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Small and Mid Caps: Turning Lemons Into Lemonade

Stock 5 Mins Read

No matter how you slice it, small and mid caps have been absolutely crushed on a relative basis since 2021. The unfortunate part about this is that most traders have recency bias. They believe whatever has been working will continue to work and things that haven’t been working should continue to be ignored. If you study stock market history, you know this isn’t how it works.

First, I want you to look at a small cap vs. large cap relative ratio (IWM:SPY) since the turn of the century:

It’s rather clear that small caps have been completely out of favor for the past 3 years. And this is what traders know and remember. But if we step back and look at the Big Picture, then we realize that there are times when small caps absolutely TROUNCE large caps. I believe we’re entering one of those bullish periods and I circled the recent action to illustrate it. While small caps have seen a big jump recently, this charts demonstrates that if this period of small cap leadership is just beginning, things could get VERY exciting into year end and throughout 2025. Shouldn’t we at least entertain this idea? For further confirmation of a major shift into small caps, watch the July relative high near 0.41. If that level is cleared, the odds of a much more significant rotation into small caps increase significantly.

I began discussing small cap outperformance all the way back in January 2024 at our MarketVision 2024 event where I laid out my themes for 2024. I indicated that the Fed’s lowering of the fed funds rate would send the small and mid cap spaces flying, which it has, though it was delayed as a result of the Fed keeping rates “higher for longer”. The stock market began anticipating a much lower fed funds rate back in July, when the June Core CPI came in much better than expected. Small caps RIPPED to the upside with the IWM outperforming the QQQ by 18 percentage points in just a little over two weeks – rapid and violent rotation that, in my opinion, predicted much more rotation to small and mid caps ahead. We’re now seeing that.

At EarningsBeats.com, we “draft” 10 equal-weighted stocks into our portfolios every quarter. At our draft on August 19th, we loaded our Aggressive Portfolio with small and mid cap stocks in anticipation of leadership in those asset classes. Our Aggressive Portfolio results were very impressive:

The S&P 500, from August 19th through the update on November 15th, gained 4.68%, but our Aggressive Portfolio scorched higher by 25.75%. That type of outperformance can make a big difference in your financial future. On Monday night, we announced the stocks that would be part of our Aggressive Portfolio for the next 90 days. Thus far, it’s a small sample, but results have been equally impressive:

After quintupling the S&P 500 in the prior quarter, our Aggressive Portfolio has upped its relative performance and currently is sextupling the S&P 500’s performance. One stock in this portfolio is Lemonade (LMND). When we announced our Aggressive Portfolio stocks that we “drafted” on Monday, LMND had just closed at 34.31. By Thursday, LMND had surged to an intraday high of 52.22, representing more than a 50% move in less than 3 days! While we certainly don’t expect this type of outperformance, it does underscore the possibilities when small and mid caps get on a roll and are seeing money rotate into these asset classes. Another stock in this Portfolio jumped nearly 25% and a couple others had gained more than 10%.

Learn More About Small and Mid Cap Stocks

Last weekend, I offered our FREE EB Digest subscribers a Special Offer. I produced a video highlighting a chart that is SCREAMING at us to buy small and mid cap stocks, along with 10 small and mid cap stocks that I really like. Some of these 10 made it into our Portfolios that were announced on Monday. I’m happy to extend this offer. Anyone that would like a copy of this Small and Mid Cap recording and also would like to see ALL of the stocks that are now in our Portfolios, CLICK HERE to start your 30-day FREE trial to our EB service. There’s a very simple fundamental reason why we’re seeing this shift into small and mid caps and I show you on the Small and Mid Cap recording. If I continue to be correct about this small and mid cap explosion, it’ll likely turn out to be your best decision of 2024. Kick the tires at EarningsBeats.com, check out our small and mid cap favorites, and get ready to improve your trading results!

It’s also the start of our Fall Special. Therefore, signing up for a FREE 30-day trial makes a ton of sense right now. If you like our service, you’ll have the opportunity to save $200 on our annual membership under the Fall Special. An annual membership will include your FREE registration into our MarketVision 2025 event in January, priced at more than $500 for non-members.

YouTube Show

Finally, my weekly market report, “Here’s Why Small and Mid Caps Will Keep Flying!”, was updated earlier and is now available on YouTube. Please “Like” the video and “Subscribe” to our YouTube channel as we continue to build our online community! Thanks so much for your support!

Happy trading!

Tom

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Investing

Tech 5: Bitcoin Price Sets Five New Records, Google Mulls Forced Divestiture

Investing 10 Mins Read

Bitcoin achieved five new all-time high prices this week, boosted by a wave of renewed optimism and growing confidence in the future of the cryptocurrency.

Meanwhile, MicroStrategy (NASDAQ:MSTR) increased its Bitcoin holdings, sending its share price to record-high valuations, and a major development in Google’s (NASDAQ:GOOGL) anti-trust trial weighed heavily on investors.

1. Bitcoin nears US$100,000, Solana, XRP soar

This week proved to be another dynamic period in the digital asset market.

The industry witnessed multiple new all-time highs and regulatory developments, with the total crypto market cap reaching a record-breaking US$3.025 trillion on Monday (November 18). The Crypto Fear and Greed Index also hit its highest level since March, a sign that market sentiment is becoming increasingly bullish.

