Momentum Monday – Down Goes Crypto…Up Goes The Gap?

This post is by Howard Lindzon from Howard Lindzon

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Good morning everyone.

Gravity won another battle this week….with crypto.

This week we will see if the markets care.

As always, Ivanhoff and I Zoomed an episode of Momentum Monday. You can watch/listen right here. I have embedded it below:

Here are Ivanhoff’s notes…

The main stock indexes – S&P 500, Nasdaq 1000, Russell 2k finished last week where they started. In between, they had a hiccup and several mini sector rotations.

Many of the best-performing stocks from 2020 have been major laggards in 2021 – solar, EVs, SPACs, software, etc. Those same 2021 laggards finally woke up last week and started to perk up. The most shorted stocks shone the brightest which is a sign of returning risk appetite. Curiously, it coincided with a rout in the crypto space. It’ll be interesting to see if this development will continue. In the meantime, many of the leaders of 2021 – homebuilders, metals (copper, steel, aluminum, gold, silver, etc.), retailers, financial, oil stocks pulled back, mostly to their rising 20 and 50-day moving averages.

To conclude, last week was a mean-reversion week and the choppy range-bound action is still dominating. One positive development is (Read more...)