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Picks from today yesterday's write up:
It was a great day. My AMAT pick did very well. I still stand by most of the chip shortage fear is priced in by now and semis are about to run. Portfolio was up a needed 5.71% Monday. I am still not doing very much in terms of short term options because I need to go through a period of raising capital and rearranging my portfolio long term holds.
Monday was a great day for the markets and it looks to me as if tech is going to bounce from its lows. Since inflation is such a key talking point over the last month, the inflation fears are already priced in and there is a lot of upside to be had in the discounted tech and growth sector. Of course, no one can say if when the inflation hits it will cause the markets to crash, although I think not. This isn't the first time in recent history that there has been a lot of chatter about inflation woes, and none of the time any serious consequences came about. On March 17, 2020, BofA's Global Fund Manager Survey identified "Coronavirus" as its biggest tail risk, and it remained on the top of the list for the next 10 months as data consistently and persistently reflected an economy in a state of emergency. But the S&P 500 prices bottomed on March 23, 2020.
In other words, the market had priced in the coronavirus recession and discounted the pandemic's worst financial impacts by mid-March, but this risk still remained the consensus worry among investors for another year. The threat of inflation is the most known risk in the markets right now. And so investors should consider the likelihood that the downside of inflation has been priced in.
Not only this but the Nasdaq and tech sector ETF, XLK, have just bounced off of major support that extends all the way back to the March 2019 lows (red line). So this indicates to me there is a high probability that tech is rallying now and quite possibly for the foreseeable future.
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