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Premium daily stock trading service. In our Stock Trading Alerts, we provide extensive analyses and comments at least 1 time per trading day, usually before the opening bell. The analyses focus on all the key factors essential to determining the medium- and short-term outlook for the S&P 500 futures, spanning over several time frames, credit markets and S&P 500 sectors and ratios. They also capture the key fundamental developments, events and trends in assessing the prospects and health of the S&P 500 moves. This way, you’re kept up-to-date on important developments that far too many investors are apt to miss or underestimate.

Whether you're looking for objective analyses to broaden your horizon / add confidence to trading decisions, or want to get inspired by our trade calls for S&P 500 futures, Stock Trading Alerts are the way to go.

  • Emerging Markets Stocks and ETFs for 2021

    January 22, 2021, 10:03 AM

    There’s not a rigid definition of what an emerging market is. For example, China is still the leading country in many emerging market ETFs and funds. But is it fair to consider China an emerging market any longer? It has nearly 1.4 billion people and was the only major economy globally to see GDP growth in 2020.

    That’s like calling Giannis Antetokounmpo an up and coming superstar despite winning the last two NBA MVP awards.

    But even if I did see China as an emerging market, it wouldn’t be my top choice for 2021.

    If you’ve been reading my newsletters, you know that I love emerging market exposure this year. The dollar is weakening and should continue to weaken with trillions more in stimulus and rising commodity prices.

    Meanwhile, emerging markets are perfectly positioned to exploit this and grow as a result.

    You also know that I’ve been talking about specific emerging markets like Taiwan, Thailand, and Russia.

    But in this special emerging markets newsletter, I will aim to further talk about what to look for when investing in a country, what other emerging markets to consider, and why I think they are set to outperform the US markets this year, after many years of underperformance.

    Why emerging markets?

    For several reasons!

    For one, did you know these facts about emerging markets? They have:

    -85% of the world population

    -77% of the land mass

    -63% of global commodities

    -59% of global GDP (using PPP)

    -12.5% of world’s market cap

    Consider this for long-term investing too. Advanced economies are aging rapidly while emerging economies have youthful demographics.

    That’s why PWC believes that emerging markets (E7) could grow around twice as fast as advanced economies (G7) on average.

    For emerging markets, this could be very advantageous in the coming decades.

    With American debt building up at an alarming rate, and the U.S. Dollar set for broader declines, this trend could begin sooner than we realize.

    U.S. investors also usually have >5% exposure to emerging markets, making this an even more untapped opportunity.

    Aren’t emerging markets risky?

    Of course, you have to consider political risk, credit risk, and economic risk for emerging markets.

    But did you see the U.S. Capitol two weeks ago? Have you noticed how its currency has performed since March?

    Figure 1- U.S. Dollar $USD

    Have you also seen the Fed’s balance sheet? Have you seen the S&P’s valuation and the tech IPO market?

    I would even argue that emerging markets could hedge against America’s political, economic, and currency risks right now. The pandemic only exacerbated this.

    Furthermore, if you look at the returns of the emerging markets I will discuss today: Taiwan (EWT), Russia (ERUS), Thailand (THD), Vietnam (VNM), South Korea (EWY), Indonesia (EIDO), Chile (ECH), and Peru (EPU), you will see that all have outperformed the S&P 500 (SPY) since September.

    Figure 2-SPY, EWT, ERUS, THD, VNM, EWY, EIDO, ECH, EPU comparison chart- Sep. 1, 2020-Present

    Taiwan iShares ETF (EWT)

    Figure 3-iShares MSCI Taiwan ETF (EWT)

    The Taiwan iShares ETF (EWT) has overheated more than the other emerging market ETFs based on its RSI that I will discuss. But if you’ve been reading my newsletters, you know I love Taiwan.

    Taiwan has also arguably been the best call I’ve made since starting these newsletters.

    I have been consistently calling Taiwan a better buy than China, despite China’s undeniable upside. Taiwan has the same sort of regional upside, without the same kind of geopolitical risks.