After the US Federal Reserve dampened expectations last week of further interest rate cuts when it meets in December, Bitcoin’s volatility score reached a high of 3.34 on Monday, according to TradingView data, while its price fluctuated between US$89,000 and US$93,800 at the start of the week.

Tuesday’s (November 19) debut of BlackRock’s Bitcoin ETF (NASDAQ:IBIT) options drove Bitcoin’s value up by over 2 percent as nearly US$2 billion poured into the newly approved funds on their first day. The ratio of call options to put options was 4.4 to 1, indicating more bets on Bitcoin’s price increasing than decreasing.

On Wednesday (November 20), Bitcoin broke US$94,000 for the first time in history in pre-market trading, marking the first of five new all-time highs this week.

The rally continued after Bloomberg News reported that Trump’s team was holding discussions with the digital asset industry about whether to create a new White House post solely dedicated to crypto policy. This lead to its next record high of US$97,000 just after midnight EST on Thursday (November 21), followed by an ascent to US$98,310 early on Thursday morning.

It pulled back slightly as trading commenced, then surged to US$99,500 following the news, reported by Reuters around 2:30 p.m. EST on Thursday, that US Securities and Exchange Commission Chairman Gary Gensler would be leaving his position on January 20.

Bitcoin’s opening price on Friday (November 22) was US$97,915 and it notched its final all-time high price of US$99,645 at around 2:30 p.m. EST. It closed the week with a valuation of around US$99,300 following reports that Trump’s social media company filed for a trademark with the United States Patent and Trademark Office for computer software for use as a digital wallet, payment processing for crypto, fiat and trading in digital assets.

Bitcoin performance, November 16 to 22, 2024.

Chart via CoinGecko.

In other crypto news, the biggest gainer was Solana emerged as a significant mover, with its price increasing by 20.2 percent week-over-week to reach US$253.70 on Friday. The cryptocurrency, which outpaced Ethereum in terms of decentralized exchange (DEX) volume this week, hit a record-high valuation of US$262.46 on Thursday.

This substantial change was driven by Bitwise’s registration of a Bitwise Solana ETF on Thursday, indicating the company’s intent to launch a spot Solana ETF. This makes Bitwise the latest institution to file for a Solana spot ETF. Previously, VanEck filed with the SEC for a spot Solana ETF on June 27, 21Shares submitted its Solana ETF application on June 28 and Canary Capital filed on October 30.

By the time the trading day closed Friday, XRP had climbed 33 percent this week to a new all-time high of US$1.48 on Friday morning. Open interest for XRP derivatives also surpassed US$2 billion on Sunday (November 17). Ethereum was also up this week, moving up 8.4 percent for the week to US$3,293.28.

2. MicroStrategy scoops up more Bitcoin

MicroStrategy’s Bitcoin buying spree continued this week as the company announced a private offering of US$1.75 billion of convertible senior notes on Monday. In the press release, the company shared its intention to use the proceeds of the sale to purchase more Bitcoin and for general corporate purposes.

On Tuesday, amidst a Bitcoin rally, MicroStrategy’s options open interest exceeded market capitalization, and the stock’s trading volume was comparable to that of Apple and Microsoft. Its share price closed at a record US$430, 24.79 percent above the previous day’s opening price of US$345.15.

On Wednesday, MicroStrategy made the top 100 US publicly traded companies by market capitalization. Boosted by the surging price of Bitcoin, the company increased its offering to US$2.6 billion. Chairman Michael Saylor also said would be presenting a brief pitch to Microsoft’s (NASDAQ:MSFT) board of directors to encourage the company to include Bitcoin in its investment portfolio.

On Thursday MicroStrategy’s share price jumped to US$535.74. However, its week’s gains were reversed after Citron Research said the firm was shorting the software company. “Much respect to @saylor, but even he must know $MSTR is overheated,” the firm tweeted as the markets opened.

Later that day, MicroStrategy announced it had completed its offering, worth US$3 billion, but it wasn’t enough to sway investors. The company’s share price ultimately closed the day at US$397.28, down 25.84 percent from the start of trading, marking its worst single-day loss since April 30.

The company’s share price ultimately ended the week up 22 percent overall after recovering slightly during Friday’s session, which it closed at US$421.88.

3. Judge rules Alphabet must divest its Chrome business

In a court filing released on Thursday morning, antitrust enforcers ordered Google’s parent company, Alphabet, to sell its Chrome browser. According to Bloomberg Intelligence analyst Mandeep Singh, the business could go for as much as US$20 billion.

Alphabet’s share price slid 4.7 percent to a four-week low as markets wrapped on Thursday. It dropped a further 0.38 percent after hours.

Alphabet performance, November 18 to 22, 2024.

Chart via Google Finance.

This is the latest development in the antitrust lawsuit filed against Alphabet in 2020. In August 2024, following a trial that began in September 2023, a judge ruled that Google’s practice of paying billions of dollars to maintain its position as the default search engine was an illegal monopolization of the search market.

