0:00
Hi, everyone. Welcome to the K E world port in a daily editorial on Thursday, March 5th.
0:04
I'm chatting with Joel Alconon.
0:06
Joel is the co host of the pre market prep show and also founder of the stock trader network.
0:12
I'll post both links in the show notes so you can follow along with Joel and his partners.
0:18
Joel, let's start big picture of these markets.
0:21
To me, it just seems like there's been a complete loss of momentum this year.
0:25
You pull up the daily chart for the S&P, the Dow.
0:28
Really, any major average in the US and it's choppy to say the least,
0:33
but almost seems like a gradual top.
0:36
I know it's dangerous calling tops in these markets because the markets just seem to have a propensity to melt higher.
0:42
But Joel, this year, I don't know, it just feels different and quite frankly,
0:47
it just feels like investors aren't as excited anymore.
0:50
And well, let's face it, there's a lot of geopolitics going on that I'm sure push them away from markets.
0:55
But am I off on saying that momentum's lost in the US markets?
1:01
Ah, good afternoon, Corey.
1:02
Thanks for having me.
1:05
Oh, boy, I don't want to get too riled up too early in the interview here.
1:10
But the spark is in trouble and there's a lot of different perspectives,
1:16
time perspectives and catalysts that you could, that you could look at.
1:20
But wars in my playbook are not that good.
1:26
And if you look at, I mean, besides the human loss that goes on,
1:31
the geopolitical situation couldn't be worse right now.
1:36
And if you think that, you know, oil ripping like this is going to be good for inflation, you're wrong.
1:45
If you think that all these job layoffs are coming or down the line,
1:50
more announced today or good, you're wrong.
1:54
The AI bubble of AI efficiency.
1:57
I mean, that's taking away not only blue collar jobs,
2:01
but it's going to take away white collar jobs.
2:04
So just cannot find too many positives in this market right now.
2:10
So Joel, is there anywhere to hide though?
2:13
It just seems interesting.
2:14
You and I were talking off mic about the news out today from Berkshire that talks about the new CEO.
2:20
He's putting whatever his wages, multi million dollar, tens of millions of dollars back into the company and the company.
2:27
Berkshire is out there buying back their own stock.
2:30
It doesn't seem like they're out there buying anything else.
2:32
Is that just a sign of this market?
2:34
What does that tell you?
2:36
400 billion dollars in cash.
2:39
Right for looking for acquisitions, looking for value, not only that.
2:44
Not only are they using the cash to buy their own stock, you know what they're doing, they're selling stock.
2:52
I mean, if you've seen imbalances or look at the 13 apps, they've been selling their bank.
2:57
There's been a huge seller on the open and bank of America for the last three weeks.
3:01
Do I know it's Warren Buffett?
3:03
No, do I know that he's been selling and decreasing his holdings?
3:07
Yes, so they're not really buying some stuff, Google, New York Times, certain things like that, but they're selling stock.
3:17
They're accumulating more cash and the cash that they're using, they're only using to buy their own stock.
3:22
If that's not symptomatic of the market environment that we're in, I don't know what could be any clear.
3:29
So I guess to that point, what about safety?
3:32
When we've seen some intrepidation by investors in the past, they've actually flown into some of these big tech stocks
3:38
because of the cash that they have and the cash that they're able to generate from their high margin business.
3:44
Are we going to see that again?
3:45
Could that actually help these tech stocks that are getting hit on this whole AI bubble narrative?
3:52
More or less, the AI bubble narrative popping could big tech actually turn out to be a winner if everyone's worried?
4:02
There's a couple of reasons.
4:04
Well, first, I'll give you what was everybody looking toward?
4:08
Like what was going to be the big catalyst to take this market over 7,000?
4:15
Ray Scott, someone was looking for Ray Scott.
4:16
You could throw that out the window right now.
4:19
No, in India, in India.
4:22
Yeah, which actually a good earnings, too.
4:24
Break it out over 194 to the moon, Alice.
4:29
And that completely was a false breakout.
4:33
Brought the market down with it.
4:35
Now it's trading at 182.
4:37
Now Trump wants to have more control over their chip sales.
4:42
So there's your belt, you know, that the leader of this bull market coming with the earnings beat
4:48
and ended up going lower.
