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Almost everything was down yesterday as the 10 year treasury yield peaked around 1.75%. It was also a tough day for my portfolio, and I'm sure the majority of portfolios. Semiconductor, tech, and energy performed the worst, while the financial sector did alright. Over the last two weeks, markets, including tech, have been going up for the most part. However, we stepped back some progress today across the board. My portfolio went from having a rather good week, to down 1.6% since Monday.
The only thing I am proud about today is my $EBON put and my $XLK hedges, which are up 1300%.
Notable Recent Picks
$EBON: -11% (PUT)
I cannot say it is one of the days where I will be looking to get into a lot of short term option positions. However, I will be DCA on my long term holds that I have a lot of conviction in either right before closing bell or Monday if the market goes down again.
In the news, there is the US-China meeting in Anchorage which is setting the tone at how the two superpowers will treat each other for the next 4 years. I cannot say that this will have a direct correlation on the stock market, however I can say I don't want to own Chinese stocks right now.
"The first high-level talks between the U.S. and China since President Joe Biden took office immediately descended into bickering and recriminations, with each side sharply criticizing the other over human rights, trade and international alliances." -Bloomberg
Quote from Blinken, "The United States delegation came to Anchorage committed to laying out the principles, interests, and values that animate our engagement with Beijing," the official said. "We have continued on with our planned presentation, knowing that exaggerated diplomatic presentations often are aimed at a domestic audience." I couldn't agree with this more. I am in China and I've been hearing about this all day today. The harsh talk towards the US, in my opinion, is just meant to show the Chinese domestic audience that they will 'not be bullied' by anyone.
Take this as you will, but since the Biden administration is taking a harsher stance toward China that Trump seemingly did, I am be extra cautious with my Chinese stock plays.
Futures seem to be pointing down pre-market, but I will be taking it easy and readying my cash on the sidelines for action. Yes, cyclicals thrive in a high yield environment, however do you really want to buy overpriced $WF (Wells Fargo) right now just because interest rates are low? There comes a point for me, where I think it is better spending your money buying cheap growth stocks. Eventually the inflation fear will get priced in, and eventually the yields will stabilize.
Just so we set our expectations right, take Amazon for example. Since its IPO in 1997 I examined the month chart. $AMZN has dipped by more than 30%, 10 times, not including the dotcom bubble. We should expect a high growth play will pull back by 30% or more. Should you have not bought those dips, or should you have bought those dips? Amazon was one of the most impactful innovative companies (arguably) in the past couple of decades.
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