Daily Plan 11.29.23
USD Weakening - Foreign Currencies Rallying
Welcome back everyone!
Today's market presented a classic whipsaw pattern, yet it offered exceptional risk-reward setups, aligning well with the levels and targets I outlined last night.
A standout event was Tesla's robust rally, sparked by Elon Musk's tweet about Cybertruck deliveries commencing this Thursday. This development is significant, as many investors have been waiting on the sidelines, eager to initiate positions once Tesla fulfills its bold promises. The commencement of Cybertruck deliveries is a milestone, not just for Tesla enthusiasts but for the company itself, countering skeptics who doubted its ability to meet its ambitious goals. While we acknowledge Tesla's strides in Full Self-Driving (FSD) and robotaxi advancements, the Cybertruck's rollout is a noteworthy achievement in its own right. However, it's important to remain cautious; if broader market trends reverse, even strong individual stock uptrends like Tesla's could face selling pressure. The stock's rally might not sustain if market indices turn bearish. Conversely, if market trends continue to ascend, Tesla could see an even more pronounced squeeze, especially as we await detailed numbers from Thursday's deliveries. It's commendable when companies deliver on their promises, and Tesla's success in the competitive pickup truck market is a testament to that. Despite potential production challenges and the impact of interest rates on vehicle affordability, Tesla's pricing strategy seems poised to meet a significant portion of the demand in the coming months. I'll be closely monitoring Tesla's trajectory and will share detailed updates in future newsletters.
Shifting focus to currency markets, my recent predictions have borne fruit, with substantial gains across several currencies. The Japanese Yen has achieved a remarkable 4:1 risk-reward ratio, contributing a 4% gain to the portfolio in less than a month. The Canadian Dollar and Swiss Franc have also performed impressively, yielding 3% and 2% gains, respectively. In the equities domain, the Dow is approaching a comforting 1:1 risk-reward checkpoint. Additionally, the 5 Year and 2 Year Treasury Notes have reached a 2:1 ratio. While I understand that many of my readers may not trade these instruments, they are crucial in futures trading, which, as I've often emphasized, offers compelling advantages over stock trading for those not solely focused on buy-and-hold strategies. These futures trades have collectively contributed an extraordinary net gain of +14% in under a month, a rate of return that, while exhilarating, is not typical and may see a moderation in the future.
Our swing stocks portfolio, tracked meticulously in our spreadsheet, has seen an encouraging 5% increase since its inception nearly two months ago.
I'm delighted to report that the recent market movements have yielded substantial gains, which all of you can follow through our regular updates. Looking ahead, my goal is to develop a system within this newsletter that will track both our past and active calls, enhancing transparency and accountability.
I hope you found value in yesterday's posts about correlations and risk-reward management. These insights are just a glimpse of what's to come, as I plan to delve deeper into these topics, offering strategies and insights that you can integrate into your trading practices.
Now, let's turn our attention to my expectations for tomorrow's trading session.
Let’s dive in!