    Consider this too. Despite China’s robust economic response to COVID-19, retail sales still fell 3.9% over the full year, marking the first contraction since 1968. Lockdowns have also returned to China with a vengeance thanks to a new wave in COVID-19 infections.

    Ever since I called the EWT a buy on December 3rd, it has gained nearly 16% and outperformed the MSCI China ETF (MCHI) by approximately 3%.

    It has also outperformed the SPY S&P 500 ETF by nearly 11%.

    Taiwan also is unique for a developing country because of its stable fundamentals. It has low inflation, low unemployment, consistent trade surpluses, and high foreign reserves.

    It also has a diverse and modern hi-tech economy, especially in the semiconductor industry. With a diverse set of trade partners, Taiwan could only be scratching the surface of its potential.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Matthew Levy, CFA
    Stock Trading Strategist

  • The Tug of War Continues

    January 20, 2021, 9:15 AM

    This market continues trudging forward and weighing good news with bad. After stocks closed last week with their first weekly declines in nearly a month, stocks staged a mild recovery on Tuesday (Jan. 19th) led by tech, big banks, and small-caps.

    Today's gains were primarily thanks to renewed stimulus hopes, faster vaccine distributions, and strong bank earnings. However, this is far from an “all clear.”

    It still reminds me of the Q4 2018 pullback (read my story here). I remain steadfast that there is way too much complacency in today’s market- despite long-term tailwinds. In the short-term, we are truly walking on ice.

    For one, valuations are absurd. Tech IPOs seem more like Barnum and Bailey than a capital market, the S&P 500 is trading near its highest forward P/E ratio since 2000, and the Russell 2000 has never traded this high above its 200-day moving average.

    Signs are starting to point towards the return of inflation by mid-year as well. Despite declining Tuesday (Jan. 19), the 10-year yield remains around its highest level since March. Economist Mohammed El-Erian believes that “if we were to see another 20 basis point move in yields, that would be bad news.”

    Edward Jones also claims that the 10-year breakeven rate, a market-based measure of inflation expectations, is at its highest level since 2018 thanks to rising commodity prices, a weaker dollar, and broad stimulus policy.

    There are also some signs that the market is already pricing in Joe Biden's $1.9 trillion stimulus package.

    On the one hand, according to Jim Cramer, “when an event occurs and the market gets exactly what it wants, but nothing more, it’s treated as a reason to sell, not to buy.” What happened in the market last week reflects this.

    On the other hand, some of the economic benefits may not have been priced in yet. For example, JP Morgan believes that this stimulus plan could cut unemployment to less than 5% by year’s end.

    But remember- the stock market is not the economy.

    I remain firm that a correction between now and the end of Q1 2020 could happen thanks to this neverending pay-per-view bout between good news and bad news.

    We may trade sideways this quarter- that would not shock me in the least. But I think we are long overdue for a correction since we haven’t seen one since last March.

    Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).

    A correction could also be an excellent buying opportunity for what should be a great second half of the year.

    Therefore, to sum it up:

    While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.

    In a report released Tuesday (Jan. 19), Goldman Sachs shared the same sentiments.

    My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth. Hopefully, you find my insights enlightening, and I welcome your thoughts and questions.

    Have a great shortened trading week! Best of luck.

    The Nasdaq’s RSI Indicates Hold- Deeper Pullback Coming?

    Figure 1- Nasdaq Composite Index $COMP

    If utility stocks are Subarus, tech stocks are Ferraris.

    These stocks get the most glory, show the most growth potential, and are innovators and disruptors.

    Pay close attention, especially to cloud computing, e-commerce, and fintech in 2021.

    I am sticking with the theme of using the RSI to judge how to call the Nasdaq. An overbought RSI does not automatically mean a trend reversal, but with the Nasdaq, I always keep a close eye on this.

    Over the last several weeks, the Nasdaq’s RSI has indicated a consistent pattern.

