The Weekly Selection: 12/15/2024

Vol. 118: Santa Rally!

Dec 15, 2024

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.

Before we begin, get active on the rest of my socials:

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Indices

Most of the market cooled last week, as we saw ‘breadth’ decline and under the hood health weaken. Depending on how you invest, or trade, this might matter a lot or a little. To me, this does not matter all that much. While I like to keep an eye on macro happenings, to make better decisions with what I have, in the long run hyper-focusing on short term health gauges and oscillators has not been impactful on my equity curve.

Additionally, as discussed in past newsletters, we are now above the 3rd pivot from the main base break back in September. The trading usually gets a little more difficult around here, and this is generally when you start seeing more discussion about ‘froth’ in the market. Froth in short is how many describe the simple concept of prices > value caused by heightened demand.

Lets get into the index charts for the week:

SPY 0.00%↑: Up first, the primary index. As we can observe, the action is still healthy, despite headlines and conversations in forums/groups. I will continue to remain active in this environment, operating with tighter stops and closer targets to better protect risk, while also being active enough to spot the change in character when it comes. Leaders are still leading after all.

RSP 0.00%↑: RSP has seen quite a tumble from highs, displaying the weakening under the hood I discussed in the introduction. This action, while near term surprising, isn’t indicative of a change in trend for the market.

Parabolic Trend Analysis

$TSLA has experienced quite a turnaround since last year, where it severely underperformed broad markets, with many speculating the Elon hype was dead, and traditional vehicle manufacturers would reign supreme. Since then, $TSLA has returned 200%, making it one of the biggest mega cap runs in such a short period of time.

The primary drivers for this run have been: a supportive market, technological developments, charismatic brand and leadership, proximity to power, and efficiency improvements. Similar to how we saw the Oil industry react to Dick Cheney in the white house in the early 2000s, I think its fair to assume $TSLA and related Elon businesses are going to be positively impacted by this proximity to Trump. Additionally, its important to note that in my study of large stock runs, the ones that are stimulated by the government run the furthest, the fastest.

*This portion of the newsletter takes considerable time in researching the stocks and why they ran. If you enjoyed, consider liking this post and sharing with a friend.*

Upcoming Themes

I am watching all of the same themes as last week. There really isn’t any reason to shift focus, as the momentum has been very stable in a few key themes. I think with underlying market health deteriorating, its important to note where the money is going, and following it. Lets take another look:

QUANTUM COMPUTING: RGTI 0.00%↑ QUBT 0.00%↑ QBTS 0.00%↑ IONQ 0.00%↑

QBTS 0.00%↑ displaying strong respect of the 10sma and extreme momentum. Getting a low risk entry on this will be crucial. Using the blue pivot or an ATH will be my method.

AIR TAXIS: JOBY 0.00%↑ ACHR 0.00%↑

Archer Aviation with its first breakout post large range break. JOBY is testing its 20 SMA right now.

IPOS: RDDT 0.00%↑ ALAB 0.00%↑ RBRK 0.00%↑ TEM 0.00%↑

RDDT 0.00%↑ is one of the market leaders at this point. Wild thing to say, but it is. It put in a strong VCP IPO base, and has since made an episodic pivot and rally. Incredible.

Semler Scientific is a sneaky monster. It has a market cap 1% the size of MSTR, but is doing the same thing, and can trade at a higher premium because the underlying business is actually profitable.

TRUMP TRADES: DJT 0.00%↑ GEO 0.00%↑ AXON 0.00%↑ BYRN 0.00%↑ TSLA 0.00%↑ PLTR 0.00%↑ DXYZ 0.00%↑ RKLB 0.00%↑

TSLA 0.00%↑ is on an absolute heater after the election. Having close proximity to power has historically been a large benefactor on price increases.

That’s all for this week. If you enjoyed, consider reading another article HERE

Don’t forget to like this post, and share with a friend!

See you next week.

SEBS

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