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Stocks to Watch in 2021

Posted: 30 Dec 2020 10:41 AM PST

There's no way of predicting where 2021 is going to take us because everyday the stock market brings us something new to consider. No two days will ever be the same — it's why investors find Wall Street so exciting. BUT we can plan for some of the things that'll come our way in the new year, and our plan involves safe stocks to watch in 2021.

If this year taught us anything, it’s that it doesn’t hurt to have a plan for the unpredictable…

Stocks to Watch in 2021

It's the final day of 2020, and if you're like us, then you're already making a game plan for the stocks to watch in 2021.

We've already compiled a watchlist of stocks that are piquing our interest, and ones that have proven themselves more than once in the past.

Historically, precious metals and miners catch a bid at the beginning of the year. If you look at gold and silver (which we have our eyes on right now), we think the easiest way to play it is with the ETFs — GLD for gold and SLV for silver.

These two are the easiest names to play at the beginning of the year if you want exposure to precious metals, but they're not the only ones that have investors interested in.

Copper has been on a tear lately in the stock market, and we don't see this trend slowing down anytime soon… and why should it? As one of the first metals found by humans, copper has become a useful metal for everyday life: It's used in construction, plumbing, motors and generating power.

If you think the 2021 economy is going to roar, then the stocks to watch in 2021 are copper names like Freeport-McMoRan Inc (NYSE: FCX), Southern Copper Corp (NYSE: SCCO) or Teck Resources Ltd Class B (NYSE: TECK), which have all been on fire recently, as well.

Another reason why we're feeling bullish on the metals in 2021 is because we're near all-time highs right now and we have a sneaking suspicion that the stock market is about to experience some major volatility later in January…

On January 20, 2021, President-elect Joe Biden will be inaugurated as the 46th president of the United States.

While we can't time the market and say that the volatility is going to hit exactly on this day and time of the week, we do know that investors should always prepare for the risk it could be bringing in the stock market.

In a "normal" market (what's even normal anymore?) with high volatility, we'll usually see investors combat the risk by pouring their money into safe assets… i.e., precious metals… i.e. the stocks to watch in 2021.

And if these important catalysts also occur in 2021, we might be looking at the biggest bull market yet…

Watch the video to see what we're talking about, and get the rest of the names for the stocks to watch in 2021.

The post Stocks to Watch in 2021 appeared first on Wealthpress.

Choosing the Right Futures Trading Broker

Posted: 30 Dec 2020 07:31 AM PST

We've come to realize that most of our followers are new traders, so we'd like to slow things down and start with the basics: How to actually start trading.

Spirit, money and determination mean nothing if you don't have a platform to trade on, and that's where stock brokers come in. A broker is a company that places the orders to buy and sell for you — think of them like a middle-man between traders and the stock market.

A futures broker isn't much different from this besides the fact that it specifically deals with futures trading.

BUT (there's always a but) while brokers make it easier on traders to make an impact on the stock market, there are important questions you should be realistically asking them before diving headfirst into something you might not fully understand.

We personally like to think of finding a broker similar to dating around: When searching for your perfect match and future, you're not just going to settle on anyone (well hopefully).

Your time, energy and money is precious, don't waste it on a futures broker (or significant other) that isn't right for you.

The post Choosing the Right Futures Trading Broker appeared first on Wealthpress.

Global Stock Markets Edge Higher in Final Days of 2020

Posted: 30 Dec 2020 07:05 AM PST

Global stock markets edged mostly higher this morning as 2020 comes to a close. Shares in London, Paris, Hong Kong and Shanghai rose, while Tokyo's benchmark retreated after surging to a 30-year high on Tuesday. 

That doesn't look like a bear market to me…

In the U.S., President Donald Trump's attempt to increase individual economic relief checks to $2,000 was blocked by the Republican-led Senate. For the time being, most will see $600 direct payments, extra unemployment benefits for laid-off workers and aid for other government functions. 

In today's video, I have more on which U.S. Federal Reserve reports will continue to impact the stock market… the most probable trading action for the first quarter of next year… and which sectors are prone to either rise and fall next.

 

P.S. Did you know there's a hidden market that explodes the first year a new president takes office… regardless of their party affiliation? 

In fact, this market gave investors the opportunity to earn 153% on their money the last two times a Democrat was sworn into the White House. And I think it could happen again in 2021.

There's only one catch…

The window to take advantage of this hidden market is rapidly closing… and you need to learn about it before Jan. 21. 

That's why I decided to host my annual Turning Point event before President-elect Joe Biden takes office — giving you the best chance to grow your account in the new year. 

