1/6/2021 Market Analysis

2021, Jan 06    

README

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General Market commentary

SPX

Demoratic won the senate runoffs today. Market initially rallied due to eliminated runoffs uncertainty. However it later retraced half of the gains due to this news: Trump supporters storm Capitol. As predicted in yesterday’s market analysis, renewable energy, infrastructure and cannabis EXPLODED! For example, SPWR(renewable energy) closed +20%. URI(infrastructure) closed +9%. TLRY(cannabis) closed +13%. Well positioned readers can secure some profits if you are playing short term speculation.

Quantative market model signal

  1. Midterm trend: neutral (upgraded to neutral)

  2. Midterm risk: high (we have been alerted this risk for weeks!!!)

Featured charts

UST10Y U.S. 10-year treasury note rose above 1% for the first time since last March’s COVID crash. The rise in bond yield indicates the market is indeed anticipating a big stimulus package following Democratic party sweep. However, a 1% yield is a ridiculous return right now. In this current market condition, no retail investor should own treasuries. A simple alternative is to park your sitting cash into some SPAC plays close to its floor price and sell it on merger news. This way, your reward/risk ratio really only depends on how close you can buy those shares from their floor prices.