The Fed’s next move is the real bogeyman

Good morning!

The markets are mixed in early going, off overnight lows in fact. I would like very much to see the rally continue but we won’t know if that’s possible until the opening bell rings. That depends on whether or not the deleveraging we saw yesterday is finished for the moment.

Here’s my plan.

1 – Forget retail sales, the Fed’s next move is the real bogeyman

The official story is that poor retail numbers drove yesterday’s selloff but that’s not true. Big highly leveraged traders are trying to get ahead of the Fed’s next move. They fear a taper tantrum and unloaded hard in the event that Fed Chair Jerome Powell said anything surprising during his remarks as part of a virtual town hall event for students and educators yesterday.

Here’s my take on what this means for markets, which stocks I’m watching most closely and why.

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Never fear another market reversal

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2 – Out of hibernation but DIY cresting

We’ve seen some amazing numbers this week from Walmart, Target, Lowes, and Home Depot. The key isn’t who wins or loses like most think, but what the guidance these companies have issued says about where those stocks and our economy go from here.

Walmart and Target show people are coming out of hibernation. I think that continues for another 12 months or more even if Covid variants continue to bloom, albeit at single digits. The DIY trend, though, is another story; I think that’s crested and could even reverse at this point. That could catch a lot of investors by surprise.

Watch my take with Maria Bartiromo earlier this morning

3 – What to do if you fancy Nvidia

Nvidia is set to report this afternoon after the closing bell against a backdrop of sky-high expectations from all sides. The company’s beaten for 16 quarters now and continues to grow rapidly.

The pattern lately has been a run up into super numbers, then a selloff that mystifies investors who don’t understand the game being played. No problem for us, though.

Consider selling cash-secured puts before the closing bell to take advantage of increased volatility. Or simply set a LowBall Order to buy “on the cheap” if prices drop tomorrow. Prior support is in the low $180s.

4 – China: That didn’t take long, buy defence

I mentioned Monday during an appearance on Varney & Co that China would likely use the chaos in Kabul to pressure Taiwan. And, not surprisingly, Beijing did so less than 72 hours later using exceptionally blunt language. Sadly, and very disturbingly, buy the best defence stocks you can.

I just profiled one I consider “best in class” in the most recent issue of One Bar Ahead™. If you’re reading along, you already know what it is. If you’re not, I hate holding back because I don’t like doing that but I’ve got to be fair to the One Bar Ahead™ Family who have paid to access my research first. Thanks for understanding!

China’s statement

5 – Buying one of these will be cheaper than hiring 10 humans

Not immediately of course, but sooner than many people think. Robots don’t take sick days, don’t require vacations, and don’t get distracted by smartphones or anything else for that matter.

Also, as you watch this video, keep in mind that the average Atlas robot now weighs 89 kilos or 196.21 pounds and is leaner and more agile than many humans.

Watch now (and be amazed)

And if dancing is more your thing

Bottom Line

I hear frequently from people who don’t want to risk anything.

What many fail to grasp is that means risking everything.

Volatility creates opportunity … the only question is how you handle it.

I’ll be with you every step of the way!

As always, MAKE it a great day.

Keith

PS: We’re only a few weeks away from the Las Vegas MoneyShow and I’d love for you to join me at the fabulous Bally’s Hotel and Casino. I’ll be talking about “where markets go from here and how to protect your money from the volatility that comes with it”, hosting panels with the fantastic Steve Forbes and Ray Wang among other folks. I’ll also be teaching two breakout sessions that may interest you if you’re worried about a reversal or beating inflation. Space is extremely limited because of Covid restrictions, so please sign up if you haven’t already!