Click here to watch my timely event. 

The post Global Stock Markets Edge Higher in Final Days of 2020 appeared first on Wealthpress.

Finding the Spark: This Indicator Could Save You Thousands

Posted: 29 Dec 2020 02:27 PM PST

If you've been following along with me over the past few months, you know I like to occasionally write about the craft that goes into the creative process.

But I've never really taken the time to write about the creative process itself.

And since I found myself with some extra time on my hands this weekend (my wife and daughter are traveling) and a "dad pad" all to myself, I figured I'd give it a go.

I've been a subscriber to MasterClass for a couple of years now, and I've really enjoyed how they address the arts — they simply bring in talented people and have them talk about what they think is important.

For me, I've found the Judd Apatow and Steve Martin comedy series to be really engaging. And David Sedaris' series on storytelling and humor had me in stitches.

But on Sunday, I sat down to watch a personal favorite — Annie Clark, known to most as St. Vincent — discuss creativity and songwriting.

A lot of what she had to say was straightforward and reasonable. For instance, "set aside time, because this is your job," is fair enough advice for all of us.

But when she said, "sometimes, what this (the creative process) means is that after three hours of kind of noodling away, you take a shower that you don't need to take. Because the second you step away from it, your brain goes, that's the melody," I about jumped off the couch.

Now, I hadn't written about this topic before — mostly because I was always under the impression that these processes are arbitrary, and so everyone else's was likely different from mine.

But clearly, I was wrong.

This description is eerily similar to how I have always tended to work — whether it's writing a song or this article — and to hear it come out of someone else's mouth frankly made me feel a little better about my own "process" of finding the spark necessary to create something.

And that was reinforced this morning when I happened to watch an excerpt of David Spade's recent discussion with Jerry Seinfeld. While they mostly talk about what makes comedy/comedians good or bad, it was Seinfeld's latest book title that stuck out to me.

The title of it is — and I'm laughing to myself just thinking about it — "Is This Anything?"

To me, that captures the entire feeling of impostor syndrome that tends to accompany a lot of ideas. In the past, I've generally worked my way through that unease by refining and editing over and over again until I'm left with something that can stand on its own. 

And as I was refining and editing today's introduction, it became clearer and clearer that as investors, we essentially have to do the exact same thing.

To that end, I thought I'd share just a little bit of my daily process, and one chart in particular, that I think might be important for us over the next few months.

The US Dollar and Volatility

The first thing I typically look at when I sit down in the morning is the overnight action on the US Dollar, the S&P 500, the Nasdaq 100 and the Russell 2000. Here's what that looked like this morning — Dollar down, SPY and Nasdaq up and the Russell flattish.

Source: Bloomberg

The dollar moving down meant that anything inversely correlated should be moving up. But commodities, which typically exhibit that behavior, were more of a mixed bag. Here's the view for oil, gold and copper.

Source: Bloomberg

When the dollar is down and commodities aren't the ones crushing it, I look at the other side of that trade — foreign markets. And sure enough, when I pull up the major Asian and Emerging Market ETF's… voila.

Source: Bloomberg

All of them except for India ticking up… there you have it.

"Dollar down" days also usually mean that volatility is headed lower, and in the morning, that was definitely the case… below is the one-month view, for context.

Source: Bloomberg

At this point, I was thinking it was going to be another boring day for stocks and international equities to grind higher. But then just a couple hours ago, Senate Majority Leader Mitch McConnell blocked the effort by Democrats (and even a handful of Republicans) to pass $2,000 stimulus checks, and just look what happened to the VIX.

Source: Bloomberg

We traded a situation like this just two weeks ago, but the spike there had a catalyst in the form of the December 18th options expiry. Those contracts are generally settled on the following Monday, and the forced selling made the VIX swing up over 30 in the opening hour.

This is not the same situation, though it does warrant a slightly deeper look.

In general, any significant move up in the VIX has corresponded with a selloff in the stock market. But while today's swing perhaps felt significant in the context of the past month, the action wasn't anywhere near as violent as it has been in previous cycles.

Source: Bloomberg

But magnitudes can be deceiving sometimes, and in these situations I like to look at second derivatives, which in this case would be the volatility of volatility. As it turns out, we haven't yet seen a significant increase in the volatility of the VIX (or in parlance, the VVIX) either. That's good, because VVIX has been a fantastic indicator of imminent market downturns. In fact, today's move is barely a blip.

Source: Bloomberg, Seawolf Research

That said, I do see one interesting similarity to today's move on the chart – notably, that the pattern we've seen in these indices over the past month is almost identical to the one they made last year…which was followed three months later by the COVID-related market crash.

