These 4 Names Became the Risk-Off Bet
This afternoon’s breaking news: the Fed hikes another 25 basis points, with plans for one more hike this year, and then it’s taking its foot off the gas.
In short, it’s about the banks and the latest disaster they’ve brought us to the brink of.
But there’s another troubling undercurrent to watch out for as an investor and to trade as a trader…
Remember when tech just couldn’t fail?
For years at a time, the biggest names in the industry – Microsoft, Google, Amazon, Apple – could only go higher and higher and higher.
And then, WHAM! Pandemic.
But, just like the banks, apparently, some lessons are just too hard to learn because the numbers I’m watching this week in big money flow tell me that we are once again in the majorly overbought territory in the tech giants.
Maybe it’s unfair to say investors are repeating their pre-pandemic tech mistakes. It’s more like they just have nowhere safe to go anymore. They don’t want to sit on the sidelines anymore. They don’t want to get crushed by market volatility. So when things look scary – like the recent collapse of SVB, they run to safety.
Today’s new safe haven may surprise you…
Safety has become Big Tech.
In fact, you could argue that Big Tech has become the market, considering that where these behemoths go, so goes the overall market. The Invesco QQQ… what we affectionately call the Qs… is one of the favored ETFs to trade these days.
Did you know that, with just 100 stocks in its portfolio, more than half of its total market cap is a result of Apple, Microsoft, Google, and Tesla?
As traders, how are we going to handle this situation?
Well, for starters, keep an eye on the Russel 2000, Microsoft, Google, and Intel. And by “keep an eye on them,” I mean, expect them to go down.
On the other hand, let’s look to OXY for a chance to nudge upward.
I’ll keep you updated on this situation during our live Profit Takeover shows during the week.
In the meantime, I’ll keep my eye on big money flow and let you know where the next opportunities lie.
Trade the money flow. Leave investing to the birds.
Until next time,
March 22 2023
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