The Beginning of the End of the COVID Stock Party

It’s the beginning of the end for the greatest stock market rally since the 1999 internet bubble. It’s time to start kicking the guest out of the house.

Nobody likes the end of the party, especially one this good. There will be anger and insults. There will be guests that try to come back to join the party.  But it’s time to start packing up and heading out.

We’re starting with the guests that have broken the 200-day moving average.

Zoom & Teledoc – thanks for all the video conference memories. But I’m sick of you. Get out.

Peloton – you kept us in shape when Gold’s Gym closed its doors. The gyms are back open and it’s time for you to leave the house.

Fastly & Equinix, thanks for speeding up my Netflix streaming when I binged 12 hours of The Queen’s Gambit.

Etsy – thanks for the handcrafted Star Wars coffee mug. I’ll see you at Christmas.

Spotify – thanks for my weekly discovery playlist that kept me sane while I worked from home. But I can’t listen to music in the office.

Splunk, MongoDB and DataDog, I don’t know what to say…I have no idea what you guys actually do. But it’s been real. Thanks for building all the cool internet sites.

It’s the beginning of the end of this party. We’ll be kicking out more guests as the party drags on and more stocks start breaking their 200-day moving averages.

And we’ll short the ones that try to come back in the door.  We’ve been on a long high and we’re nowhere near the bottom.  If you’re long the stocks on the list of kicked-out party guests, I would wait until they retest the underside 50-day or 200-day moving averages before kicking them out of your portfolio. And, if you want to short them, I would not do so now. Don’t short in the hole. Short on the rallies back to resistance.

But you do you. This is not trading advice, just education.

And, don’t forget, the party is still going in other sectors. Commodities and cyclical are still raging.  This is just the beginning of the end.

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