Source: Bloomberg, Seawolf Research

So to answer the Jerry Seinfeld question "Is this Anything?"… I'd have to say a resounding "no."

I expect the Senate to eventually pass a larger stimulus package and COVID-19 will be on the decline by March this time around, so I don't expect the same outcome for stock markets right now.

However, it would be consistent with the dismal economic data I've discussed ad nauseum here to project our current recession to intensify by the middle of next summer, and for markets to grind lower. In fact, if the pandemic had not hit earlier this year, my models were showing that as the most likely trajectory for 2020.

While there's no action to take at the moment, this process has shown us that we need to keep a very close eye on VVIX. If it does start to creep up toward the 30 mark, we know something bad is about to happen.

And recognizing that is one creative process that could save thousands of dollars from escaping your portfolio.

All the best,

Matt Warder

The post Finding the Spark: This Indicator Could Save You Thousands appeared first on Wealthpress.

Stock Market Update: Tuesday, Dec. 29, 2020

Posted: 29 Dec 2020 02:24 PM PST

Wall Street ended a choppy  trading session after setting another round of all-time highs shortly after the open — and more in Tuesday's stock market update. 

Ongoing legislation to boost the next round of stimulus checks to $2000, which was passed by the House and is now up for a vote in the Senate, weighed on sentiment.

The lower close came after Senate Majority Leader Mitch McConnell, R-Ky., blocked immediate approval to increase the one-time payments though the legislation, which could be voted on at a later time or date if McConnell so chooses.

Stock Market Update 

The S&P 500 slipped 0.2% with the afternoon low hitting 3,723.

stock market update

The Dow also dipped 0.2% following the intraday pullback to 30,274.

stock market update

The Nasdaq fell 0.4% with the midday bottom hitting 12,827.

stock market update

The Russell 2000 sank 1.9% after testing a low of 1,950.

stock market update

Healthcare and Consumer Discretionary were the only sectors that closed higher after rising 0.4% and 0.03%, respectively. Energy and Real Estate paced sector laggards after falling 0.8%.

Stock Market Movers

Shares of Snap Inc. (Nasdaq: SNAP) soared 6% after a Goldman Sachs Group Inc. (NYSE: GS) analyst raised the firm’s price target to $70 from $47 and reiterated a Buy rating. 

The analyst said since the company's quarterly results in October, Snap has announced a number of tech innovations and product partnerships that, along with the favorable macro backdrop for online advertising, increase the likelihood of revenue growth acceleration well beyond consensus forecasts for the current quarter and beyond.

stock market update

Stock Market Outlook 

The latest AAII Sentiment Survey revealed bullish sentiment. Expectations nudged up 0.1% to 43.6% last week. Optimism remained above its historical average of 38% for the seventh straight week.

Neutral sentiment rose 4.2% to 34.4% and above its historical average of 31.5%.

Bearish sentiment fell 4.3% to 22%. Pessimism remained below its historical average of 30.5% for the seventh consecutive week.

Global Economy

European markets closed mostly higher with Germany’s DAX 30 lower by 0.2% to buck the trend. 

The UK's FTSE 100 jumped 1.6% and the Belgium20 edged up 0.2%. France's CAC 40 rose 0.4% and the Stoxx 600 gained 0.8%. 

Asian markets settled mostly higher following news that China's factory activity likely maintained a solid pace of expansion in December.

Japan's Nikkei surged 2.7% and Hong Kong’s Hang Seng rallied 1%. Australia's S&P/ASX 200 advanced 0.5% and South Korea's Kospi climbed 0.4%. China’s Shanghai fell 0.5%. 

U.S. Economy

Chain store sales increased 0.4% last week with monthly sales down -0.9% through the third week of December. Compared to December a year ago, the sales pace accelerated to a 5% year-over-year clip versus 3.7% in the prior week. Sales and traffic picked up heading into Christmas with active on-line shopping, as well as in-store, curb pick-up and home delivery. Post-Christmas traffic counts remained relatively high amid exchanging and returning gifts, and redeeming gift cards.

S&P Corelogic Case-Shiller Shiller 20-City home price index rose 1.3% to 235.8 in October, another record peak, after increasing 1.3% to 232.7 in September. The index is up 8% year-over-year versus 6.6% previously. The 10-City index was up 1.4% to 248.6 after the 1.3% September gain to 245.2. The index is up 7.6% year-over-year versus 6.3% previously. All 20 cities surveyed posted year-over-year gains, led by Phoenix (12.7%), Seattle (11.67%) and San Diego (11.58%), with New York (6.03%) and Chicago (6.32%) bringing up the rear.