    The Nasdaq pulled back on December 9 after exceeding an RSI of 70 and briefly pulled back again after passing 70 again four weeks ago. We also exceeded a 70 RSI just before the new year, and what happened on the first trading day of 2021? A decline of 1.47%.

    The last time I changed my Nasdaq call from a HOLD to a SELL on January 11 after the RSI exceeded 70, the Nasdaq declined again by 1.45%.

    Despite ticking back up on Tuesday (Jan. 19), the Nasdaq is still no longer technically overbought. But the tech IPO market screams dot-com bubble to me.

    Last week, Lender Affirm nearly doubled in its public debut, while Poshmark surged by over 130% during its world premiere.

    I have no other words to describe it besides a circus.

    I still love tech and am generally bullish for 2021. But I need to see the Nasdaq have a legitimate cooldown period and move closer to its 50-day moving average before considering it a BUY.

    I also have some worries about how full Democrat control could affect tech stocks thanks to higher taxes and stricter regulations. A Blue Wave is better for small-caps than tech.

    For now, because the RSI is still a HOLD, I’m keeping my HOLD call.

    If the RSI ticks back up above 70, I’m switching back to SELL. The Nasdaq is trading in a precise pattern.

    For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Matthew Levy, CFA
    Stock Trading Strategist

  • Stocks Decline, More May be Coming

    January 18, 2021, 3:02 PM

    We’ve reached a very critical juncture in the markets. Last week, I mentioned how this reminded me of the Q4 2018 pullback (read my story here), and still maintain that there is way too much complacency in this market. Stock markets are risky for a reason, something many Robinhood traders are sure to find out this year.

    My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth. Hopefully, you’ll find the below enlightening from my perspective, and I welcome your thoughts and questions.

    Stocks closed the week with their first weekly declines in nearly a month.

    The pullbacks weren't anything astronomical, but it could potentially be the start of the Q1 declines that I have been predicting.

    For one, valuations are insane, and the tech IPO market is looking like clown school. The S&P 500 is trading near its highest forward P/E ratio since 2000, while the Russell 2000 has never traded this high above its 200-day moving average.

    Signs are starting to point towards the return of inflation by mid-year as well. As the 10-year yield ticked up to its highest level since March, economist Mohammed El-Erian said “if we were to see another 20 basis point move in yields, that would be bad news.”

    Expectations haven’t been this high for inflation in years either. According to Edward Jones, the 10-year breakeven rate hit its highest level since 2018 last week due to rising commodity prices, a weaker dollar, and broad stimulus policy. The 10-year breakeven rate is a market-based measure of inflation expectations.

    What’s also concerning is that investors didn’t seem to bat an eye at Joe Biden’s $1.9 trillion stimulus package!

    What does this tell me?

    That maybe this was anticipated and priced in already. According to Jim Cramer on his Mad Money show on CNBC, “When an event occurs and the market gets exactly what it wants, but nothing more, it’s treated as a reason to sell, not to buy.”

    Although this week's decline was moderate, I still feel that a correction between now and the end of Q1 2020 is likely amidst a tug of war between good news and bad news.

    Generally, corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). The last time we saw one was in March 2020, so we could be well overdue.

    Corrections are healthy market behavior and could be an excellent buying opportunity for what should be a great second half of the year.

    Therefore, to sum it up:

    While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.

    I hope everyone has a great day. Best of luck, and happy trading!

    Time to Wager - Is the Dow Over/Under 31,000 Before the End of January?

    Figure 1- Dow Jones Industrial Average $INDU

    Is it possible to choose "push" on this gamble?

    I have too many short-term questions and concerns about the Dow Jones to unequivocally say it's overheated like the Russell or tech IPOs, or if it's at the right buying level.

    Although the Dow's RSI is comparable to the Nasdaq's on the surface, it has also not exceeded overbought levels as much.

    I do like the Dow's decline this week. But I'd like to see a more profound dip before buying back in.

