ARETE TUESDAY NEWSLETTER

The Hwang over is done? 😲🚀💰

May 12, 2021

Is the Hwang over finally done? The short answer is we do not know. What we do know is that it’s close. To start with we saw a massive reversal in tech today right off the bottom. Constant buying all day long. We saw earnings being rewarded for the first time in months. $RBLX had an amazing day. After hours tonight, $FUBO and $UPST are up big on solid earnings. This is in contrast to what we were seeing in the past 4-6 weeks. Stocks like $AMZN, $GOOGL,$AAPL were crushing earnings only to get punished by the market. Bank of America issued a note today that stated “ Hedge funds were net buyers for the first time in 6 weeks. after extreme selling by this group in recent weeks; meanwhile private clients were net sellers for the FIRST TIME since mid-Feb,” Simply put Institutions are buying technology names and retail is selling them.

We talked for the past two weeks about deleveraging. How funds had to deleverage and that $ARKK most likely would mark the bottom. Today $ARKK went into the mid-90s and reversed to close at $106 green on the day! We stated how this would mark a possible bottom because it would mean that hedge funds have finally deleveraged. Well, we have a clear indication that is done with.

Today Namora securities showed their report of leverage on CTA’s. For those that are not aware, a CTA is a commodity trading advisor. For simplicity, sake think of them as large institutional pools of capital. We saw the greatest deleveraging yesterday over 10 Billion in a day. See the graph below.

Add all of this together and yes we may have bottomed. We need to see if we hold key levels. Now the $XLE does look like a possible double top. Oil did not go up with tensions in the middle east. This is usually the reverse. Just like when good companies come out with earnings they usually go up now down. So this could suggest another sign we have bottomed. This does not mean to jump in both feet usually bottoms are tested so I would not be surprised to see the overall markets test support levels. That said overall I would start being a net buyer of beaten-down Nasdaq stock. Consider locking in profits on anything commodity-based. Lumber is down 11% in a day. Key Levels are marked on the charts The $QQQ provides the most upside now in my opinion.

Let’s look at our Indexes!

Let’s look at our Stocks!

You are going to see more stocks added shortly and new leaders emerge

Subscribe to YouTube! 👈Subscribe and turn on notifications. Below is a video of Tuesday’s stock market Tech Melt up! Tons of actionable ideas. Also, I walk through the importance of entering a stock correctly. Example of an after-hours entry on $FUBO Consider making these videos a daily part of your routine. If I go over the lessons from the trading of the pro series during them and point them out in real-time situations.

As always all investment decisions need to be made by the individual. We all have different risk profiles.No two people trade the same. Understand the buy points, stop losses, trims are suggestions. For example on stops. I want to see it close there at the end of the day.

You need to develop your own process. I am willing to help and offer feedback.

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