4:51
So if you're not, you know, if you're not looking at the best of breed there,
4:55
in India, that was a video crash and in burning and never going to go back to all time.
5:00
Hi, no, I'm not saying that.
5:02
What I'm saying is that you keep developing expectations for stocks and they don't mean them.
5:09
If you want to look at something that's already taken to haircut and is actually holding
5:15
up fairly well today, software.
5:18
Yes, I said it software, Microsoft for bucks today.
5:23
Of course, it's down from 45550 to 380.
5:27
So perhaps this whole service now is having a good day.
5:33
So perhaps this like, we don't need software anymore.
5:36
Because of AI, maybe that trade is, you know, if you feel that you're looking out
5:43
longer term, and personally, I'm underwater in Oracle.
5:48
But yeah, I've already averaged down once in a small position.
5:52
But, you know, is it the end of the world?
5:55
They're laying off jobs here today.
5:57
They're laying off people too.
5:58
So yeah, I don't think I don't think it's going to be big tech.
6:02
And one thing that sticks out in my mind is did you look at the concentration
6:07
of the top components of the S&P?
6:09
And I've been around the markets for a long time.
6:11
When I seriously started following the top components in the S&P,
6:18
It was Exxon mobile.
6:22
At one point, post Chevron and Exxon mobile were in it.
6:27
Now you've got all these tech stocks.
6:28
It did Nvidia, Apple, Microsoft, Google, Amazon, Meta and Tesla.
6:32
Are your top components?
6:34
There is a change of the card going on here, right?
6:38
Where there's a rotation.
6:40
But how long is it going to take to replace?
6:44
I'm not saying they're going to get replaced because they're so behemous in the market.
6:49
But the kind of rotation that you're having going on right now,
6:53
I mean, you got some heaviness on the front end.
6:56
And I think that what you're seeing with the other 493,
7:02
you know, they can only, you know, they can only do the big things up so much.
7:06
But if they're selling the other seven to go into the 493,
7:12
this is the kind of action that you're going to see in the market.
7:15
As far, you know, Amazon is showing a little green today, Exxon mobile.
7:19
I think you should be trading higher, you know, with the news, with the oil.
7:23
But that's what you have.
7:25
That's the conditions that you have in the market right now.
7:28
Well, that rotation trade is something we always talk about because there's always
7:32
some rotation going on in the markets.
7:33
But we've also had somebody on the show recently that looks at the equal weight S&P.
7:38
And that recently was just at all time highs on Monday.
7:42
It reached all time highs and that started rolling over.
7:46
Do you ever look at that equal weight or what's your takeaway?
7:49
Yeah, I do. I look at the RSP and that hit a new all time high earlier today.
7:55
I mean, you know, it's equal weighted.
7:58
It makes you feel a little bit better.
8:02
But if they start selling everything, they sell everything.
8:05
And that's going to come down with it too.
8:07
But it's interesting to see the performance of that versus the performance of the spy.
8:12
So if you're looking for that out performance, you know, that perhaps that's the best,
8:19
Okay, now you've mentioned oil a couple of times.
8:21
Look, we all know what's going on in the Middle East and the oil price is moving higher.
8:25
Gas prices are moving higher.
8:27
I hold a number of oil stocks.
8:29
I've been rotating into oil stocks for the last probably six months now.
8:34
They're doing well, but they're not having the same sort of move that just the oil prices.
8:38
Now again, this is all geopolitics and we don't know how long that war is going to last,
8:43
but are there opportunities in oil stocks with this war?
8:47
Who knows how long it's going to go on for?
8:49
Man, I mean, you know, for me with a USO up six bucks and, you know,
8:55
X out mobile, you know, barely up on the day.
8:58
Look at that, that high, that old time high, that it, that it made what it to be getting
9:05
I mean, that, I mean, that kind of looks like a blow off top.
9:08
But, man, who knows?
9:13
I mean, Trump just is replacing Chrissy Nome as a homeland security.
9:18
Oh, so there's another person out at the administration.
9:23
I mean, where goes over, you know, the over is immediately.
9:26
Then I don't think I want to be in these stocks.
9:29
The world's dependence on oil has been not decreasing over the years.
9:34
You know, what's going on with the, you know, it's Venezuela.