    If someone wanted to make an over/under bet with me on the Dow's 31,000 level by the end of January, the truth is I'd probably choose "push." You'd have better luck betting on the AFC Championship game this year (but only if Mahomes plays).

    I don't like how COVID-19 is trending (who does?), I am disappointed in the vaccine roll-out (although it's improving), and I am concerned about short-term economic and political headwinds. But I think it's more likely than not that the Dow hovers around 31,000 by month's end rather than make any significant move upwards or downwards. It is very hard right now to make a conviction call on this index.

    If and when there is a drop in the index, it probably won't be anything like we saw back in March 2020.

    While a 35,000 call to close out 2021 is a bit aggressive, the second half of 2021 could show robust gains for the index once vaccines are available to the general public.

    With so much uncertainty, the call on the Dow stays a HOLD. I am closely monitoring the RSI if it exceeds 70.

    For an ETF that looks to directly correlate with the Dow's performance, the SPDR Dow Jones ETF (DIA) is a strong option.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Matthew Levy, CFA
    Stock Trading Strategist

  • Stocks Decline - Don’t get Caught

    January 15, 2021, 9:22 AM

    This market reminds me of the days leading up to Christmas Eve 2018. For those who don’t remember, it was a pretty dark day for those trading in financial markets.

    I was in the office, alone, and felt particularly responsible for my clients that day. You see, since October of that year, markets had been in a tailspin lower.

    “Fundamentals look good, add some exposure to equities here” I found myself saying, more than once. And just when I thought I would get a break, have a half day in the markets, and take a couple days off - boom. Markets fell 2 to 3 percent on the day.

    I still remember the feeling, it was like a gut punch. We were unprepared and had added more equity exposure for most of our clients in the prior few weeks. My boss was furious, as I was responsible for allocating hundreds of millions of dollars and we were having our worst quarter ever. I vowed to never be caught unprepared and foolhardy about markets ever again after that quarter.

    It was a great lesson, and one that allowed me to flourish in 2020. While I did not foresee a global pandemic, back in January of 2020, things were looking eerily similar to 2018. Markets were frothy, and it appeared that no downside was possible. And I cut exposure for my family assets significantly.

    That allowed me to avoid the worst of the pullback, and in March, with an eye on the long run, I took my family assets and picked up several companies at mouth watering valuations, some we hadn’t seen in years.

    So far, so good. My old boss would have been pleased - not that it matters…

    And now? Well. We’re falling into the same song and dance lately, aren’t we. I have some tips below for those interested, and if you want to know how my personal portfolios have performed, slip into my DMs.

    My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra high net worth. Hopefully, you’ll find the below enlightening from my perspective, and I welcome your thoughts and questions.

    Although stocks closed mildly lower on Thursday (Jan. 14), stocks have overall had a strong start to 2021.

    Be that as it may, I am still concerned about overheated valuations for stocks and the return of inflation. The S&P 500 is trading at its highest forward P/E ratio since 2000, and the 10-year treasury is at its highest level since March. The Russell 2000 is also up over 37% from its 200-day moving average for the first time in its history.

    Overvalued stocks combined with inflation returning by mid-year is quite concerning for me. I feel that a correction between now and the end of Q1 2020 is likely.

    I like how economist Mohammed El-Erian described the market as a “rational bubble.” But he did caution against four major risks that could cause a downturn.

    The first two risks, and the least likely are the Fed pulling back on monetary stimulus and the potential for corporate bankruptcies. As Fed Chair Jay Powell said himself Thursday though, (Jan. 14) “be careful not to exit too early,”

    The last two risks could be riskier.

    The first is “some sort of market accident” akin to the dot-com bubble popping in 1999. THIS is what concerns me most right now. The IPO market is simply absurd right now. The DoorDash (DASH) and AirBnB (ABNB) IPOs were ridiculous, and other IPOs are looking more and more like a circus. Lender Affirm went public on Wednesday (Jan. 13) and nearly doubled. Shares of Poshmark also surged more than 130% in its debut Thursday (Jan. 14).

