Pre-Market Thoughts: 1/31/23
The S&P breakout has not yet been invalidated. Until that happens, I'm selectively buying dips. A look at some of my open orders and the setups for those stocks.
Disclaimer: I’m not an investment advisor. I share what I personally do and why I do it. I’ve been managing my own investments since 2014. I have good years and bad years. Fortunately more good than bad so far. Even though the HSEP is a very small novelty portfolio, it’s safe to assume I’m putting these trades on in my larger investment portfolio as well.
Woof. That was a pretty bad day yesterday. In one session, our portfolio P/L went from positive to negative - we’re still up on the year from a total return perspective, but that’s only because we’ve been closing trades and taking profit along the way. From an index standpoint, the S&P fell by more than 1% but nothing is broken yet from a technical standpoint:
Could this all be a huge bull trap? Of course. But we still have the trend breakout from last week completely intact. We have a 50 day 200 day golden cross that is probably a day or two away from occurring. What we do have is volatility leading into an FOMC that everyone expects to produce a 25 bps rate hike. We’re still a long way from rate cuts, but bulls will take whatever they can get for long bias rationale.
Open Trades
Currently, 7 of our 9 active positions have a market price under cost. But as I laid out in the end of week update last week, we have had our sights on lower prices and we’re actually getting them. I have 6 open orders that are still live and they aren’t stink bids, these could legitimately fill. For instance, my second lot of CuriosityStream CURI 0.00%↑ almost filled yesterday after a 10% move lower down to $1.67 - it closed at the low of the day and just 1 cent above a limit order that I placed on… checks notes… January 24th. Why $1.67?
CURI is slightly above the 200 day moving average of $1.64 and the 50 day moving average is approaching as it has been gaining about a penny a day since the start of the year. I believe the 200 day MA will be tested today but I don’t want to put the bid right on that level just in case I’m wrong.
As I laid out in my Seeking Alpha article last week, I think CURI actually has a fairly decent fundamental setup - secular trend tailwind, low-cost consumer price point, original owned content, solid balance sheet. This is a trade I envision holding for some time which is why I’ve been waiting for this pull back.
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