PayPal versus Visa

September 21, 2022 by Richard Feit

I am a subscriber to Seeking Alpha which during the day updates its readers with many blurbs about what the Wall Street research is telling their readers.

This morning, September 21, 2022, I received the following:

Bank of America has added PayPal Holdings (NASDAQ:PYPL) and removed Visa (NYSE:V) to its US 1 list, which represents the firms best investment ideas from its Buy-rated, U.S.-listed stocks. BofA keeps its buy rating on Visa.
In Wednesday premarket trading, PayPal (PYPL) has gained 0.6%, and Visa (V) was up 0.2%.
By contrast, SA’s Quant system, which historically outperforms the market, has a Hold rating on PayPal (PYPL) as well as on Visa (V).

I have charted the relative performance of PYPL vs V over the last few monthe with the results below.

The swap between PYPL and V should have happened on July 22, 2022

Filed Under: Latest Updates Tagged With: Pairs trading, Paypal, Quant trading, Visa

SNAP, the provider of Snapchat over the past year has reported negative news after negative news. Now there is some news about its compensation practices which put into question more questions about the future viability of the company.

The attached charts illustrate the stock journey. Prices are as of the close of Monday, August 1, 2022

Filed Under: Latest Updates Tagged With: SNAP, swing trading strategies

Early Warning Indicator

June 4, 2022 by Richard Feit

This ‘Shoeshine Boy’ Spots Market Tops

By Pete Carmasino, chief market strategist, Chaikin Analytics

Just before the 1929 market crash, John F. Kennedy’s father stopped to get his shoes cleaned…But the enthusiastic, young shoeshine boy wanted to offer something more – stock tips.That’s all Joe Kennedy needed to hear. In his mind, nothing could indicate a market top better than unsolicited stock advice from a shoeshine boy.The legend says Joe immediately got out of the market. Then, he “shorted” it and got filthy rich.True or not, this story is an investor favorite for good reason. It sends an important warning about market manias.Put simply… a top is near when the proverbial “shoeshine boys” get in on the action.That’s important to remember right now…You see, whether it was intended or not, global investing giant VanEck created a modern-day shoeshine boy investment. And as you’ll see, it called the most recent market top.Let’s take a closer look…

The VanEck Social Sentiment Fund (BUZZ) launched in March 2021.The idea behind the exchange-traded fund (“ETF”) is easy to understand. It invests in 75 mid- to large-cap stocks based on the amount of hype they’re getting on social media. And it’s based on the Buzz NextGen AI U.S. Sentiment Leaders Index…To be considered for the index, companies need a market cap of at least $5 billion. They also need consistent and diverse mentions on social media over the previous year.From there, any stocks that meet the criteria are ranked. The top 75 go into the index.The idea is to use crowd sentiment to find good companies. Essentially, it becomes a momentum index.In short, the index and related ETF are the collective shoeshine boy…The index’s creators use artificial-intelligence (“AI”) tools to track websites like Twitter and StockTwits. These AI bots decipher between good and bad phrases relating to stocks.But it’s an interesting choice, to say the least…On Twitter, 50% of users don’t have a college degree. I’m willing to bet that a much higher percentage don’t even know investing basics. Plus, 92% of posts come from 10% of users.So there you go… That’s your BUZZ Investment Committee.It’s no surprise that the ETF is effectively a “meme stock” fund. Its largest initial holdings included Twitter (TWTR), DraftKings (DKNG), Meta Platforms (FB), and Tesla (TSLA).Investors couldn’t get enough when BUZZ launched in March 2021. Its assets quickly skyrocketed to more than $500 million.But the good times didn’t last long… Today, the ETF only boasts about $75 million in assets.And more importantly, this proverbial shoeshine boy called the latest market top. Look at how BUZZ sputtered out shortly before the broad market took a nose dive…

The ETF is down roughly 48% from its November 2021 peak. And now, the S&P 500 Index is down around 16% from its all-time high back in January.That tells us the shoeshine boy indicator worked yet again.The moral of the story is simple…A bear market was all but guaranteed when BUZZ launched. But now, this tool directly measures the proverbial shoeshine boy for us.As a result, you’ll want to keep an eye on it.Good investing,Pete Carmasino

The above was written on May 17, 2022, in The Chaikin Analytics Power Feed

The following is the current status of BUZZ vs the SPY. It is looking like good news.

The momentum ratio is now favorable to BUZZ versus SPY, and BUZZ is on an upswing.

Filed Under: Latest Updates Tagged With: BUZZ etf, Chaikin Analytics, Momentum trading, quantative trading, relative strength, SPY, statistical arbitrage, swing trading strategies

SHOPify in news

May 9, 2022 by Richard Feit

SHOP has been in the news lately regarding the acquisition of a logistic company.

Prices are as of the close of Friday, May 6, 2022.

As in all previous illustrations, Green lines are periods of LONG, Red lines show periods of SHORT, and Blue lines are periods of NO POSITION.

The weekly is the dominant signal. So in this example, the only possible daily position in the year 2022 is SHORT.

Filed Under: Latest Updates Tagged With: Day trading, Momentum trading, quantative trading, relative strength, SHOP, SHOPIFY, statistical arbitrage, swing trading

ARK Innovation ETF ARKK

April 26, 2022 by Richard Feit

Like many investors, I was impressed by the incredible upside performance of Cathie Wood’s ETF ARKK in 2020.

The holdings include Tesla, Zoom, Roku, Teledoc Health, and Coinbase Global.

With the exception of Telsa, most are down a considerable amount this year.

Despite the large underperformance of ARKK, many investors are staying the course, according to Monday’s (April 25, 2022) Wall Street Journal.

The following Monthly and Daily chart of ARKK portrays the recent price decline.

Price is as of the close today, Tuesday, April 26, 2022.

Filed Under: Latest Updates Tagged With: ARK Innovation, ARKK, Day trading, Momentum trading, swing trading

AbbVie Earnings coming next week.

April 23, 2022 by Richard Feit

“Wall Street expects a year-over-year increase in earnings on higher revenues when AbbVie (ABBV) reports results for the quarter ended March 2022. While this widely-known consensus outlook is important in gauging the company’s earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 29. On the other hand, if they miss, the stock may move lower.” Zacks Equity Research, April 22, 2022

The following pictures of ABBV Daily and Weekly show that some expect lower results than projected. Prices are as of the close of Friday, April 22, 2022.

The weekly chart is the dominant position. The green line indicates BUY. The RED line indicates SELL, and the BLUE line indicates CLOSE position.

As in all past posts, When and only when the Weekly indicates BUY, then if the daily is also Green, the position should be long. The BLUE line indicates CLOSE position.

Filed Under: Latest Updates Tagged With: ABBV, AbbVie, Day trading, day trading indicators, Earnings season. Swingtrading, Momentum trading, Quant trading, quantative trading, relative strength, statistical arbitrage, swing trading strategies

SHW revisited. Swing Trading at its best.

March 13, 2022 by Richard Feit

As many of my readers know, I have been following Sherwin Williams for many years. It qualifies in most metrics as a solid company financially and has been an outstanding holding in many portfolios.

The caveat is that if you have the ability to adjust your potfolio when certain stocks are not gaining at price but declining, then SHW has been in and out of your portfolio many times in the past few years.

Using the weekly price action as the guide and the daily price action as your trigger, the following charts are a good example of good timing in SHW.

As usual, green lines represent the time of being long on the weekly, if only the daily agrees.

Long-only from April of 2020 until the end of January 2021. Then long-only from April of 2021 until Mid January 2022. Short only from February 11, 2022.

The daily charts are the actual trade trigger.