9:38
When that's going to, when that's going to come online.
9:41
Actually, I'm a little disappointed by the performance today.
9:45
But, you know, that's vis-a-vis crude oil prices in the USO.
9:50
But, you know, selling into a strong, I would look at that action from Monday and say,
9:55
boy, I sure hope it gets back up there soon or else, could be at a little bit of an
10:00
overbought condition.
10:01
I mean, Exxon mobile, beginning of the year, starting at 120, going to 160.
10:06
I mean, I don't know what, I don't know what your expectations when you either, you know,
10:12
stocks with long-term projections, but that's one hell of a move.
10:18
Joe, what about gold in this environment, though?
10:20
Because gold is off of its highs.
10:22
It's still up this year, about 20 something percent.
10:25
So, it's done very well, and we all know how well it did over the last couple of years.
10:30
But, we're in a war.
10:32
There's a lot of geopolitics.
10:33
What, the US has gone into three different countries.
10:36
Just this year, and we're only two months through.
10:39
There has to be some sort of geopolitical premium in the gold price,
10:45
but is gold further going to be a safety play as the world continues to
10:50
more or less fight with the US, and it seems like fight with each other?
10:55
Yeah, I mean, you know, I was cautious, I was cautious after that blowoff top.
11:00
I thought, I thought to you and shout about it.
11:02
And to me, you know, when I, you know, I'm just looking at DSLV that just got ridiculous,
11:09
you know, over when it got to nearly 110, pull back under seven days.
11:15
I mean, you had the retracement of the move in both gold and silver, and they came up significantly,
11:22
silver came up significantly shy of that of the of the moves.
11:27
So, yeah, there could be a, you know, it could be a flight quality, but, you know, you can't,
11:33
you know, you can't eat gold.
11:35
So, you know, I mean, it's a store of wealth, it's supposed to be, you know,
11:39
fitting well into this scenario, but to me, the, you know, the price that, that, like,
11:46
those really look like blowoff tops to me, and you got to remember, you know, before,
11:51
you know, silver had this move and gold had this move.
11:54
They had years and years and years of consolidation and choppy trading.
11:59
So, I'd be more prepared for something to ragebound trading and gold and silver
12:04
than I would for it to be coming totally unravel.
12:07
They're just ripping back to all time highs.
12:11
Okay, final area, international markets.
12:14
Last year, international markets outperform the US.
12:17
The US was a big underperformer.
12:19
And then I get the argument that the US markets did so well the last couple of years.
12:23
Before last year that it was due to underperform the international markets, but
12:28
we're in the second year now where it very much seems like international markets are still,
12:33
looked at more bullishly than the US, especially when you take into account just how much
12:38
the dollar dropped last year.
12:40
Do you see opportunities in international markets?
12:44
Opportunities to sell.
12:46
I mean, I, you know, I just look at it, the rent it like the EFA and the EEM had.
12:53
I mean, is this a dip?
12:54
I mean, the EEM was 38 bucks in the middle of about
13:03
You hit $66 last week and now you're at 57.
13:10
I mean, if this contingent continues, I don't take your safe in Europe.
13:15
I don't take your safe in US.
13:16
I don't take your safe anywhere.
13:18
So no, I'd be more inclined to be taking profits and something like that.
13:23
But as far as looking at this move and the EEM here as a dip,
13:27
I mean, they got their own problems and now more problems are being created.
13:34
I guess the big takeaway being watch out.
13:37
Don't be buying very much right now or anything at all because momentum seems lost.
13:42
And yeah, it might be a good time to take some profits and write out whatever the world looks like
13:48
in the next few months and wherever these markets settle at.
13:51
But hey, it's always enjoyable chatting with you.
13:53
Even if it is a bit more on the negative front, but I've been feeling that way with
13:57
these markets too and just the general loss of momentum and the craziness we keep hearing
14:03
out of the White House and really around the world.
14:05
It's kind of a scary world right now and markets definitely are paused.
14:11
Let's just put it that way.
14:12
Joel, as always, thanks for your time and everyone listening.
14:15
You want to follow along with Joel.
14:16
Click those links in these show notes or simply search pre-market prep or stock trader network.
14:21
Thanks for your time, Joel. Have a great rest of your week.
14:24
Okay. Thank you, Corey.