Google will have an opportunity to submit its own views on the matter next month. In a statement, Kent Walker, President of Global Affairs for Google and Alphabet, said, “DOJ’s approach would result in unprecedented government overreach that would harm American consumers, developers, and small businesses — and jeopardize America’s global economic and technological leadership at precisely the moment it’s needed most.”

The Justice Department will also offer additional perspectives in March 2025 before a two-week hearing scheduled for April. However, when President-elect Donald Trump takes office in January, his administration could opt to discard or make changes to the injunction.

In the court filing, the plaintiffs also proposed that Google be prohibited from acquiring, investing in or partnering with any company that influences consumer search behavior, including AI-powered search products.

Sources suggest this provision is aimed at Google’s investment in Anthropic. If the judge accepts the proposal, Google will be forced to unwind a partnership with Anthropic, which was struck in 2022 and made Google Cloud Anthropic’s primary cloud provider.

The two companies are also collaborating to develop AI systems. Google’s investments in Anthropic have been a significant source of funding for Anthropic’s research and development efforts. The deal was subject to regulatory scrutiny in the United Kingdom; however, the Competitions and Markets Authority, the UK’s primary competition regulatory, ultimately decided not to pursue an investigation on Thursday.

Enforcers also recommended the divestiture of the company’s Android operating system in the case that the ‘proposed conduct remedies are not effective in preventing Google from improperly leveraging its control of the Android ecosystem to its advantage, or if Google attempts to circumvent the remedy package.’

Google ended the week with its share price down 4.79 percent for the week at a valuation of US$166.57.

4. Sky-high expectations dampen NVIDIA’s Q3 earnings report

NVIDIA’s (NASDAQ:NVDA) share price experienced a turbulent week, starting with a 1.3 percent decline on Monday following a report in the Information alleging that the company’s new Blackwell graphics processing units (GPUs) were overheating servers. Sources claimed that NVIDIA had asked suppliers to redesign the server racks due to this issue late in the production process, but did not alert customers of a potential delay.

While the news sparked concerns about the potential impact on NVIDIA’s revenue, Business Insider reported the following day that the issues had largely been resolved.

Amidst this backdrop, NVIDIA’s Q3 2025 results on Wednesday were eagerly anticipated. NVIDIA reported total revenue of US$35.1 billion for Q3, up 17 percent quarter-over-quarter and up 94 percent year-over-year. This was higher than both NVIDIA’s own Q3 revenue guidance of US$32.5 billion from its Q2 2025 report and LSEG analysts’ estimates of US$33.1 billion.

Data center revenue came in at US$30.8 billion, up 17 percent from Q2 and up 112 percent from a year ago. GAAP earnings per diluted share were US$0.78, up 16 percent from the previous quarter and 111 percent from a year ago. The consensus estimate for earnings per share was US$0.75.

Despite an objectively positive Q3 performance, NVIDIA’s share price fell in after-hours trading. The company’s Q4 sales forecast of US$37.5 billion, while strong, disappointed investors that projected the first quarter to count sales of its anticipated Blackwell chips to be between US$37.1 billion and US$41 billion.

This lower-than-expected forecast represents the company’s slowest revenue growth projection in seven quarters, even considering Big Tech’s multi-billion dollar spending plans on AI.

Additionally, the company remained silent on whether it anticipates sales of its Hopper chips to increase as Blackwell chips become available. A slowdown in Hopper sales could negatively impact Q4 revenues, particularly if production issues continue.

By Thursday morning it had recovered slightly, opening 2.3 percent above Wednesday’s close and over 7 percent higher than its valuation on Monday. NVIDIA ultimately closed the week up 1.84 percent at US$141.95.

5. Super Micro Computer hires new auditor, submits plan of compliance

Shares of Super Micro Computer (NASDAQ:SMCI) jumped on Tuesday after the company revealed it hired a new auditor, BDO USA and submitted a compliance plan to the Nasdaq Exchange (INDEXNASDAQ:.IXIC) with regards to the delayed filing of its reports, Form 10-K for the fiscal year ended June 30, 2024, and Form 10-Q for the period ended September 30, 2024.

Both were delayed due to concerns raised by the company’s former auditor, Ernst & Young, about its financial reporting, governance and internal controls.

Its share price rose to US$27.16 at the opening bell on Tuesday, over 26 percent higher than Monday’s closing price.

Super Micro may be able to extend its deadline for filing the required document until February if the Nasdaq accepts its plan. The company’s listing on the exchange would be maintained during this period until a final decision is reached regarding its compliance. In the event the plan is not approved, Super Micro has the option to appeal the decision.

Its share price was US$33.15 on Friday’s close, up over 65 percent for the week.

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Danielle DiMartino Booth: Trump, Powell and US Recession Reality — Where to Focus Now

Investing 2 Mins Read

Weighing in on Fed Chair Jerome Powell’s November 14 comments, she said he remains steadfast in his message that while inflation is coming down to the Fed’s 2 percent target, there’s a bumpy path ahead that will require patience.

‘I think the idea here is not so much to hang onto every single word he’s saying about the economy, but rather to understand that he’s retaining flexibility and does not want to be pigeonholed into saying, ‘Okay, there was one report that came out and therefore we’re going to do this.’ I don’t think that’s his aim,’ DiMartino Booth explained.

