Time To Short Palantir?

“What winning traders share, however, is that they all understand that losing is part of the game, and they all have learned how to lose.” ~ Jim Paul, “What I Learned Losing A Million Dollars”

In this week’s Dirty Dozen [CHART PACK] we look at increasing trend fragility in the SPX, track the trend in semis, discuss the prospects for “old economy” stocks, cover the relationship between fiscal and commodity returns, and more…

Let’s dive in.

***click charts to enlarge***

  1. I shared a number of *almost* yearly charts last week but waited till the official new year to share this one. 90 years of SPX.

  1. Our aggregate sentiment and positioning indicator is coming off a 90th percentile reading. This denotes significant trend fragility. Our shorter-term indicators suggest the path of least resistance is still up but the market is likely to hit a speed bump in the second half of this month. Watch the tape and keep your eyes peeled!

  1. Semis are the group to watch, they’re breaking out of a multi-week wedge. Expect them to lead on the way up as well as the way down.

  1. I’ve been saying this for a few months but the place to be digging right now is in the “old economy”.

  1. Redistribution policies drive wealth-velocity (spending per unit of wealth) as money to the lower-income brackets tends to go straight into consumption, hence the correlation between it and the return of commodities.

  1. This greater consumption is going to meet head-on with tight supplies.

  1. Ags also have the benefit of La Nina this year which tends to lead to rising commodity prices.

  1. And the global economy will continue to benefit from the historic surge in credit.

  1. Precious metals just entered their strongest seasonal period of the year and the charts suggest a breakout may be underway.

  1. Platinum is also one to watch. It’s breaking out of a 3-year base and Specs are positioned more neutral versus the other metals.
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Disclaimer: All statements are solely opinions and are for educational purposes only.

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My Stock Tips 2 weeks ago Member's comment

I think you are a bit late to the shorting party