Enough talking, take a position

On November 11th, 2020, Tesla’s shares were priced at $400.
Now, 2 months later they are trading at $880.
More impressive is that its market cap is now $834 billion. That’s a large market cap to double in 2 months.

And while we talk about Tesla being a ‘bubble’ (insert any other adjective you care for) along with the company being worth more than 10 of the largest auto manufacturers combined, no one actually seems to talk about shorting the stock.

Incidentally, it took Apple 40 years as a public company to reach a market cap of $1 trillion (which it achieved in October 2019).

Then it only took another 10 months (by August 2020) for Apple to double its market cap.

In that time of ‘doubling’, its sales, profit and ebitda were flat.

Today, that market capitalisation sits at $2.223 billion.

January 9, 2021
by Rob Zdravevski
rob@karriasset.com.au

Extremes – Overbought Readings – Dec 30, 2020

In this edition of extremes I am seeing in the market, it’s no surprise that its dominated by securities and assets which are Overbought, such as;

Soybeans & Corn (up 50% in 5 months)
Lumber, again. (following a scorching 243% rise between Apr-Aug then followed by a 47% fall, it seen a new 81% advance over the past 2 months)
Copper (soared 70% over 8 mths)
Tin (rose 33% in 7 months)
Iron Ore (added 88% in 8 months)

While the CRB (commodity) Index and Brent Crude are yet to trade into Overbought territory, the former has risen 62% from its April lows, while the latter has produced a stunning 220% return from its $16 April lows and also has a notable weighting in the index.

Incidentally, Gold (in USD) has risen 27% over 9 months.

While I call a new commodity bull cycle, beware that the absolute time to “buy straw hats in winter”, isn’t today.

This is list is meant to tell you that the probability of going long at this moment isn’t ideal.

New buyers will need to wait.

In currency land, those Overbought versus the USD are;
NZD, CNH, KRW, SEK & SGD.

(n.b. the last time the NZD was this overbought was July 2011)

Amongst equity indices, members of the Overbought club are;
the Bovespa (up 28%), the Kospi (+ 24%), the Nikkei 225 (+19%) and the Russell 2000 has soared 27% (and has been overbought for 3 weeks).

Note: that the Nasdaq and &P 500 haven’t touched Overbought levels yet.

Reference closing prices:

Soybeans 13.11, Corn 4.84, Lumber 873, Copper 3.52, Tin 20,580, Iron Ore 158.00, CRB Index 167.80, Brent 51.70, Bovespa 119,017, Kospi 2,873, Nikkei 27,444, Russell 1,975.

(versus USD) NZD 0.7182, CNH 6.50, KRW 1,086, SEK 8.23, SGD 0.7565

December 30, 2020
by Rob Zdravevski
rob@karriasset.com.au

Current Market Extremes – Dec 15, 2020

The purpose of this list is to be cognisant in observing the extremes in the pendulums arc.

My list of extremes on a ‘weekly basis’ as of Tuesday December 15, 2020 with recent prices at time of writing are;

* my ‘weekly’ time frame tends to cover b/w 3-8 months.

Overbought Equity Indices:
KOSPI – 2,762.3
Nikkei – 26,687
Russell 2000 – 1,913.8
Nasdaq 100 – 12,462
Dow Jones Transport Index – 12,671

Overbought Currencies:
Ethereum – 583.5
Bitcoin – 19,173
CNH/USD (Chinese Renimbi)- 6.533
Korean Won – 1093.30

Overbought Commodities:
Iron Ore – 149.00
Tin – 19,700
Copper – 3.52
Soybeans – 11.54

Overbought Govn’t Bonds:
Italy 10 year yields – 0.53%
Spanish 10 year yields – (0.005%)
Portuguese 10 year yields – (0.05%)

Oversold Govn’t Bonds:
Australian 2 year yields – 0.10%

Nearly and Not Quite, Overbought:
Corn – 4.22
AUD/USD – 0.7517
USD Dollar Index (DXY) – 90.71
Brazil’s Bovespa Equity Index – 11,461
Chinese 10 year govn’t bond yields – 3.3%

……………..
While on a Daily basis (a time frame between 2-10 weeks)

Overbought:
Copper, Tin & Iron Ore
and vs. the USD;
AUD
NZD
CAD
DKK
KRW

Nearly but not quite, Overbought:
Brent Crude
Heating Oil
Lumber (again)
Nasdaq 100 (it was so, 3 days ago)

Oversold:
USD

December 15, 2020
by Rob Zdravevski
rob@karriasset.com.au