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
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.
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:
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.
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.
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.