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Coiled Springs – Which Index to Play & BTC Bonus

Coiled Springs – Which Index to Play & BTC Bonus

by The Ticker

T’was a couple weeks before Christmas and all through the markets not an indices was safe from the rapidly changing environment.  Several recently have remarked that change is good as is certainty, whether in your political favor or not; it is how the change is interpreted and in this case the direction is obvious.

The recovery from March lows was brought to you by the NASDAQ, in particular AAPL, AMZN, FB, GOOG, NFLX, PYPL, TSLA and ZOOM to name but a few.  With the vaccine on its way, interest rates, already low potentially moving lower, the Dollar in what is essentially a repricing and oil inflating, the times they are a changing; make way for RTY, the Russell Index.

The NASDAQ, especially from most of the “big names” that led us out of one of the most diabolical corrections in recent memory, is under attack.  While a few of the bell weathers like AAPL and TSLA are essentially beating their own expanding market drums, growth rates for the likes of AMZN and ZOOM are being questioned with ZOOM being the target of industry “markdowns”.

The pattern of the laggard, the Russell Index, being the target of these funds fleeing the NASDAQ is nothing new.  Several times in the past this rotation is quite apparent.  The only difference now is that the stocks that comprise the RTY are as largely capitalized as was the stocks that made up the NASDAQ in years past.  LYFT, SBUX and GOOG competitor TTD to name but a few, are primed for growth especially given the economic environment spoken of above.  EV component stocks like APTV and CRNC are just getting started with several in the electric vehicle arena as well as in the 5G space being candidates for takeover.

In the past we’ve sorted through a couple commodity futures as we decided which offered the best opportunity for the upcoming period.  Given the change observed in the stocks we watch we chose to analyze the “usual” four indices, ES, NQ, RTY and YM this week.  What we observed confirms how the markets have acted in recent weeks; it’s time for additional gains in the Russell.

We’re still operating on the NinjaTrader platform as we rapidly move towards completion of our own standard platform with desktop and browser access.  If we have missed looking at other indices you are interested in send me an email at david@amstradinggroup.com and we’ll get them worked up for you.  In the interim get ready to jump on board the “AMS” train as we finish development of our platform with dual functional access.  Take it from me and everyone who is working with us on this project, it’s sensational.  We thank those of you who have commented giving us direction as to what you want to see.  For additional information about our platform and to sign up to test with us as we “beta” the platform just send Niels an email at niels@amstradinggroup.com and we’ll welcome you on board

But first take a look at the Composite charts we have provided on the ES, NQ, RTY and YM.  We’ve used our standard time based 30 Minute, Daily, Weekly and Monthly charts for this discussion and we trust what’s presented verifies that’s it’s time for all of the indices to uncoil their pent-up springs with the “small” cap Russell leading the way.

ES – Standard & Poors

ES – 30 Minute – Composite Profile
ES – Daily – Composite Profile
ES – Weekly – Composite Profile
ES – Monthly – Composite Profile

With the Dollar falling, interest rates at worst remaining at historically low levels, oil regaining its “groove” and more, the ES is looking to go higher.

NQ – Nasdaq

NQ – 30 Minute – Composite Profile
NQ – Daily – Composite Profile
NQ – Weekly – Composite Profile
NQ – Monthly – Composite Profile

It doesn’t take a rocket scientist to see that the NASDAQ is going to take a back seat to the other three indices examined.  That drop last week was real, its recovery was weak, unlike NASDAQ rebounds of the past nine months and the rotation discussed above is just getting started.

RTY – Russell

RTY – 30 Minute – Composite Profile
RTY – Daily – Composite Profile
RTY – Weekly – Composite Profile
RTY – Monthly – Composite Profile

Hey folks, if I told you that the Russell’s barely above its highs of 2018 you might be surprised but that’s exactly where it’s positioned.  Put that together with the Russell being up more than 30% over the last six weeks you have what we call a “change in leadership”.  Just like the decline that’s just begun in the NASDAQ stocks, as has occurred several times in the past, invested capital is heading for the Russell; enjoy the ride.

YM – Dow Jones

YM – 30 Minute – Composite Profile
YM – Daily – Composite Profile
YM – Weekly – Composite Profile
YM – Monthly – Composite Profile

The Dow Jones, the index with the smallest number of securities, took quite a while to recovery and reach historic levels.  Economic uncertainties remain within the financial services sectors.  Remember the US is really the only regional market susceptible to another decrease in interest rates.  If rates go negative in the US markets how these stocks will react remains uncertain.

 

Being a follower of John Naisbitt, author of “Megatrends (1982)”, one of my theories about which investments to select revolves around the sheer number of articles currently in circulation about the underlying entity.  Bitcoin is blowing up when it comes to what’s out there to read.  PayPal and other “fintech” related entities have made it possible to buy fractional pieces of Bitcoin.  What is interesting to note however is that although you can “buy”, essentially go “long” Bitcoin you cannot initiate a similar “sell” or “short” position.  Think about it, with the ability to enter being a “one-way street” the obvious movement should be on the long, upside price side of the market.

Major insurance companies are stepping up buying a billion dollars worth or more of Bitcoin with many other investment entities to follow.  PayPal announced this week that Tink, a fintech that will enable even more rapid growth of these “new” currencies, received additional investments from some very distinguished private equity participants. https://www.cnbc.com/2020/12/11/paypal-backed-fintech-firm-tink-boosts-valuation-in-new-funding-round.html

To “coin” an old phrase, “the times they are a changing”; change is good if you are on the right side of it.

BTC – Bitcoin

BTC – 30 Minute – Composite Profile
BTC – Daily – Composite Profile
BTC – Weekly – Composite Profile
BTC – Monthly – Composite Profile

So there you have it.  There’s much more to the AMS Trading Group’s platform than Zone Decoder.  Composite Profiles, when used as above, lets you see the “big picture” whether for the last couple days or last couple years.  It’s a tool for those of you who are position traders like me as well.  In addition, together with Niels, we’re building more than just a trading platform as evidenced by articles like these by “The Ticker”, that’s me.

We are going to move to our own platform in the next couple months.  In the interim, we’re going to regularly publish articles of this nature that through our other partners will soon expand its media base with Zoom webinars and more.  After more than 50+ years it was time for me to start giving back.  Have an idea about what the next topic should be email me at david@amstradinggroup.com and thanks for your interest.

Thanks always for your support and in this case the heads up to check out Orange Juice.

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