Stocks, Rate Cuts, and My Portfolios
November 17, 2024 - Update
Weekly Market Recap
The Nasdaq ended the week down 3%, trading on higher-than-average volume. Despite this dip, the uptrend remains intact, with key moving averages still pointing upwards on the weekly chart.
The market’s drop followed a shift in expectations for rate cuts after Jerome Powell’s speech.
Key Takeaways from Powell’s Speech
1. No Rush for Rate Cuts
Powell stated that interest rates won’t be reduced quickly because the economy is strong. He pointed to solid growth, a strong job market, and inflation above the 2% target as reasons to stay cautious.
2. Data-Driven Decisions
The Federal Reserve will base its decisions on economic data. Powell noted that while inflation has improved, it’s still higher than desired, so the Fed needs to monitor it carefully.
3. Market Reaction
After the speech, major stock indexes fell. The Nasdaq and S&P 500 saw their largest single-day losses in two weeks as investors adjusted expectations for rate cuts.
What It Means for Markets
Interest Rates: Investors now expect fewer rate cuts in the near future, shifting to a more cautious outlook.
Stock Volatility: Stocks have become more volatile as markets reassess valuations and growth.
Bond Yields: Treasury yields rose, with the 10-year yield hitting a four-month high, reflecting concerns about inflation and slower rate cuts.
My Take on the Market
No Big Changes Yet
Powell hinted at slowing rate cuts, not reversing policy direction.A Strong Economy is Good for Stocks
A slower pace of rate cuts suggests the economy is stable, which is positive for stocks.Inflation Watch
Inflation isn’t a concern unless it rises above 3%. With oil prices around $70, this looks manageable for now.Small-Cap Rotation
If the market keeps climbing, I expect a shift toward mid- and small-cap stocks, which are currently lagging.Corrections Are Normal
Stocks don’t go up forever. Market corrections are part of investing.
Portfolios Overview
For new readers, here’s a quick explanation of the portfolios I manage publicly:
1. 10X MOMENTUM POT (link)
This is a focused portfolio with a maximum of 5 stocks from my watchlist.
Goal: Capture short- to medium-term price movements (few/some weeks).
Risk Management: I use stop-loss orders to limit downside.
Performance:
+190% in nearly 2 years (+92% annualized vs +43% for the S&P 500).
An initial $10,000 investment has grown to almost $29,000.
Activity: 30 trades completed so far.
2. 10X UNDERPRICED GROWTH POT (link)
This portfolio targets undervalued companies showing strong growth at the same time.
Goal: Identify fast-growing companies using my analysis and find good entry points with technical analysis.
Performance:
Started in mid-September, currently up 12% (vs +4% for the S&P 500).
3. 10X BEST OF ARKK (link)
This is an experimental portfolio based on stocks from the ARKK Innovation Fund.
Goal: Test my strategy on ARKK’s stock pool (I selected 11 out of 120 stocks).
Performance:
Up 15% in one month, beating ARKK by 2 percentage points.
4. 10X 2024 PICKS (link)
Each year, I select a handful of stocks to track for 12 months.
Goal: Monitor and measure performance over a full year.
Activity:
10 stocks selected in 2023, 7 in 2024.
Performance: +124% YTD
5. LONG-TERM "NEVER TOUCH" PORTFOLIO
This portfolio is designed for minimal intervention.
Goal: Hold for the long term with little to no adjustments.
Activity:
No changes made for 18+ months.
Will review and update soon, then continue touching it only once a year.
Now let’s recap last week's action, specifically.
10X MOMENTUM POT
Sold LDOS automatically due to stop-loss and realized a 5.5% gain.
My ACAD buy order was filled.
Added HQY to the portfolio, which I forgot to include earlier after the order was filled on October 21.
Below is the Portfolio as it looks right now:
Stop-loss levels have been updated across all positions.
10X UNDERPRICED GROWTH POT
Action Summary from Last Week:
Sold META automatically via stop-loss for a -2.7% loss.
Completed orders for SOFI, FOUR, ZETA, and LYFT, now full positions.
Sold ZETA automatically via stop-loss for a -8.5% loss after a conservative earnings report and a short report questioning company practices.
Buy orders for HIPO and GCT were successfully filled.
Below is the Portfolio as it looks right now:
Stop-loss levels have been adjusted across all positions.
Current Strategy
This week, I’m taking a cautious approach:
The Nasdaq’s 21-day simple moving average is trending downward, so I’m holding off on committing more money to the market.
Watchlist Favorites:
I still have several promising names on my watchlist, but I’ll wait for clearer market signals before taking action.
Below, anyway, are some of my favorite names from my lists:
Let’s see how the market develops in the coming week!
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Important: This is not investment advice. Consult a licensed financial advisor before making any investment decision.