In her view, the Fed is likely to cut by another 25 basis points at its next meeting in December.

DiMartino Booth also went over where investors may want to focus their portfolios right now, noting that in the current environment it makes sense to be defensive and protective of assets that generate returns.

‘To the extent that (investors are) going to be exposed to the stock market, they should also be focused on companies that behave like gold — that are defensive in nature, that have really strong cashflow streams and are able to maintain their dividends and provide safe harbor when other riskier asset classes don’t do the same,’ she said.

She added that even though the Fed is lowering rates, there’s a trend of investors turning toward cash.

‘It looks like they’re trying to pare back their risk exposure by increasing their cash holdings despite the fact that they’re getting a lower level of an interest stream off that,’ DiMartino Booth said.

Watch the interview above for more of her thoughts on the Fed, Powell and the outlook for the US economy.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Doug Casey: Gold to Go Much Higher; “Very Bullish” on Uranium, Oil/Gas, Coal Stocks

Investing 2 Mins Read

He also discussed what he is — and isn’t — doing with his money right now.

‘Stay out of stocks, with a few exceptions here and there — there are always exceptions. Stay out of all bonds, frankly. They’re a triple threat to your capital,’ Casey said during the interview. ‘I still like commodities — commodities relative to everything else are cheap. And gold isn’t particularly cheap, but it’s going a lot higher.’

As the gold price moves up, he sees investors becoming more interested in gold stocks.

“The gold-mining stock market has actually been okay. Not great, but okay to me over the last three or four or five years. But I think that the world will turn, and at some point people are going to say, ‘I’ve got to have these crazy little crappy gold stocks,” Casey explained. ‘And they’ll go 10 to one again like they have as a group, five times actually, since 1971, when gold was freed up — or the dollar was first devalued, I should say — by the Nixon administration.’

Outside of gold, Casey remains interested in oil and gas stocks, as well as coal stocks. He also mentioned uranium as a sector that has his attention, pointing to the coming wave of artificial intelligence data centers that need power.

‘You’ve got to gird your loins, because you don’t know what kind of insanity is going to visit itself upon the world within the next few years. Even if Trump does all the right things — which he won’t, absolutely not — although he’s doing a lot of right things. You want to insulate yourself from what I think will be a gigantic catastrophe that we’re looking at,’ he said. ‘More is better, especially when it comes to money. Especially when that money is in gold.’

Watch the interview above for more from Casey on his current strategies for investing and speculating.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Business

Amazon to invest another $4 billion in Anthropic, OpenAI’s biggest rival

Business 3 Mins Read

Amazon on Friday announced it would invest an additional $4 billion in Anthropic, the artificial intelligence startup founded by ex-OpenAI research executives.

The new funding brings the tech giant’s total investment to $8 billion, though Amazon will retain its position as a minority investor, according to Anthropic, the San Francisco-based company behind the Claude chatbot and AI model.

Amazon Web Services will also become Anthropic’s “primary cloud and training partner,” according to a blog post. From now on, Anthropic will use AWS Trainium and Inferentia chips to train and deploy its largest AI models.

Anthropic is the company behind Claude — one of the chatbots that, like OpenAI’s ChatGPT and Google’s Gemini, has exploded in popularity. Startups like Anthropic and OpenAI, alongside tech giants such as Google, Amazon, Microsoft and Meta, are all part of a generative AI arms race to ensure they don’t fall behind in a market predicted to top $1 trillion in revenue within a decade.

Some, like Microsoft and Amazon, are backing generative AI startups with hefty investments as well as working on in-house generative AI.

The partnership announced Friday will also allow AWS customers “early access” to an Anthropic feature: the ability for an AWS customer to do fine-tuning with their own data on Anthropic’s Claude. It’s a unique benefit for AWS customers, according to a company blog post.

In March, Amazon’s $2.75 billion investment in Anthropic was the company’s largest outside investment in its three-decade history. The companies announced an initial $1.25 billion investment in September 2023.

Amazon does not have a seat on Anthropic’s board.

News of Amazon’s additional investment comes one month after Anthropic announced a significant milestone for the company: AI agents that can use a computer to complete complex tasks like a human would.

Anthropic’s new Computer Use capability, part of its two newest AI models, allows its tech to interpret what’s on a computer screen, select buttons, enter text, navigate websites, and execute tasks through any software and real-time internet browsing.

The tool can “use computers in basically the same way that we do,” Jared Kaplan, Anthropic’s chief science officer, told CNBC in an interview last month, adding it can do tasks with “tens or even hundreds of steps.”

Amazon had early access to the tool, Anthropic told CNBC at the time, and early customers and beta testers included Asana, Canva and Notion. The company had been working on the tool since early this year, according to Kaplan.

In September, Anthropic rolled out Claude Enterprise, its biggest new product since its chatbot’s debut, designed for businesses looking to integrate Anthropic’s AI. In June, the company debuted its more powerful AI model, Claude 3.5 Sonnet, and in May, it rolled out its “Team” plan for smaller businesses.

Last year, Google committed to invest $2 billion in Anthropic, after previously confirming it had taken a 10% stake in the startup alongside a large cloud contract between the two companies.

