We are more than a year into the biggest pandemic in 100 years. What is interesting for us investors is the booming market. Some would think a crisis like a pandemic would be a disaster for the markets. On the contrary we have seen one of the strongest rallies I have seen.
Here you have the two year chart of the technology index Nasdaq. As you can see up around 100% since the bottom of the pandemic. Strong GDP growth under the rally has been driving this market nearly out of proportions. I have never seen a doubling of the market in little more than a year before.
But what now, the market seems to have some resistance little above the 14,000 level. Is this weakness, are we eager to take profits in this situation. Taking profits I think is the key word here, it seems some taking gains at these levels.
This time in June brokerages are trying to assess and analyze their way through the coming earnings in July. We will from now on see what Wall Street has concluded. If they expect strong earnings we will see my earnings season rally, elaborated in earlier blogs.
So this time it is for the wise investor to analyze if there will be an earnings season rally or not, buy in if the rally starts is my take.
In this blog I would like to focus a bit on commodities like gold and oil. Let me start with oil. Earlier on this blog I have lined up a framework how to play the oil price based on the setting around OPEC meetings.
In November I was asked on Twitter on my take on oil. I hinted for my followers to check out my prior OPEC blogs. To make it easy for you I may recap my main points from these blogs. My advice has been to take a position if oil started to rally around these meetings. I hope you make use of my oil strategy in the future.
Now it is your job to ride the bull and take profits when a new OPEC meeting makes oil tank.
When it comes to gold I view the metal sometimes to be a hedge against inflation. What we have seen lately a rally in gold up to the latest FED meeting and perhaps also till we got the latest US jobs report.
You can see this rally from April in this chart and the metal tanking since the latest jobs report. I have come to that Wall Street have started seeing the FED in control of inflation so the Street takes profit in gold. For you who follow me on Twitter have seen I was lucky with my trading watchlist where I leveled down on gold lately.
What about my latest top performers. I would like to bring up the biofuel Aemetis which has rallied all the way to No. 10 on Wall Street this year, in April it rallied all the way to No. 2 with a close to 1,000 % return. My take on the stock now, see if the present bounce continues. Biofuels with a future now with the green Biden administration.
When it comes to my latest find, SemiLeds which is almost top 10 as well. Look for the the continuation of the rally. It has somewhat taken a break in its rally some profit taking it seems. But this a stock to still have in your interest since this the best semiconductor this year. Semiconductors under good market conditions cause of a general market shortage. Let us see how well it may perform.
What counts for all my advice with very volatile stocks always trade with a trailing stop loss, this wise to keep all your nice returns.
Good luck with your trading.