🗞 HODL

WHILE YOU POUR THE JOE… ☕️
Black Monday?

I think Jim Cramer got his calendar a little wrong here, because April Fools was on Tuesday…

The man is now calling for today to be a repeat of the 1987 crash termed as Black Monday from then on, where the Dow Jones dropped by 508 points in a single day. 📉 

Is this possible? Absolutely, anything is.

The question should be is it likely? And that’s where we differ. 👀 

Speaking of differing, let’s get on with today’s email 📧…

POKER FACE
Who’s the Patsy Here?

Friday’s close was weird.

The first half was in line with everything that was coming across the newswire, markets selling off in risk, and others rallying on safety.

That was until the last few hours of the day, where everything sort of turned on its head. 🔝 

That chart you see is GBP/USD on Forex, which is one of the proxies we use to measure risk biases, but here are others:

• EUR/USD pulled back as well as the AUD/USD

• Crude oil ended the day bouncing from the lows last minute

• Bonds pulled back from the top and closed near the lows

• Gold sold off hard into the day

• Bitcoin ended the day up nearly 3% Friday

• $IVE / $IVW spreads pulled back

Look, you can go into what all of these mean in this newsletter post where we explain a bit more of what global macro implies. ✅ 

But for the sake of time, it means markets were turning risk-on to end the day, as if they knew something.

The only one that didn’t follow, and should have, was the S&P 500.

It also conveniently closed at the biggest deviation from moving averages in five years, spiking its volatility to levels that trigger one of two things:

1. Margin calls are made as requirements rise (all brokers raised them on Friday), which liquidated a lot of people.

2. Cash injections come in to meet these calls, creating a more stable and bullish outlook.

And, based on how all these markets closed, and how extreme the deviations in the S&P 500 were, I think that we’re going to see #2 this week.

Hopefully this one sheds more light on it. ⬇️ 

The commitment of traders report showed me something very important, especially for last week.

And that is the fact that there was no institutional selling, if anything, commercials were starting to buy into the dip. 👀 

You know what that means?

No liquidations on higher margin requirements, and market makers stepping in to provide liquidity, likely as cash injections came in.

What I’m trying to say here is I think the market will rally this week. 📈 

As far as expectations, this breakdown above pretty much sums it up for the S&P 500.

By the way, that’s part of the morning meeting we’ll be running in about an hour and a half from this email, so if you haven’t, check this newsletter out for instructions on how to join the “trading floor.” 💻️ 

TRADE OF THE WEEK
Another Round?

Riddle me this:

Why would Celsius stock hold up as strongly as it did in the middle of one of the worst weeks in the history of the stock market? 🤷‍♂️ 

I think It’s because this company is too popular to go against at these prices, and because most of its supply chain and logistics are in the United States.

In other words, it’s tariff-free for the most part.

More than that, we had pitched it to you when it was BELOW $20, how’s that for a 50% return? 🔥 

Now I still think this stock has more room to go higher, as the same thesis that stood back then has gotten even stronger in today’s uncertainty.

To give you a refresher here, and those inside our Sovereign Trader Program: 5 No-Sweat Tools Taken From Goldman Sachs will know.

Celsius commands the biggest forward P/E premium to the rest of its peers, especially Monster Energy. This is something we always want to see, but there’s more.

On a forward EPS growth basis, it’s also gotten all of the subindustry beat, justifying the high 20.9x P/S multiple in my opinion. 💎 

Look, there are some who would scratch this stock off their list due to high multiples, but we’re traders here, not pension fund managers.

If we want to make money in the next 3-6 months we HAVE to line up with where the market is thinking and going. So, let’s go for another 50%? 🫰 

GO AND MAKE IT HAPPEN
As Close to It

Look, this guy claimed to be one of the biggest and best traders at Citigroup London. It’s not true, but he was pretty good, I checked when I worked at their US derivatives desk for 2 years.

Now, that being said, there are no books that can teach you trading, you sort of have to learn by osmosis (which is why I created that remote “trading floor”). But, today’s book recommendation 📖 gets close to setting expectations.

To your success,

G. 🥃