    The other risk is the bond market and its effect on inflation. According to El-Erian, “If we were to see another 20 basis point move in yields, that would be bad news.”

    Despite my concerns, it is clear to me that investors are loving the potential for a $1.9 trillion stimulus package under President-elect Biden.

    Although a short-term tug of war between good news and bad news could continue, it seems to me that investors (for now) would just prefer to ride this out for what could be a strong second half of the year. According to CNBC’s Jim Cramer, there appears to be a lack of “people willing to sell”.

    Be that as it may, jobless claims surged to their highest levels since August, and the pandemic is still out of control. According to Goldman Sachs’ Chief Economist Jan Hatzius, U.S. stocks and bond markets could possibly “take more of a breather” in the near term.

    Generally, corrections are healthy, good for markets, and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). Because we haven’t seen a correction since March 2020, we could be well overdue.

    This is healthy market behavior and could be a very good buying opportunity for what should be a great second half of the year.

    The consensus is that 2021 could be a strong year for stocks. According to a CNBC survey which polled more than 100 chief investment officers and portfolio managers, two-thirds of respondents said the Dow Jones will most likely finish 2021 at 35,000, while five percent also said that the index could climb to 40,000.

    Therefore, to sum it up:

    While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. I don’t think that a correction above ~20% leading to a bear market will happen.

    Hope everyone has a great day. Best of luck, and happy trading!

    S&P 500’s Valuation is its Highest in Years

    Figure 1- S&P 500 Large Cap Index $SPX

    Conventional wisdom would tell you that the S&P had overheated and valuations are crazy. The index’s forward P/E ratio is the highest it’s been in two decades.

    But did you just see JP Morgan’s (JPM) earnings report?

    Wow.

    The big bank crushed both top and bottom line estimates, and saw a net income growth of 42% from a year ago.

    But look deeper into the earnings call, and there are some things to worry about. JP Morgan reported a net benefit of $1.89 billion in credit reserves and is maintaining a reserve topping $30 billion.

    Why is this worrying? According to CEO Jamie Dimon, this is because of “significant near term uncertainty” due to the pandemic.

    Dimon further added that despite vaccine and stimulus-related optimism, JP Morgan is holding onto these reserves in order to “withstand an economic environment far worse than the current base forecast by most economists.”

    That’s a bit troubling.

    The S&P 500 has been trading in a streaky matter as of late and reflects the broader tug-of-war between good news and bad. The index seemingly goes on multiple day winning streaks and losing streaks on a weekly basis. After seeing its worst sell-off since October last Monday (Jan. 4), for example, it went on a four-day win streak and broke past 3800.

    We are now back below 3800. Although I always cheer stocks going up and hitting records, I want buying opportunities. I would like to see a drop to around 3600 or below before making a BUY call for the long-term.

    For now, my near-term outlook is murky. A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am calling the S&P a HOLD. I would like to see a sharp correction before initiating S&P exposure at a discount. There is clear upside for the second half of 2021, but I would just prefer to maximize the upside from a lower level.

    For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Matthew Levy, CFA
    Stock Trading Strategist

  • Mild Rally Continues

    January 13, 2021, 10:32 AM

    Have you ever had a stock that's so far in the green that you’d never sell it? Rolling with “House Money?”

    My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth. Hopefully, you’ll find the below enlightening from my perspective, and I welcome your thoughts and questions.

    We are now firmly in the second week of 2021. After markets declined to start the week, we saw a muted recovery on Tuesday (Jan. 12).

    With Democrats gaining full control of both the legislative and executive branches of the government, the prospect of further stimulus has sent stocks soaring to their highest valuations in years. However, the short-term tug of war between good news and bad news will continue.

    I am especially concerned about overstretched valuations for stocks combined with the return of inflation.

    The S&P 500 is trading at its highest forward P/E ratio since 2000, and the 10-year treasury is at its highest level since March. Overvalued stocks combined with inflation returning by mid-year is quite concerning for me. I feel that a correction between now and the end of Q1 2020 is likely.

