As of the close in New York today Ford Motor (F) shares were up 11.67% after the company announced it would nearly double production capacity to meet demand for its upcoming F-150 Lightning electric pickup truck. The price of $24.31 is a 21-year high for Ford’s stock.
Ford Motor (F) CEO Jim Farley said yesterday, December 9, that pre-orders for the soon-to-launch F-150 Lightning pickup truck are so great that it had to stop taking reservations. Ford shares were up 9.81% today, Friday, December 10 as of the New York close.
Oddly, the big sell off on Friday hasn’t created as many buys among the 25 stocks in the Dip-O-Meter as you might expect. Part of the reason is that the run up in stock prices in 2021 has been so fast that many stocks are still way above the 2021 lows. It’s hard to call Nvidia (NVDA), for example, a buy on the dip opportunity when the stock even Friday’s 3.58% drop to $315.03, is still way above the 200-day moving average at $190.81. Part of the reason is that, in my opinion, we’re looking at some negative trends in the economy, from the resurgence in Covid infections, and from inflation/interest rates/the Federal Reserve in the first half of 2022. Do you really feel in a rush to buy Disney at $148.11 after Friday’s 2.13% drop to $148.11 when it looks like park attendance is going to get slammed again by the Pandemic? Or MGM Resorts International (MGM)? Part of the reason is that existing negative trends haven’t bottomed out. Volkswagen (VWAPY) doesn’t look like a bargain at $18.50 after Friday’s selling because China’s auto market remains in turmoil, for example. Same with Freeport McMoRan Copper & Gold (FCX) on slumping global copper demand. Which doesn’t mean I’ve got nothing to recommend for buying after Friday.
Tolstoy was wrong when he wrote at the beginning of Anna Karenina that “All happy stock markets are alike; each unhappy market is unhappy in its own way.” (That’s what it says in the original Russian, I swear.) Truth is that all happy stock markets are different.
There are the long rallies from valuation bottoms that come after a disaster like the Global Financial Crisis and the Great Recession. There are the sharp quick explosive moves higher that come after the passing of a panic with less damage than expected like that after the Pandemic meltdown in the spring of 2020. And, among all the other happy markets, there are the market melt ups that come after a long bull market has already driven valuations to nose-bleed levels. Sometimes that melt up turns out to be the final blow out stage that comes before a big correction–but not always. And sometimes the melt up just drives stocks to a high where they stagnate while fundamentals catch up with prices. I believe we’re in the midst of a market melt up now. In this Special Report I’m going to outline the ways in which this “happy” market is different; give you advice on how to adapt this rally to your portfolio goals; and finally give you 10 picks for profiting from this melt-up.
This is a very tough market for Buy on the Dip investors and traders. Not, as you might think, because a market that hits a new record high just about every day doesn’t offer very many opportunities to buy on the dip. Actually a market melt up, like the one we’re now experiencing, offers a lot of buy on the dip chances. That’s because while everyone wants to hold the market’s rockets, no one want to hold any stock demonstrating any weakness. Sell at the slightest whiff of bad news–as shares of Oatly (OTLY) demonstrated today, November 15, when they plunged 20.81% on disappointing earnings and guidance for the remainder of 2021 and into 2022. (Oatly is on this Dip-O-Meter list.) One problem is that plunges tend not to last very long.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My sixty-seventh YouTube video “7 Picks for a Confused Market” went up today.
I don’t care how you want to frame the number, yesterday’s (November 10) report that consumer inflation (as measured by the Consumer Price Index) rose at a 6.2% annualized rate in October was shockingly high. The number is the kind of shock that can derail a rally or reverse a prevailing upward trend. So far, though, the market action says the upward trend through the end of the year is intact.
The dominoes keep tumbling and I think we’re now set up for one of those extremely volatile market melt ups through early January. Why do I believe that? And what’s a melt up look like? Glad you asked.
So far Ford Motor (F) is meeting the expectations I had when I added it to the Jubak Picks Portfolio on June 9, 2021. Today, Wednesday, October 27, the company raised its earnings forecast (EBITDA) for 2121 to $10.5 billion to $11.5 billion on an improved supply of chips, and strong demand for its cars, especially for the electric versions of its Mustang and F150 pickup. The company also reinstated a quarterly dividend-
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My sixty-first YouTube video “3 Picks for a Market That’s Grinding Higher” went up today.
Yes, we want to buy on the dip. Whenever we get a significant dip. (And significant to me is 5% or more in the major indexes–and 10% or more in specific sectors.) But, we need new strategies for buying on the dip that take into account the market’s valuation problem, the central bank tightening that looks to be in the cards, and the real possibility of a dip in growth below forecasts in 2022. I’ve got fouir strategies to suggest for buying in this market on these dips. And 14 picks to use to execute those strategies.
Stocks climbed today on news that Republicans in the Senate had agree to suspend the debt ceiling until December. That puts off a potential “selective” default by the U.S. government until that month. Stocks, especially those with China exposure, also rallied on news today that China’s president Xi Jinping would meet with U.S. President Joe Biden before the end of the year. The assumption is that the two leaders would be able to take some of the current tension out of the U.S.-China relationship.
