The Weekly Selection: 2/2/2025
124: Pandemonium in DC
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, take a look at DeepSeek or Deep End? posted last week. This is the most recent deep dive research piece. Additionally, check out the latest Podcast at the link below.
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Indexes
Markets have seen a considerable amount of volatility over the last few weeks since Donald Trump took office. This is to be expected, as Trump is notorious for shaking the metaphorical tree. While this makes the trading environment difficult, it also in a way makes it easier to identify what is truly strong and what is simply getting tossed around with everything else. Lets take a look at the indexes below:
SPY 0.00%↑ first, with the volatility really building underneath $610. I think until we can breach that level there will not be a clear breakaway and run for major indexes and individual groups.
XLI 0.00%↑ Industrials are really starting to shape up, which is something that was discussed on the podcast this week. Trump is looking to bring manufacturing back to the US, and apply heavy tariffs to foreign nations, which may give manufacturers larger margins via increasing prices on consumers.
GLD 0.00%↑ was a trade that I thought was over after Trump took office, as global conflict was expected to subside. This, coupled with AI competition, the aforementioned tariffs and general Trump behavior has actually caused more uncertainty, pushing gold to all time highs.
Parabolic Trend Analysis
$SFM Sprouts farmers market is certainly one not many of you expected to see here, but their new initiatives, supply chain improvements, and acceleration location growth has made this stock one of the darlings of the year.
I mean this chart rivals even $ANF monster run from recent with essentially no sma crossbacks, not a single touch of the 50sma until the end of the year, and near perfect earnings thrusts throughout the sessions. Truly a beast.
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Upcoming Themes
With the pandemonium in The White House, finding themes with staying power right now is not easy. That said, some are showing clear direction that is not being shared across the board. Lets dive in:
CYBERSECURITY: CRWD 0.00%↑ CIBR 0.00%↑ CYBR 0.00%↑ FTNT 0.00%↑
CRWD 0.00%↑ displayed above, pushing to all time highs, despite malfunctions earlier last year X was sure would take years to undo, weird! If this base builds out a bit more it will look great for an entry.
BITCOIN: $BTCUSD BITX 0.00%↑ IBIT 0.00%↑
Bitcoin pulling back into the 100k support, presenting a moderately low risk entry.
POWER: VST 0.00%↑ VRT 0.00%↑ CEG 0.00%↑ NRG 0.00%↑ GEV 0.00%↑
Many of the IPP/Power names traded down to start the week with the introduction of DeepSeek, however that event if anything is a suggestion that these stocks will go higher as the US bolsters the grid.
SPACE: RKLB 0.00%↑ RDW 0.00%↑ LUNR 0.00%↑ ASTS 0.00%↑ DXYZ 0.00%↑
If you’ve been reading a while, you know that RKLB and the space theme is a favorite of mine. These names are getting tremendous support with Elon musk in such close proximity to the white house. RKLB has been tricky to enter, however its known for explosive moves, and should not be ignored.
With volatility rising, it is important to note the relative strength. To help with this I made a video on twitter describing what I look for as I scan in an uncertain market. Check it out HERE, and see you Thursday for a new article.