This post appeared first on NBC NEWS

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Four Prerequisites to Improve Your Odds – A Live Example

Stock 3 Mins Read

Even though trading based on chart analysis involves some discretionary decisions, chartists can improve the odds of success by systematizing their process. This report will show four prerequisite filters based on a top-down approach. We will start with the broader market, look at the sector, and then apply two qualifying filters to the stock.

First, I would make sure we are in a bull market. The chart below shows SPY hitting a new high in early November and trading well above its rising 200-day. This is clearly bullish for the market as a whole.

Second, I would ensure the sector is also in a long-term uptrend. TJX Cos (TJX) is part of the Consumer Staples SPDR (XLP) and this sector recorded a new high in September. It fell back into November, but remains above its rising 200-day SMA, and in a long-term uptrend. Note that TJX featured in our report and video on Friday. Click here to join and get two bonus reports.  

Also notice that XLP is breaking out this week. The ETF formed a falling wedge and retraced 50-62.18% of the July-September advance. Both the pattern and the retracement are normal for corrections within bigger uptrends. XLP is breaking out of the wedge to signal a continuation of the bigger uptrend.

Turning to the stock filters, I want the stock to be in a long-term uptrend and to show upside leadership. On the TJX chart below, prices are moving from the lower left to the upper right, and the stock recorded a new high this month. Stocks hitting new highs are in strong uptrends and show upside leadership. Also notice that the 10-day EMA is 9.8% above the 200-day EMA. The bottom indicator shows the PPO (10,200,0), capturing the percentage difference between these two EMAs.

TJX meets all the prerequisites and also sports a bullish breakout on the price chart. After surging to a new high in mid August, the stock consolidated with a triangle. A consolidation within an uptrend is a bullish continuation pattern. TJX broke out with a strong move in November and this signals a continuation of the uptrend. Re-evaluation support is set at 112. 

Highlights from Recent Reports/Videos:

  • S&P SmallCap 600 SPDR surges after throwback to breakout zone.
  • A Short-term setup could lead to a long-term breakout for DataDog (DDOG).
  • Medical Devices stand out in an underperforming healthcare sector.
  • Robotics & AI ETF triggers big breakout and holds above breakout zone.
  • Gold and Uranium break out as Lithium sets up.

Click here to join and get two bonus reports!

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An All-Around Rally: Navigating Stocks, US Dollar, Gold, and Bitcoin Price Action

Stock 5 Mins Read

The last full trading week before the Thanksgiving holiday has ended on a positive note. Following up on yesterday’s blog post, the S&P 500 Equal Weighted Index ($SPXEW) has continued to outperform the S&P 500’s price action and hit a new all-time high. Similarly, the Nasdaq 100 Equal Weighted Index ($NDXE) is close to its all-time high (0.10% away from it according to the Distance to 52-Week High indicator).

The mid and small-cap indexes, $MID and $SML, remained market index leaders on Friday. From the daily chart of the S&P 600 Small Cap Index ($SML) below, note how the index broke out of a sideways trading range, climbed to a high on November 11, and then pulled back and bounced off the previous October high resistance level. It’s now on its way back to its all-time high.

FIGURE 1. DAILY CHART OF S&P 600 SMALL CAP INDEX ($SML). A breakout followed by a pullback and then a bounce of a support level looks promising for small-cap stocks.Chart source: StockCharts.com. For educational purposes.

The percentage of stocks trading above their 50-day moving average is rising, and advances outperform decliners. With market breadth supporting bullish price action, it’s safe to say that investors are piling into small caps.

So, in a nutshell, Friday’s price action was a continuation of Thursday’s action. The S&P 500 ($SPX) and Dow Jones Industrial Average ($INDU) are approaching their all-time highs, but the Nasdaq Composite ($COMPQ) still has to break through 19,080 to make its way to its all-time high.

In addition to equities, precious metals, especially gold, have also been climbing higher. The daily chart of the SPDR Gold Shares ETF (GLD) below shows that after hitting a high on October 30, GLD fell approximately 8.30%. It has now bounced back, rising around 5.80% from the November 14 low. GLD faces resistance that sits slightly above $250 (red horizontal dashed line) and support from its 25-day simple moving average.

FIGURE 2. DAILY CHART OF SPDR GOLD SHARES (GLD). Gold’s rise, pullback, and rebound make it a chart worth adding to your ChartLists.Chart source: StockCharts.com. For educational purposes.

If GLD overcomes that resistance next week, it indicates that investors’ concerns about slower rate cuts and geopolitical tensions remain front and center. 

The Greenback Keeps On Growing 

The US dollar has also been rising, hurting other currencies, especially the euro. The weekly chart of $EURUSD below shows it hitting levels it last saw at the end of 2022.

FIGURE 3. WEEKLY CHART OF $EURUSD. The steep fall in the euro could be due to a weakening European economy and concerns about geopolitical tensions.Chart source: StockCharts.com. For educational purposes.

The rise in the greenback is due to a strong US economy, but the move in the $EURUSD is significant. Europe is experiencing slower economic growth, but geopolitical concerns have also risen. The two may be the reason for the intensity of the fall in the euro.

