When even Dale Pinkert is lost for words about how to describe the market, you know it’s been a crazy week. “This market is very difficult to describe in words,” he said, “so I thought I’d attempt it in song.”
Here you go:
TECH REBOUND… BUT WHY?
Most of this week was a week to forget for tech stocks, but they staged a strong comeback yesterday (Friday).
“I don’t know what sparked it [the comeback],” Dale said. “I don’t know what the catalyst could be that turned the market for it to just open higher and really run.”
NVIDIA had its best day since April last year:
“There was no reversal,” Dale said. “You don’t just sit a breakdown and gap higher unless there’s earnings… In the stock market, I think there is definitely a national interest for it to go higher.”
As for the S&P, Dale said it looks like it’s just “a stone’s throw away” from making a new high. “Another day like this and we’re there. We could be 7,100 next week.” However, he doesn’t think that new high will confirm.
Meanwhile, the Dow closed above 50,000 for the first time ever yesterday:
“When people buy Dow stocks, there’s almost a bearish tint to it because they want to be in the most liquid, blue-chip, risk-averse stocks,” Dale said.
Elsewhere, Dale thinks IWM “looks like it can make a new high,” while the NASDAQ “may have juice for a few weeks” but the NASDAQ is still a long way off its ATHs.
FOLLOW THROUGH ON MONDAY?
Who knows, is the short answer. “I’ll be reacting,” Dale said. “I’ll be reacting instead of predicting the opening. But normally when you have a strong close on Friday you get follow through on Monday, and then there’s a probability for that move to end. They call it turnaround Tuesday.”
💡A caution from Dale: “You can’t treat the market as a market, even in the indexes there’s all kinds of bifurcation. You still have to be selective.”
WHAT DALE’S LOOKING AT THIS WEEK
Silver: Dale has been negative silver for a while, but is now looking to buy it. “I’ll be looking for a third drive to the bottom in silver. If we get a break in the next couple of weeks for one more low and the RSI stays above 30, I’m long, and would look for a rally back to $90 or $100.”
Bonds: TLT “got a nice lift yesterday and we’ve been holding support. They look good.” Add to that, Dale said yesterday’s rally in stocks would normally have seen bonds give up Thursday’s gains, but they didn’t: “I think that’s another clue about money being nervous.”
Crypto: Dale had been looking for Bitcoin to bottom around $67,000, but it actually briefly went below $61,000 this week, so “it went deeper than I thought it would go,” he said. Yesterday’s action “doesn’t completely reverse all the week’s losses, but it was a pretty powerful reversal.” Still, Dale doesn’t think this was the final low for BTC.
Dale “went for Ethereum” because it had a better RSI structure, and it’s back over the throwover line (highlighted in yellow, forgive the blurriness):
Cannabis: Among other cannabis stocks, Dale is long Curaleaf. “It’s been washed out enough,” he said. “I like the weekly signal on this, maybe it’s going to $8. I like the risk-reward.”
Oil: It’s a tougher trade now, Dale said, but he’s still giving crude the benefit of the doubt and is still long. He will be a buyer of breaks, and wrong under $58.
Elsewhere, Dale is still short on semis, looking to short the yen, and still long the US dollar.
SIT TIGHT
“The markets to me right now are a coin toss,” Dale said. “There’s no reason for me to take action [on new positions], because the intelligent thing to say is ‘I don’t know.’ If I don’t know, I don’t trade.”
And finally… “The only thing you can control is the risk you’re taking every time yo take a position,” he said. “Predetermine the risk, because the difference between pros and amateurs is that pros know how to lose.”
Thank you RF, Marvin Gardens, Etienne Delagrave, Louh1, and many others for tuning in live! We’ll be back Talking Markets on Monday With MI2 Partners’ Harry Melandri. And stay tuned tomorrow for a special edition of For the Record with Erik
Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.
