Markets and Geopolitical Uncertainty added to the mix. Two new picks.

October 10, 2023 Update

Last Friday the market bounced at a key level, opening the door to a possible change in character in the market. See below the long wick of the weekly candle for the RSP 0.00%↑ (Equal weight SP500), indicating buyers reappearing at the bottom of the box.

Unfortunately, the news from Israel changed the picture for this coming week. War is something we never want to see anywhere. Yet it will have geo-political and economic implications that are difficult to assess. I expect markets to be on defence.

Looking at sectors, it is still the technology area that showed strength the most. See below how buyers showed up in the last two weeks. There is a demand for technology underneath the complex current economic outlook. Below the equal weight technology index:

Oil prices went down strongly last week (-8%) which is good for inflation prospects. See the Brent price chart below:

Now we need to see what will happen to oil prices based on the news from the last weekend.

Looking at predicted inflation numbers, both September and October numbers are trending in the right direction, after two reads in the wrong direction. See below the chart:

What is not trending down yet is the 10-year treasury yield that was net positive over the last week:

Recession clouds are still in the horizon, although the last GDP estimations for the Q3 is to see a 4.5-4.9% grow number, far away from a recession.

Let’s see how the market develops this week. I’m staying prudent although I like the overall setup at least for a counter-rally. Yet geopolitical news is not in favour.

PORTFOLIOS

For the 10X large cap momentum pot I like (again) $PDD. See below the chart:

Pinduoduo is a Chinese e-commerce company growing above 35% in the following 2 years, profitable and undervalued.

• I am issuing a Stop Buy order for 20 shares of PDD 0.00%↑ if it goes above $106.5 and I’m placing my first Stop Loss 10% below my entry price.

In doing so, if the market goes down because geopolitical issues, my order will not be triggered.

Then for my 10X Small Cap momentum Pot, I like ACMR 0.00%↑ here:

The company is growing fast above 40% and is undervalued.

• I am issuing a Stop Buy order for 105 shares of ACMR 0.00%↑ if it goes above $19 and I’m placing my first Stop Loss 12% below my entry price.

ACMR website: Smarter Megasonic Wafer Cleaning from ACM Research

That’s all for this week.
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.