Usually, a stronger dollar puts pressure on commodities such as precious metals, but that’s not happening right now. Besides potential geopolitical tensions, there’s also the concern that the Fed may have fewer interest rate cuts next year. According to the CME FedWatch Tool, the probability of a 25 basis point in the December FOMC meeting has dropped to 56.20%.

Bitcoin’s Bold Move

You can’t help but notice Bitcoin’s rise this week. The cryptocurrency crossed its psychological $100,000 level, but closed slightly lower at $99,210 (see chart below).

FIGURE 4. DAILY CHART OF BITCOIN. The explosive rally in Bitcoin has caught everyone’s attention. $BTCUSD hit the psychological $10K level but couldn’t hold on to it.Chart source: StockCharts.com. For educational purposes.

After bouncing off its 21-day exponential moving average (EMA) in early November, $BTCUSD rocketed higher, consolidated for about seven days, and then continued its journey higher. The moving average convergence/divergence indicator in the bottom panel shows no signs of slowing down.

Looking Ahead 

There’s been a lot of excitement this week. Next week is a short trading week, but there are some key economic data to watch, the more important ones being the PCE, durable goods orders, and FOMC minutes. This would bring the focus on what the Fed is likely to do when it meets next. If there’s an indication of no rate cuts in the December meeting, we could see more of the same price action spill into next week.

If you want to be notified of new articles published in the ChartWatchers blog, sign up on this page.

End-of-Week Wrap-Up

  • S&P 500 up 1.68% for the week, at 5969.34, Dow Jones Industrial Average up 1.96% for the week at 44,296.51; Nasdaq Composite up 1.73% for the week at 19,003.65
  • $VIX down 5.20% for the week, closing at 15.30
  • Best performing sector for the week: Materials
  • Worst performing sector for the week: Health Care
  • Top 5 Large Cap SCTR stocks: Summit Therapeutics (SMMT); Applovin Corp. (APP); MicroStrategy Inc. (MSTR); Texas Pacific Land (TPL); Palantir Technologies (PLTR)

On the Radar Next Week

  • October New Home Sales
  • FOMC Minutes
  • October Durable Goods Orders
  • October PCE Price Index
  • November Chicago PMI

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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2024 is Shaping Up Like 2021, Which Did Not End Particularly Well

Stock 4 Mins Read

I’ve always found technical analysis to be a fantastic history lesson for the markets. If you want to consider how the current conditions relate to previous market cycles, just compare the charts; you’ll usually have a pretty good starting point for the discussion.

As we near the end of an incredibly bullish year for the S&P 500 and Nasdaq, I’m seeing plenty of signals that suggest the strength of 2024 may lead to a much weaker following year. Today we’ll compare 2024 to 2021, talk about the many conditions which are highly similar, and also review an initial signal from one of the most bearish indicators in our arsenal, the Hindenburg Omen.

Market Trend Model Shows Striking Similarities

2024 has been a strong market year by any standard, from the continuous upward slope of moving averages, to the relatively low volatility compared to previous years, to the minimal drawdowns along the way. My Market Trend Model is what I often use to make an initial comparison between two historical periods, and it certainly backs up this particular conjecture.

Note our long-term model (purple histogram) has been bullish for all of 2024, exactly as we logged in 2021. We can see the same pattern of consistent bullishness from the medium-term mode (green histogram) for both years. Even the short-term model appears to identify pullbacks of a similar timeframe and depth for both years.

2021 Finished Strong, But 2022 Brought a Whole New Trend

2021 ended in a position of strength, with the S&P 500 making a new high going into year-end. However, the moment the calendar was flipped to 2022, everything quickly changed to a bearish phase. The short-term model turned almost immediately, and instead of quickly turning back higher, it remained bearish for weeks at a time.

The medium-term model, which I consider my main risk on/risk off indicator, turned bearish in mid-January and remains so until the end of Q1. So what differentiated early 2022 from the garden variety and very buyable pullbacks of 2021 was that the medium-term model behaved quite differently.

As we head into year-end 2024, this is perhaps the most important chart in my Market Misbehavior LIVE ChartList, as it would help confirm whether an impending selloff is different from the relatively painless and short-lived pullbacks in 2024.

The Hindenburg Omen Suggests a Potential Topping Pattern

Strategist Jim Miekka created the Hindenburg Omen by reviewing a series of previous major market tops and looking for similarities. He honed in on three particular factors:

  1. The market is in a confirmed uptrend as measured by the 50-day ROC of the NYSE Composite Index ($NYA).
  2. At least 2.5% of the NYSE stocks make a new 52-week high AND a new 52-week low on the same day.
  3. The McClellan Oscillator breaks below zero, confirming negative breadth conditions.

One final signal Miekka included was that there should be two independent signals within one month.  

In the bottom panel, I’m showing a composite indicator on StockCharts that tracks the three conditions listed above. You may notice that there have been a number of initial signals so far in 2024, but at no time have we received the confirmation signal within one month of the initial signal!

That’s where we’re at as we look forward to year-end 2024 — weakening breadth conditions and investor indecision. Now it’s all about whether we receive that confirmation by mid-December. If so, that would suggest that early 2025 may look painfully similar to a very bearish early 2022!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

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West High YieldResources Ltd. Announces Proceeds from Exercise of Options

Investing 4 Mins Read

West High Yield (W.H.Y.) Resources Ltd. (TSXV: WHY) (FSE: W0H) (the ‘Company’ or ‘West High Yield’) announces the receipt of proceeds from the exercise of certain stock options (the ‘Options’) of the Company.

