🗞 Confirmed: See You at 5pm

WHILE YOU POUR THE JOE… ☕️
Get Your Popcorn

This is it, I’m telling you…

We’ve been discussing this theme since July 2023 📅 but have never acted on it or discussed it too deeply because the data never showed us any reason to jump the gun.

Today, that changes, and whether it is the Trump tariffs that get us there or something else, it is your turn to get behind the wheel on the ride of a lifetime.

So, on that note, make sure you join us at 5pm EST today, when I will explain why the $SPY $QQQ is about to go on a massive rotation. 🌀 

Of course, I will give you the best set of opportunities followed by one specific stock pitch as well.

See you there my friend. 👀 

GET THE HINT
Last Call

As you will see in today’s YouTube video, there is a massive rotation happening in the S&P 500 and NASDAQ indexes.

But

It’s not time to panic, yet.

The reason is that the S&P has been trading within the range given above, where responsive buyers and sellers seem to be ready with ample liquidity to swing the market back into that $6080 midpoint. 🎯 

Now, whenever this happens, it’s a twofold cause:

1. The market is being accumulated 📈 

2. The market is being distributed 📉 

Here’s why I think it’s going to be #2:

Dollars (in white) and $TLT bonds (in orange) are starting to converge, a theme we’ve called for the past month.

If you read our post on why we believed that was going to happen, then you know that this means a recession scenario is building up for the economy as well.

Just go to the economic data we got last week… 2.3% GDP growth with 2.5% PCE inflation rates.

Nominal GPD might have been positive, but real GDP (adjusted for inflation) is now negative; another quarter like that, and we’re in an official recession, but I think the market is getting ahead of that potential outcome. 📉 

Or at least the big players are:

What you see here is the Commitment of Traders report for the S&P 500 futures inventory, and here are the two main themes I want you to focus on:

1. Green Line: These are the hedge funds, pension funds, and professional money managers.

2. Red Line: These are the big banks and prime brokers, the so-called commercials who manage most of the inventory.

Notice that the funds (mostly made up of momentum strategies today) are tapped out to the upside, holding balances as big as they did right before all the S&P 500 declines since the great financial crisis. 👀 

On the other hand, the commercials are getting ready for what could be a volatile environment, which is why they’re as short as they’ve been since 2007. 📉 

However, I don’t think the market will sell off just yet, considering how last night China’s tariff announcement brought a dip that lasted for 10 minutes, met with willing buyers once again.

That just tells me the market is dying to go higher, and sometimes markets have to rally to then break. 📈 

Which is why we’re watching a trade in the following space. ⬇️ 

TRADE OF THE WEEK
Join the Party

This is the spread between the $IVE and $IVW ETFs, representing value stocks and growth stocks respectively.

What you can notice from the start is that they are now trading at a cyclical low on their spreads, meaning that value stocks could soon start to rotate and outperform growth stocks.

After the recent earnings flop in $GOOGL $AMZN $MSFT and potentially more to come, it would make sense to see the S&P and NASDAQ start to deleverage their holdings in these.

But, what will they replace them with?

The answer is: Value. ✅ 

Apart from other stocks we’ve already pitched, but that have gone up in recent weeks, we think Crocs stock is going to see a better tomorrow once this $IVE / $IVW rotation takes place.

Not to mention, its market/volume profile above looks ripe for a rebound as volume is starting to cut off.

This is what we like about cutoff setups, the risk/reward is fantastic. 🫰 

From here, we see Crocs stock headed to the next cutoff from 2024 at $115 for starters. Right there, on good enough volume and a potential backing from institutional buyers in this rotation to value, we could retest the VPOC for the year.

Which would be set at $140 ish, something our friends on Wall Street seem to agree with (again): 🎯 

Look, we still do our DCF valuations and financial analysis on dozens of companies, but if experience has taught me anything, it’s that a market profile will typically tell you where the real value of the stock is. 👀 

Unless you got yourself an early shooting star in the making, then the charts won’t tell you anything.

We’ve made finding these stocks easier for you, through a free Excel model & PDF that’s yours to keep and use. 💌 

It’s how we come up with 85% of our trade ideas, and we’ve just updated it to the most recent data, it’ll go great to follow along today’s video: 💡 

GO AND MAKE IT HAPPEN
The Most Important Thing

You might have wondered what will happen to you if AI takes over the world of trading. Well, I won’t sugarcoat it, you’ll be hopeless.

Which is why you need to understand how to beat AI at its own game, and that is by coming up with strategies that rely on 1-3 month horizons, something AI is years from every dominating.

Today’s book recommendation 📖 is dear to us, because it talks about global macro, the bread and butter behind our ideas and strategies derived from economic reports and data.

To your success,

G. 🥃