Encouraging Data: Bullish Week

MOTIVATION
Quote of the week

"The best investment you can make is in yourself. The more you learn, the more you earn."

-Warren Buffet-

Week 13/05/2024
What You Need to Know This Week

Last week, we had good CPI (Consumer Price Index) data, which provided a boost to the indices, leading to new highs for both SPX and QQQ.

It’s worth noting that this data wasn’t stellar. It was just "not so bad" and gave an initial indication of declining inflation, which could signal to the FED that it may be time to lower rates. Just imagine how much the market rallied on such news—there’s a strong optimism where even minimal positive data brings in buyers, sending the market into a bullish frenzy. If more good data comes in, just imagine...

There was a significant upward movement in MEME STOCKS, with GME and AMC rising over 200%, but they lost all momentum after Wednesday.

Strong Dollar: The DXY, which measures the dollar against six other currencies, has risen 4% so far in 2024. This makes travel cheaper for Americans, but it also impacts imports. In my opinion, it’s all about balance; it also facilitates U.S. companies investing abroad, which can lead to profits being repatriated back to the U.S.

Chevron is one of the heavily shorted large-cap assets.

The markets have dismissed the idea of a rate cut in June. September and November are now the months with the highest probability.

The year and the movement of stocks will be defined by two factors: rate cuts and the election year.

Could Mexico be a winner in the China-U.S. trade war?

BTC is rising alongside favorable data.

Retail sales came in unchanged when the expectation was for an increase. This indicates that consumers are tightening their belts, which helps relieve inflationary pressure.

ECONOMIC CALENDAR 13/05/2024
Economic Events

As we can see, there’s a week full of speeches from FOMC members, so we can expect high volatility, so be warned.

On Thursday, we have the jobless claims data, which is quite important for providing indications to the FED about whether to cut rates or not.

WEEKLY TECHNICAL ANALYSIS
Some Interesting Assets [Stocks and Cryptos]

Today, with earnings week, we’ll discuss the GAPs that opened and closed in some of the most traded stocks.

DKNG
DraftKings has been in an interesting bullish channel for quite some time, indicating that the $40 area is attractive. The weekly chart looks good, and the next resistance is around the $50 zone marked a few weeks ago.

CAT
Caterpillar looks interesting as well. After dropping to the 100-day moving average on the daily chart and touching the 20-week moving average on the weekly chart, it seems to be resuming its upward trend, with resistance zones at $367 and $382. I like how it looks.

ETH-USDT
Ethereum is encountering a slowdown alongside this widespread stock market rally, but I don’t find it convincing yet. While it has been showing strong rejection at the 20-week moving average (noted by the well-defined wicks on the candles from previous weeks when touching the yellow curve), if it indeed becomes a rejection zone, it could have a nice upward path ahead.

INTC

Another asset we mentioned last week that could look interesting has recovered timidly, but it could be worthwhile to see if it seeks to close the GAP formed around the $34 area, which coincides with the 9-week moving average (red line on the weekly chart).

AMD

AMD gave me a beautiful 10% return in 5 days, another asset I mentioned I would be watching in last week's email. I found the $140-150 range attractive, and I entered within that range. I’ve already exited, but I still see it as quite appealing for a re-entry when I notice another slowdown.

Which stock/crypto should we analyze next week?

YPF
I like it around the $21 mark, but there are some legal issues regarding expropriation, so I’m watching it cautiously. However, at that point, I find it attractive.

AMD
Although I mentioned it above, it looks interesting for another entry during a pullback. I’ll be watching it closely around its moving averages.

SPX
There are many news events next week, making it very difficult to predict how the market might react. The reality is that with even the slightest positive news, the market has rallied strongly. Would the same happen with negative news?
I don’t have a position here, as I want to see how it reacts to all the events next week.

Random
Random Fact of the Week

Did you know that koalas have fingerprints very similar to those of humans? So much so that even under a microscope, they can be difficult to distinguish from ours. This fact has complicated forensic investigations in Australia, where koala fingerprints have been confused with human ones at crime scenes.

Art
Ilustration of the week