Stock Market Sentiment

The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) had its two-session winning streak snapped following the morning pullback to $156.36. Near-term and upper support at $156.50-$156 was breached but held. A close below the latter would signal additional weakness towards $155-$154.50.

Resistance remains at $157.50-$158 and the 50-day moving average.

stock market update

Volatility Index

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the second straight session with the second-half high hitting 23.72. Prior and lower resistance at 23.50-24 was cleared but held. A move above the latter would signal a retest towards 25-25.50 and the 50-day moving average.

New support is at 22-21.50 followed by 20.50-20.

stock market update

Stock Market Analysis

The S&P 400 Mid-Cap Index (NYSE: MID) extended its losing streak to two sessions with the first-half low tagging 2,273. Current and upper support at 2,275-2,250 was breached but held. A close below the latter would indicate a further backtest towards 2,225-2,200.

Resistance is at 2,300-2,325 with Monday's all-time peak at 2,334.

RSI (relative strength index) is in a downtrend with key support at 60 holding. A move below this level would reopen downside risk towards 55-50 and levels from early November. Resistance is at 65-70.

stock market update

Sector

The SPDR S&P Retail ETF (NYSE: XRT) was down for the second time in three sessions following the intraday pullback to $63.58. Near-term and upper support at $64-$63.50 was tripped but held. A close below the latter would suggest additional weakness towards $62.50-$62.

Resistance at $65-$65.50 with the recent all-time peak at $65.59.

RSI is in a downtrend after failing to hold key support at 70. Continued closes below this level keeps downside risk towards 65-60 in play. Overbought resistance is at 75 and the monthly top.

stock market update

Check back after the closing bell for the most important news and numbers in the WealthPress stock market update. 

The post Stock Market Update: Tuesday, Dec. 29, 2020 appeared first on Wealthpress.

2 Biotech Stocks to Watch in 2021

Posted: 29 Dec 2020 01:02 PM PST

Biotech stocks are hot on just about everyone's radar right now. 

It's only natural since they've been the go-to stocks for most investors during quarantine, and President Trump just signed the $900 billion relief bill into law. A good amount of that money is going straight to healthcare to help distribute COVID-19 vaccines. 

And as long as you know the right places to look, the best biotech stocks to watch in 2021 aren't that hard to find. 

So if you're about to have some extra cash in your pockets and want to put it to work in the stock market, take a look at these two biotech stocks to watch in 2021. 

The 2 Best Biotech Stocks to Watch in 2021 

The COVID-19 pandemic has been a huge wake-up call. Mostly about the importance of what happens in laboratories all around the world. 

But this wake-up call also extends to the financial markets…

And most specifically, the ones where we can find biotech stocks to invest in companies behind the labs. This is driving up the market for leading biotech stocks as tracked by the S&P 500 that has given us about 59% in 2020 so far. 

I have found two biotech stocks to watch in 2021 that I want us to take a look at today. I think they will give us a good risk-return tradeoff in 2021, along with some potential solid returns. 

The first biotech stock on my watchlist is actually a REIT (real estate investment trust). 

It's Alexandria Real Estate Equities Inc (NYSE: ARE). Alexandria is a REIT that invests in office buildings and medical laboratories leased to tenants in the life science and technology industries. 

If you know anything about medical labs, they're not easy. 

You have to know what you're doing. So putting all of your money into individual companies (especially biotech ones), can be risky. 

That's why I'm suggesting you check out this biotech REIT. This biotech stock to watch in 2021 is a smart investment because you get protection by having multiple companies in the same investors, like a mutual fund. And of course, Alexandria knows what it's doing. 

But what about the second stock on my list of biotech stocks to watch in 2021? 

It's the world's largest producer of medicine and vaccinations for our favorite two- and four-legged friends. The company used to be a subsidiary of Pfizer Inc (NYSE: PFE), the world's largest drug maker. 

Pretty cool, huh? 

But as far as this biotech stock to watch in 2021 goes… you'll have to watch the video below to find out its name. 

Check out this short video to reveal my second biotech stock to watch in 2021, and be sure to leave your thoughts in the comment section below. 

The post 2 Biotech Stocks to Watch in 2021 appeared first on Wealthpress.

Avoid Making This Costly Options Mistake

Posted: 29 Dec 2020 12:55 PM PST

Options trading can be a smart way to take advantage of the stock market's price action, as it offers a cheaper way to go long or short on stocks while limiting your downside risk. 

But invest in options without a game plan, and you may end up losing a significant amount of money before you even have time to blink. 

