They’ve also created a metaverse and partnered with YUGA LABS, which is also very exciting.
APE COIN itself could potentially be a native currency for the metaverse and other NFT projects. Ultimately, we’re still accumulating crypto because this is some seriously positive and exciting news!
VCA
Not much happening here. Some are moving up a bit, but most are moving horizontally. We’re just keeping an eye on ones to accumulate.
Such as…
PAYPAL (PYPL) – is still at a crazy low price, you could be getting in at -80%!
One we are adding:
COGNIZANT TECHNOLOGY SOLUTIONS (CTSH) – an interesting company, a great entry point at -27%, they help clients modernize technology, reimagine processes and transform experiences, focusing on IoT, AI and software engineering. Really good fundamentals, really promising company working for the future here.
So, not a lot happening… but you know, when the market turns it’s going to be very exciting!
RESULTS
STOCK MARKET
BUFFALO: +63.2% on total portfolio
VCA: +1,025% on money invested
CRYPTO
CCA: +1,510% on money invested
Small Cap: 4,320% on money invested
