Tesla surges. Gold ATH and BTC as inflation hedge?

MOTIVATION
QUOTE OF THE WEEK

"Success usually comes to those who are too busy to be looking for it."
This week, the markets show signs of resilience, with optimism around rate cuts, strong labor data, and earnings momentum shaping the narrative.

WEEK 21/10/2024 to 25/10/2024
🚨What you need to know this week🚨

• Optimism on Borrowing Costs: Market sentiment is bolstered by expectations for reduced borrowing costs, strong labor market data, and positive earnings results.

• Gold Keeps Climbing: Gold prices are hitting new highs, with hedge funds accumulating positions in tech at the fastest pace in five months.

• Nuclear Energy Stocks Surge: Demand for AI infrastructure has pushed nuclear energy stocks

• Bank Moves on Deposits: U.S. banks are contemplating a reduction in interest payments on corporate deposits, hinting at shifting strategies.

• BTC Options Approved by SEC: The SEC has green-lit BTC ETF options, and Bitcoin’s open interest has reached an all-time high.

• Chinese Stock Buybacks at Record Highs: Chinese companies continue buybacks.

• Treasury Yields Climb: Treasury yields are up, signaling expectations for a more robust economy. Trump’s policies, if implemented, could add inflationary pressures and result in higher 10-year yields.

• Paul Tudor Jones Goes Long on Gold and BTC: Jones is bullish on gold and Bitcoin as defenses against inflation.

• $13B Flowing into BTC ETFs: Institutional investors have poured around $13 billion into Bitcoin ETFs since the start of the year.

• McDonald's Drop: A health scare linked to E. coli in quarter-pounders hit McDonald’s, sending the stock down 7%.

• U.S. GDP Expected to Grow: Projections for Q4 growth sit at 2.5%, the fastest in the G7, driven by strong consumer spending and investment.

• Canada’s Rate Cut: The Bank of Canada surprised with a 50 bps rate cut to 3.75%.

• Jobless Claims Dip: Weekly jobless claims dropped by 15k, indicating resilience in the labor market.

• Housing Sales Slump: Housing sales fell to a 14-year low, with 3.8 million units sold in September.

• MAG7 Outperforms: The MAG7 tech giants nearly doubled the S&P 500's YTD return.

• Kraken’s Blockchain Move: Kraken aims to launch its own blockchain platform for decentralized applications.

25/10/2024
🔎 Insights on the market 🔎

We had a very eventful week. The SPY started with sell-offs, hitting a low on Wednesday, which presented an excellent entry opportunity not only for the index but also for other assets, for a short-term swing of at least two days. I actually mentioned this swing at the time on my X channel, which you can check out below (and follow me for updates when I share these insights!). I personally entered with calls at the 574.55 low and sold at the open the next day, but also took advantage of opportunities with other assets.

On the other hand, we have TESLA, which reported earnings. TESLA was already quite oversold and sitting on the 200 EMA, a strong support level. This created the potential for an upward move with the earnings report, unless it was VERY negative. And that’s exactly what happened—TESLA surged 8% in after-hours trading and then jumped 20% the following day. Absolutely wild.

We also have $VIST VISTA, an oil company with operations in Argentina, which was showing a price compression, forming a pennant. It reported earnings but didn’t move much the next day. However, on the second day, it broke out, surging 8% as it broke the pennant to the upside. Another excellent trade, which we also discussed on my X channel.

Here you can see the tweet where I mentioned that a breakout was imminent.

On the other hand, don’t be mistaken—the SPY is now showing a candle that raises doubts. Personally, I took full advantage of Wednesday’s sharp drop, the earnings, and the patterns, but I’m no longer fully positioned; I’ve been taking profits. While it had a healthy price pullback, it’s currently showing a selling wick. Stay alert. Follow me for updates on my analysis.

BTC is starting to look good, breaking out of the downward channel, but it needs a solid volume inflow. On one hand, we’re seeing interesting inflows into BTC ETFs, and also in BTC options. We’ll see how it progresses, but it’s reached a new local high, which is significant.

📜 Historical Perspective 📜

• The surge in nuclear energy stocks echoes past infrastructure booms driven by transformative technologies. Similar to how renewables rose with green energy demand, nuclear energy is emerging as a key component in AI infrastructure.

25/10/2024
✍️Market Lessons ✍️

It’s important to learn to distinguish between panic selling and realistic selling, both for short and long term. This week, there was a short-term entry opportunity on Wednesday with a sharp SPY drop that seemed excessive, especially since there were no news or events to justify it.

💸 Common Mistakes 💸

Pay attention when there’s panic and irrational selling, and don’t get carried away by FOMO or irrational fear of drops. Keep a clear focus and understand when there’s panic selling or FOMO buying.

📅Next Week’s Economic Calendar (28/10 to 01/11):📅

Monday, October 28, 2024

Tuesday, October 29, 2024

Wednesday, October 30, 2024

Thursday, October 31, 2024

Friday, November 1, 2024

📅EARNINGS CALENDAR (28/10 to 01/11)📅

Monday, October 28, 2024

Tuesday, October 29, 2024

Wednesday, October 30, 2024

Thursday, October 31, 2024

📅IPO Listings (28/10 to 01/11)📅

IPO Listings