Minerva Market View for Dec 7, 2023

Markets resumed their rally today. All eyes are on the jobs numbers tomorrow.

Good evening! The markets resumed their rally after the brief pause. All the indices and almost all sectors were up today, led by AI and semiconductors.

We continue to be in an uptrend and breadth is also strong. The most important dates and factors that can make or break the rally are the ones we highlighted in this chart from Factset earlier:

More than the actual numbers that get reported, we will be monitoring the market’s reaction to them because sometimes bad news can be interpreted as good, and vice versa.

Should the markets take off like they did today, we will plan on adding beta to increase our positioning by ~10% on each of these days. All additions, just like our current positions will be placed with tight stops to protect ourselves against reversals.

Here’s what Callie Cox of eToro has to say about market reactions to job days:

With that macro prelude out of the way, here’s how the technicals look:

The S&P bounced back today (although on lower volume than yesterday), and the dip in stochastics may prove to be short-lived if the rally continues.

The Nasdaq has a similar picture although it did bounce back on higher volume, aided by GOOGL, AMD, NVDA, and other tech stocks.

Market breadth continues to improve:

In terms of positioning, there are mixed messages, with some saying that investors have been piling in and are too bullish, and others like Seth Golden saying that sentiment is at record-low levels:

In any case, we will come to know soon enough and we will be ready to react.

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Portfolio and Performance

We had a good day today, with almost all positions up on the day. Luckily not too many of our stops got hit. For gainers, we are reporting just those with moves > +1%:

There were just a few losers today:

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Watchlist

For tomorrow, we will be looking at these tickers and add them based on price/volume action:

Long: FFIV 0.00%↑ AVAV 0.00%↑ INTU 0.00%↑ GE 0.00%↑ HWM 0.00%↑ RPD 0.00%↑ CRM 0.00%↑ JETS 0.00%↑ AMD 0.00%↑

Short: FLYW 0.00%↑ DO 0.00%↑ EWJ 0.00%↑

AVAV 0.00%↑ is interesting because it reported strong results and is in the defense sector (military drone manufacturer) but had a severely negative reaction:

Also worth reading: AVAV Stock Sinks Despite Higher AeroVironment Outlook As Military Drone Use Grows

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Worth checking out

Here’s the summary:

That’s all for now. Happy Trading!

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Disclaimer: This post is for professional investors only and is shared with other like-minded investors for the exchange of views and informational purposes only. Please see the disclosures and disclaimers for more details and always note, we may be entirely wrong and/or may change our mind at any time. This is NOT investment advice, please do your own due diligence.

Nothing in this newsletter is an offer to sell or to buy any security. The author is not responsible for any financial loss you may incur by acting on any information provided in this newsletter. Before making any investment decisions, talk to a financial advisor.

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