Bitcoin All Time Highs, Tesla Sidelined, Industrials Cookin'
145: The Weekly Selection
Introduction
Investors,
Welcome back to another iteration of ‘The Weekly Selection’, where I cover my thoughts on the market, what’s upcoming and some other little nuggets for your enjoyment.
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Indices
Last week markets chopped around a bit as dust settled on overheated sectors, and less discussed sectors rotated in. SPY 0.00%↑ is pretty heavily weighed by its tech holdings, so naturally when XLK (tech specific ETF) is down, SPY struggles.
In the case of last week, nearly every sector besides tech and communications turned green, showing that despite tech’s lack of participation, the rotation was on and other groups picked up the slack. The industrial/manufacturing group was the top performing of the lot, as I believe the cyclical rotation to be on for them as markets prepare for cuts and bills from the new administration in support.
SPY 0.00%↑ Chart above: As we can see, a nice consolidation at the all time highs heading into the week, with the 10sma just underneath last closing price.
Crypto took no breaks last week, with BTC pushing out to all time highs with ease, seen above. My exposure to this move is BITX, a 2x leveraged ETF that tracks Bitcoin. There a recent debate on BITX/IBIT or MSTR/MSTU for exposure to the move, but for me personally I think BITX is right choice for the purest exposure without all the theatrics MSTR brings to the table.
Our physical commodity, gold is also shaping up nicely, with a large range to break around $3400.
All in all, most of what I usually track is acting well, and I’m not noticing anything immediately that jumps out to me as a red flag. The political situation, war fears and economic decline headlines have subsided worldwide, which I think is a short term plus that will make its way back to the front pages in due time.
Looking Forward
In the upcoming week I’d like to be a bit more patient with entries and try to focus on some of the themes that I’ve been mentioning but neglecting. These include industrials, drones, and homeland security. I think all of these themes are tremendous, however I’ve been distracted lately trading the stock of the day, which generally leads to failure to be convicted in an opportunity, and therefore a mismanagement of the trade. The playbook is in front of us, now its just a matter of reading it.
Electric Utilities and related: GEV VST VRT CEG NRG PWR
Above is GEV 0.00%↑, trading right back to ATH. The interesting thing about the electric utilities and IPP companies is from April lows, they have traded equal gains to the biggest tech winners. To me this is a sign there is huge institutional interest driving what has historically been a boring business to new highs.
Drones: ONDS AVAV AIRO
The drones theme got some positive press on Friday with U.S. Defense secretary Pete Hegseth’s directive to surge military drone production and eliminate regulatory hurdles. AIRO, seen above is my favorite of the group until Anduril goes public. Its a new IPO, and obvious price reacted well to that news - now it just needs some volume.
Space: RKLB ASTS RDW
ASTS and the rest of the space theme has been hot lately. What I like about this theme is how unimpacted it was by bearish Elon news, showing that regardless of his involvement in government, the demand for space exploration and systems development is there. ASTS, shown above, is best in class working on a 4 weeks tight this upcoming week. Tremendous look.
That’s all ive got for you this week!
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