One holder of options (the ‘Optionholder‘) exercised an aggregate of 100,000 Options resulting in the issuance of 100,000 common shares of the Company (each, an ‘Option Share‘). The Options were exercisable at a price of CAD$0.15 per Option Share. The Options exercised by the Optionholder were issued to the Optionholder, among others, as part of an option grant of the Company on November 27, 2019.

About West High Yield

West High Yield is a publicly traded junior mining exploration and development company focused on acquiring, exploring, and developing mineral resource properties in Canada. Its primary objective is to develop its Record Ridge critical mineral (magnesium, silica, and nickel) deposit using green processing techniques to minimize waste and CO2 emissions.

The Company’s Record Ridge critical mineral deposit located 10 kilometers southwest of Rossland, British Columbia has approximately 10.6 million tonnes of contained magnesium based on an independently produced National Instrument 43-101 – Standards of Disclosure for Mineral Projects (‘NI 43-101‘) Preliminary Economic Assessment technical report (titled ‘Revised NI 43-101 Technical Report Preliminary Economic Assessment Record Ridge Project, British Columbia, Canada’) prepared by SRK Consulting (Canada) Inc. on April 18, 2013 in accordance with NI 43-101 and which can be found on the Company’s profile at https://www.sedarplus.ca.

Contact Information:

West High Yield (W.H.Y.) RESOURCES LTD.

Frank Marasco Jr., President and Chief Executive Officer
Telephone: (403) 660-3488
Email: frank@whyresources.com

Barry Baim, Corporate Secretary
Telephone: (403) 829-2246
Email: barry@whyresources.com

Cautionary Note Regarding Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that they will prove to be correct.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada and globally; industry conditions, including governmental regulation; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; and other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. The Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities of the Company will not be registered under the United States Securities Act of 1933, as amended (the ‘U.S. Securities Act‘) and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/231112

News Provided by Newsfile via QuoteMedia

This post appeared first on investingnews.com

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13 Canadian Crypto ETFs (Updated 2024)

Investing 7 Mins Read

Cryptocurrencies such as Bitcoin and Ethereum offer an alternative route for building and storing wealth. While directly holding these digital assets is a popular option, investors are also clamoring for financial products such as crypto exchange-traded funds (ETFs).

Canada first launched Bitcoin and Ethereum ETFs in 2021. These Canadian Bitcoin and Ethereum ETFs allow investors to place returns in tax-sheltered accounts like tax-free savings accounts or registered retirement savings plans.

“There is a high demand for a Bitcoin product that has all the features that people love about ETFs — that they trade on an exchange, that they’re liquid,” Ross Mayfield, investment strategy analyst at Robert W. Baird & Co., told Bloomberg in mid-2021.

Interest has only increased since then. In the US, Bitcoin ETFs’ net assets surpassed US$100 billion on November 21, gaining ground on US gold ETFs. Sean Farrell, head of digital asset strategy at Fundstrat, wrote in mid-2023 that the Bitcoin ETF category at large has the potential to surpass the precious metals ETF market in terms of asset value. ‘Bitcoin ETF eventually could become >$300 billion category,’ he stated in the note.

Ethereum ETFs have also become a major talking point. Ethereum is the most widely used blockchain technology, and Ether, the digital currency of this platform, is the second largest cryptocurrency after Bitcoin.

With that in mind, it’s worth taking a look at the currently available Canadian cryptocurrency ETFs. The list below includes 13 Ether and Bitcoin ETFs available on the Canadian market sorted by assets under management, and all data presented is current as of November 21, 2024.

1. Purpose Bitcoin ETF (TSX:BTCC)

Company Profile

Assets under management: C$3.4 billion

Billed as the world’s first physically settled Bitcoin ETF, the Purpose Bitcoin ETF launched in February 2021 and is backed by Bitcoin in cold storage. This means the fund allows investors to add and sell Bitcoin with no digital wallet required.

Hosted by Canadian investment company Purpose Investments, the Purpose Bitcoin ETF is backed by 25610.96 Bitcoins and has a management expense ratio of 1 percent.

2. CI Galaxy Bitcoin ETF (TSX:BTCX.B)

Company Profile

Assets under management: C$1.19 billion

Launched in March 2021, the CI Galaxy Bitcoin ETF was born out of a partnership between cryptocurrency leaders Galaxy Fund Management and CI Global Asset Management. Galaxy Fund Management is part of Galaxy Digital, a diversified financial services firm with a focus on digital assets and the blockchain technology sector.

The ETF’s objective is to give investors exposure to Bitcoin via an institutional-quality fund platform, as its holdings are wholly Bitcoin and are kept in cold storage. At 0.4 percent, this fund boasts one of the lowest management fees of all the crypto funds on the market.

3. Fidelity Advantage Bitcoin ETF (TSX:FBTC)

Company Profile

Assets under management: C$879.9 million

The newest Bitcoin fund on this list, the Fidelity Advantage Bitcoin ETF, launched in November 2021. It offers the security of Fidelity’s in-house cold storage services for its holdings.

