Are we having fun yet? The market started off in January with such promise. Traders were making money, the economy was holding, and Traders Reserve was only a month away from their annual Investor’s Blueprint Live conference. There was an energy that was coming back to trading – and I’m not talking only about 0 Days To Expiration (DTE) trades.
February showed that the market was still a bit unstable, but it still felt like we were moving in the right direction.
Now in March after two days of Fed testimony, the disparity is starting to come back into trading again. The Reddit pages and Twitter messages of anger and frustration are back. Mortgage rates are ballooning up to 7%.
Hopefully, you weren’t in SVB Financial (SIVB). It closed down more than 60% to lead losers in the S&P 500. You’re reading that correctly – it dropped $161.79 in one day!
It had to sell stock to realign its capital after being hit with losses on its securities portfolio and a slowdown in funding at the venture capital-backed companies it works with.
Adding to the financial meltdown was Silvergate Capital when it said they plan on winding down operations and liquidating its bank. Bitcoin (BTCUSD) shed 7% on the news.
All combined, the financial sector took it on the chin and several stocks within the sector dropped more than one average true range move to the downside. That helped bring the entire market index lower.
It’s not all bad news. Jobless claims came in much hotter than expected, which might help keep the Fed away from that 50-basis point increase in two weeks.
So what are the two sleeper stocks to turn to? Well, sometimes I like to look at the stocks making big moves in the opposite direction of the overall market, especially when the market sells off as it has recently.
The first one is General Electric (GE). It’s been on a nearly 100% run since October of last year. While I’d wait for a pullback from here to get a better entry (or maybe sell cash-secured puts to help enter into a stock position, this stock is not the same sleepy GE it was years ago. It also increased by over 5% when the rest of the market rolled over.
My next sleeper pick is BJ’s Wholesale Club (BJ). Yes, there’s some resistance up ahead, but if we’re going to go back to defensive stocks as the Fed hikes rates further, I’d look to enter this stock at the lower trend channel.
I like to invest in stocks with a history of growing Earnings-per-share (EPS) and Sales and BJ’s fits the bill on both accounts.
That’s it for me this week. I hope everyone has a great weekend! If you want to learn more about tactics traders are using right now that have the potential to bring in weekly income, this is your time to unlock the Investor’s Blueprint Live recordings. Get them now before they’re locked in the archives!
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