We often get asked what separates successful and unsuccessful options traders. And in our humble opinion, it comes down to knowing how to manage your profits. 

You see, most people spend a lot of time determining when they should get into their positions. But figuring out when to exit those trades is just as important — regardless of whether or not they're going in your favor. 

This seems obvious when a trade suddenly moves against you, but it becomes more difficult to remember when you're sitting on a huge gain. 

This psychological dilemma is often referred to as FOMO, or the "fear of missing out." 

It's completely natural to look at a stock and go, "But couldn't it run just a little bit higher from here?" And theoretically, it could. 

But the stock could also fall the next day, wiping out all of the gains you were sitting on just the day before. Sometimes, you'll end up losing all of your money on a trade that, at one point, was up 100% or more. 

And sure, you'll read stories online of people buying out-of-the-money calls for $1,000, which magically turned into a million dollars. But the odds of that happening are few and far between — and it's not how you want to play the long game. 

Instead, learn how to manage your profits so that you can consistently stack the odds of winning in your favor. 

And remember that paper gains aren't real gains. Even if you're sitting on a 200% winner in your portfolio, that trade doesn't mean anything if you don't cash out of your position and take money off the table. 

That's why it's better to take your profits when you have them instead of letting them ride out and potentially expire worthless. 

You also don't have time on your side when you invest in short-term options trades. You're playing for a fast move, so when they happen, you want to get out of them just as quickly. 

And if prices go higher, they go higher. 

If you're convinced that a stock still has room to run — or that it still has room to fall — you can always close out of that position and roll those gains into a new trade that takes advantage of that price move. 

So, the next time you're sitting on a big gain, remember: Greed is good, but gambling is foolish. Don't gamble the returns you're sitting on today for the possibility of more tomorrow. 

Instead, take risk off the table and stop making excuses to stay in the position. 

Your portfolio — and your wallet — will thank you for it later. 

Until next time,

The Future of Wealth

The post Avoid Making This Costly Options Mistake appeared first on Wealthpress.

Looking Back Before We Look Ahead

Posted: 29 Dec 2020 11:14 AM PST

The ball is a day away from dropping and we can almost put 2020 in the rear-view. But before we look toward 2021, it's important to know where we've been and do a proper 2020 stock market review.

My good friend and WealthPress Head Trader, Roger Scott and I sat down for our final mid-week roundtable of 2020.

The year — and the world — were rocked by the COVID-19 pandemic. We were set on a course we couldn't have imagined.

The highlight of any 2020 stock market review is going to be the success of the stay-at-home stocks. Fueled by the coronavirus crisis, companies like Zoom Video Communications Inc. (Nasdaq: ZM) and Peloton Interactive Inc. (Nasdaq: PTON) found surprising success. 

To go with that, we saw one of the most divisive elections ever, shortly followed by the dropping of the biggest initial public offerings of the year.

Then, of course, Tesla Inc. (Nasdaq: TSLA) was added to the S&P 500… And the year's still not done.

Bitcoin USD (BTC-USD) and other cryptocurrencies can now be bought, sent and held over PayPal Holdings Inc. (Nasdaq: PYPL). Russel Okung, an NFL offensive linemen, recently became the first NFL player to be paid in Bitcoin. 

2020 Stock Market Review Take-Aways

Reviewing the year is pointless if we don't use it to our advantage in the new year.

So we need to ask some questions: What surprised us about 2020? Will those trends continue? And, of course, what do we expect from 2021?

Roger and I were able to make some personal predictions about 2021. There might be some that we laugh at, but we have some good predictions.

One thing we've both seen in this 2020 stock market review are some red flags.

Looking at the indexes, there are a lot of similarities to what we were seeing in March before the pandemic. COVID-19 altered the course and drove a bullish, if volatile, market — especially in the Nasdaq. 

Another red flag I'm seeing, and keep seeing, is how comparable this bubble is to the one we saw in the early 2000s. I keep talking about this, but those trends keep going…

For broader trends and our crazy predictions, close out your year with Roger Scott and me as we give our 2020 stock market review.

P.S. Trading experts Roger Scott and James West were able to put together huge gains under President Donald Trump — especially in 2020.

Between them, they put together 554 winning trades that totaled an 1,831% net gain. 

They're not ready to say goodbye to those results, and you shouldn't be either. That's why they developed a strategy for trading in 2021 under President-elect Joe Biden. 

This strategy is built to maximize your returns, at less than 15% risk.

In this Turning Point event, they're giving away their strategy as well as some of their top picks for the new year.

The post Looking Back Before We Look Ahead appeared first on Wealthpress.
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