    According to Goldman Sachs’ Chief Economist Jan Hatzius, U.S. stocks and bond markets could possibly “take more of a breather” in the near term. National Securities’ chief market strategist Art Hogan also believes that we could see a 5%-8% pullback by the end of this month.

    Generally, corrections are healthy, good for markets, and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017). Because we haven’t seen a correction since March 2020, we could be well overdue.

    This is healthy market behavior and could be a very good buying opportunity for what should be a great second half of the year.

    While there will certainly be short-term bumps in the road, I love the outlook in the mid-term and long-term once the growing pains of rolling out vaccines stabilize.

    The consensus is that 2021 could be a strong year for stocks. According to a CNBC survey which polled more than 100 chief investment officers and portfolio managers, two-thirds of respondents said the Dow Jones will most likely finish 2021 at 35,000, while five percent also said that the index could climb to 40,000.

    Therefore, to sum it up:

    While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is very possible. I don’t think that a correction above ~20% leading to a bear market will happen.

    House money is fun to play with, but trust me - you won’t feel as well if you let it ride through a full correction without taking profits.

    Best of luck, and happy trading!

    The Nasdaq’s RSI is Back Below 70...Where Does it Go from Here?

    Figure 1- Nasdaq Composite Index $COMP

    I am staying with the theme of using the RSI to judge how to call the Nasdaq. While an overbought RSI does not automatically mean a trend reversal, with the Nasdaq, I always keep a close eye on this.

    I initially changed my short-term call on the Nasdaq from a SELL to a HOLD on January 5. I liked the Nasdaq’s declines to start 2021, especially after overheating. The RSI was no longer overbought as well.

    After changing the call back to a SELL on January 11th, the Nasdaq declined 1.45%.

    Over the last several weeks, this has been a consistent pattern for the Nasdaq. The Nasdaq pulled back on December 9th after it exceeded an RSI of 70, and briefly pulled back again after passing 70 again three weeks ago. We exceeded a 70 RSI again before the new year, and what happened on the first trading day of 2021? A decline of 1.47%.

    Tech can rally at any time and witness a plunge at any time. Truly, this sector could move sideways before seeing a correction sooner rather than later.

    Although there are also tailwinds for tech, they are specific to subsectors. Do what you can to find tech sub-sectors that are innovating, disrupting, and changing our world.

    I am especially bullish on cloud computing, e-commerce, and fintech.

    The Nasdaq is no longer overbought, and its RSI is now hovering around 64. I like this level more as a HOLD, but I still feel that it has overheated in the short-term.

    I am generally optimistic and bullish for 2021, but I would like a pullback closer to the 50-day moving average before considering buying back in.

    I also have some concerns with the Democrats winning Senate control, and its potential consequences for tech. It may not happen in 2021, but a Democrat-controlled Congress could raise taxes and further regulate high growth companies.

    Additionally, love him or hate him, the censorship of President Trump across social media platforms raises questions about what constitutes free speech, and if Big Tech has too much power.

    Because the RSI is back in HOLD territory, I’m switching my call again from SELL back to HOLD.

    If the RSI ticks back up above 70, I’m switching back to SELL. The Nasdaq is trading in a clear pattern.

    Do not let anyone tell you “this time is different” if fears of the dot-com bubble are discussed. History repeats itself, especially in markets. I have many concerns about tech valuations and their astoundingly inflated levels. The recent IPOs of DoorDash (DASH) and AirBnB (ABNB) reflect this.

    For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.

    Thank you for reading today’s free analysis. If you would like to receive daily premium follow-ups, I encourage you to sign up for my Stock Trading Alerts to also benefit from the trading action described - the moment it happens. The full analysis includes more details about current positions and levels to watch before deciding to open any new ones or where to close existing ones.

    Thank you.

    Matthew Levy, CFA
    Stock Trading Strategist

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