While it previously had a management fee of 0.4 percent, in line with the CI and Galaxy funds, the Fidelity Advantage Bitcoin ETF lowered it in January 2024 to an ultra-low management fee of 0.39 percent.

4. CI Galaxy Ethereum ETF (TSX:ETHX.B)

Company Profile

Assets under management: C$503.35 million

The CI Galaxy Ethereum ETF, another collaboration between CI and Galaxy, offers investors exposure to the spot Ethereum price through Ether holdings in cold storage. The fund launched on April 20, 2021, the same day as two of the other Ether ETFs on this list.

At the time, CI Global Asset Management suggested that “owning Ether is similar to owning a basket of early-stage, high-growth technology stocks.”

The CI Galaxy Ethereum ETF has notably low management fees of just 0.4 percent.

5. Purpose Ether ETF (TSX:ETHH)

Company Profile

Assets under management: C$403 million

The Purpose Ether ETF is a direct-custody Ether ETF that launched on April 20, 2021. This fund holds 94065.95 Ether, which it stores in cold storage.

The Purpose Ether ETF offers investors exposure to the daily price movements of physically settled Ether tokens with a management fee of 1 percent.

6. Evolve Bitcoin ETF (TSX:EBIT)

Company Profile

Assets under management: C$342.54 million

Evolve ETFs partnered with cryptocurrency experts, including Gemini Trust Company, CF Benchmarks, Cidel Bank & Trust and CIBC Mellon Global Services, to launch the Evolve Bitcoin ETF. The fund, which holds its own Bitcoin, has a management fee of 0.75 percent.

Launched a week after the Purpose Bitcoin ETF, its holdings of Bitcoin are priced based on the CME CF Bitcoin Reference Rate, a once-a-day benchmark index price for Bitcoin denominated in US dollars.

7. 3iQ CoinShares Bitcoin ETF (TSX:BTCQ)

Company Profile

Assets under management: US$244.35 million

Launched in March 2021, the 3iQ CoinShares Bitcoin ETF tracks the price movement of Bitcoin in US dollar terms and holds its Bitcoin assets in cold storage. This ETF has a management fee of 1 percent. Figures for this ETF were accurate as of October 31, 2024, according to the fund website.

8. Purpose Bitcoin Yield ETF (TSX:BTCY)

Company Profile

Assets under management: C$149.9 million

The Purpose Bitcoin Yield ETF uses a covered call strategy to generate yield for investors, which involves writing call options on Bitcoin. Call options give the buyer an option to purchase an asset at a specific price on or before a specific date.

Its structure allows the fund to earn income from option premiums while providing investors with exposure to Bitcoin’s price movements. Its distributions are paid monthly.

9. Evolve Ether ETF (TSX:ETHR)

Company Profile

Assets under management: C$92.89 million

The Evolve Ether ETF offers investors an easier route to investing directly in Ether. The fund’s holdings of Ether are priced based on the CME CF Ether-Dollar Reference Rate, a once-a-day benchmark index price for Ether denominated in US dollars. As with the Evolve Bitcoin ETF, the Evolve Ether ETF has a management fee of 0.75 percent.

10. Evolve Cryptocurrencies ETF (TSX:ETC)

Company Profile

Assets under management: C$72.66 million

The Evolve Cryptocurrencies ETF launched in September 2021 as the first multi-cryptocurrency ETF, providing combined exposure to both Bitcoin and Ether.

This product from Evolve ETFs allows investors to diversify their crypto portfolios and provides indirect exposure to the two coins, weighing them by market capitalization and rebalancing its holdings on a monthly basis. Bitcoin makes up the majority of its portfolio.

While this ETF has no management fee, the underlying funds that hold both Bitcoin and Ether have management fees of 0.75 percent plus applicable taxes.

11. Purpose Ether Yield ETF (TSX:ETHY)

Company Profile

Assets under management: C$69.6 million

Like the Purpose Bitcoin Yield ETF, the Purpose Ether Yield ETF offers investors an opportunity to invest in Ether while also generating yield. Purpose Investments lends a portion of its Ether holdings to institutional borrowers and earns interest on those loans.

Investors who purchase shares of this ETF receive a portion of the interest earned in monthly distributions.

12. 3iQ CoinShares Ether Staking ETF (TSX:ETHQ)

Company Profile

Assets under management: C$‪52.77 million

Following the success of its Bitcoin ETF, 3iQ Digital Asset Management launched its CoinShares Ether Staking ETF in April 2021. This fund has a similar objective, offering exposure to Ether and its daily US dollar price movements. It also has a management fee of 1 percent.

Figures for this fund were accurate as of October 31, 2024, according to the fund website.

13. Fidelity Advantage Ether ETF (TSX:FETH)

Company Profile

Assets under management: C$28.2 million

Following the successful launch of its Bitcoin fund, Fidelity brought its Advantage Ether ETF to market in September 2022, making this the newest Ether ETF in Canada. Its holdings are stored in Fidelity’s in-house cold storage.

The Fidelity Advantage Ether ETF has a management fee of 0.4 percent.

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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