Hey guys, Welcome to your Money Link weekly review.
Today, instead of our usual video, I'll be giving you a report on how our positions are holding up.
We started Monday with a whiff of panic, but the market just did it’s usual routine of rebounding all week as earnings came in solid. I still expect there will be bouts of volatility for the rest of this summer and into the fall — where I expect a lot of chaos in the markets. Having Money Links will provide a great hedge against all of that risk-on and risk-off uncertainty…
So, let’s dive in and take a look at our positions
SWING TRADES:
SPY/EEM
We’re back at 1-year highs in this link as the Emerging Markets continue to lag. I expect the deep selling pressure to come from abroad, and as a result of the strong, we could have a real double digit move here in short order.
XLF/TLT
I don’t normally issue trades after the market opens, but my indicators were on fire during the open on Tuesday and I didn’t hesitate to pull the trigger on entering the XLF/TLT Money Link. You see, the yields on long duration bonds had made a flash low, and I love to enter positions in those scenarios.
Just look at this chart of the 10-year yield: You can see the low on 7/20, which is when we went into the trade…
CORE PORTFOLIO POSITIONS:
DVN/AAL
This is probably our worst performer for the week, but I still fully believe in this Money Link, as we still have two major catalysts to make this work.
- The Delta variant will loom over American Airlines the rest of this summer.
- Crude Oil is still in a bull uptrend and the stocks like Devon are lagging in a major way. A huge squeeze in this stock would occur soon if Oil climbs back to year highs, which it’s in striking distance of this morning.
JPM/HSBC
Even as yields broker lower and bank stocks got whacked, JPM outperformed HSBC as the risks in Honk Kong remain high. It’s always the sign of a really good Money Link when you’re profitable with whatever the markets decide to do. I feel really good about this trade.
ETSY/BBBY
This Money Link is looking like it has the potential to be a real home run. ETSY is breaking out back above 200, and again, we timed in very nicely. The stay-at-home stock phenomenon that occurred during the initial COVID-19 days is back. ETSY was a big winner then and should be a big winner now. Brick-and-Mortar stores like BBBY could have a serious headwind as well, should people become more reclusive once again.
LFG!