Market Talk
Market Silly Season
Well folks, I nearly skipped this update, with markets already rattled by midterm politics, wars, and rising energy costs.
Add to that the never-ending news cycle and financial pundits offering this strategy and that, often contradicting one another.
Sector rotations between energy, technology, consumables, and financials can cause one sector to drop precipitously while another jumps higher like a rabbit.
We've seen this in the multiweek selloff in chip stocks, while consumable stocks offering higher dividends attracted investors seeking refuge from risk in the comfort of dividends.
However, in these fickle times, when people seem to have no firm conviction in anything but self-preservation, nothing appears totally "safe."
Even gold and silver are hardly safe from near-term trading volatility. And the miners? They seem to be little more than pawns in the hands of fancy-pants money managers in New York City.
Without attempting some grand explanation for all of the above, I'll just call the effect "Market Silly Season."
And when it comes to my money, I'm not getting too silly.
I'm holding more dry powder while maintaining some small "test positions" in stocks I believe are worth watching.
Why? Because certain stocks have characteristics that could allow them to stand out, and even outperform the broader market, if they perform as they appear to be "set up" to do.
That said, I'll follow my instincts with a "not too much, if any" approach to stocks that keep meandering within a trading range, with little market conviction behind them just yet.
It's also up to these companies to answer market doubts by actually performing. And when they do, they need to provide clear guidance that doesn't spook investors into suddenly pulling the rug out from under their stocks. Good earnings alone aren't enough if management then undermines investor confidence with ambiguous or vague guidance.
After all, stocks worth watching don't necessarily require buying shares. Some aren't ready for that just yet. Others might merit buying just ONE share as a small test position in a Market Silly Season where conviction is hard to find in much of anything.
Here at the Jones Report, I've presented no personal illusions that this market can be trusted not to suddenly fall into corrective territories. That is exactly why we say maybe 'some' and 'not too much,' and even just one share at a time, over time — if any.
With that preamble behind us, let's venture into the choppy waters beneath the ever-changing skies of Stock Talk...
Stock Talk
Let's start with an example. Take Lam Research (LRCX).
Lam reported strong earnings, but management then raised concerns about "supply chain constraints" without clearly explaining what those constraints were or their potential impact. The stock took a hit, dragging much of the semiconductor sector with it.
Good earnings followed by vague corporate doublespeak. Not exactly a confidence builder in an already nervous market.
And that's the problem with this market. Investor conviction is so fragile that even strong earnings can't protect a stock when uncertainty creeps into the conversation. Traders seem to be looking for reasons to sell rather than reasons to stay.
I first highlighted Lam and its excellent prospects here at the Jones Report when it was trading in the $60s. Now it's just a small "test position" of ONE or two trading shares to keep the "feel" of the trading action.
After last week? Dang, glad it was just a test.
So watching stocks, perhaps holding a few small test positions while keeping more dry powder, is one way to survive Market Silly Season. Especially if mounting economic pressures and world conflicts add up to a more serious market correction.
Ultimately, it's up to you, as traders and investors, to study the possibilities and choose your own course.
For the Jones Report, I'll continue watching a list of prospects that I believe have the potential to outperform over time.
SKM — Holding some shares. Watching a potential catalyst associated with a future Anthropic IPO.
GFS — Semiconductor plants in the US and global presence. The "chips of everything."
NVTS — California-based power semiconductor designer collaborating with NVIDIA on data-center power efficiency and advancing electrical grid technology.
LRCX — Watching. Perhaps a small test position.
KLAC — Watching. Perhaps a small test position.
KMB — Consumer staples company offering a dividend.
MO — Consumer staples/tobacco company with a good dividend and growing smoke-free products.
KGC — Gold miner subject to Wall Street whims. Just watching.
HL — Silver miner. Just watching.
ONCY — Speculative biotech penny stock. Holding just 1,000 speculative shares, with some guarded conviction. The stock is trading under a buck, and I'm awaiting initial colorectal cancer (CRC) trial data, with hopes of seeing a repeat of the encouraging results from the earlier, smaller REO-022 CRC trial. For more on the potential, see previous Jones Reports.
SKM — Holding some shares. Watching a potential catalyst associated with a future Anthropic IPO.
GFS — Semiconductor plants in the US and global presence. The "chips of everything."
NVTS — California-based power semiconductor designer collaborating with NVIDIA on data-center power efficiency and advancing electrical grid technology.
LRCX — Watching. Perhaps a small test position.
KLAC — Watching. Perhaps a small test position.
KMB — Consumer staples company offering a dividend.
MO — Consumer staples/tobacco company with a good dividend and growing smoke-free products.
KGC — Gold miner subject to Wall Street whims. Just watching.
HL — Silver miner. Just watching.
ONCY — Speculative biotech penny stock. Holding just 1,000 speculative shares, with some guarded conviction. The stock is trading under a buck, and I'm awaiting initial colorectal cancer (CRC) trial data, with hopes of seeing a repeat of the encouraging results from the earlier, smaller REO-022 CRC trial. For more on the potential, see previous Jones Reports.
In Closing
This market feels like it's safer with more on the sidelines, perhaps smaller test positions, and more dry powder during Market Silly Season.
But markets can change, sometimes quickly. Just one major catalyst, such as a potential Anthropic IPO, could change the tone for technology stocks for the better.
The future remains to be seen.
Stay watchful.
- Jones Report
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More later so ....Stay tuned, if you dare!
For now, we close by noting that any view on the market and stocks on any particular day may change in the days to come. That is why we watch and see how our views match up with reality. Looking ahead a few months may be a way to do things - but thinking too deeply about world events and the recent alliances forming, can make projecting ahead a dicey endeavor.
All in all - we use the word maybe "some", not "too much" and play it accordingly. Never get arrogant in our notions because things do change - and individual stocks are subject to many factors outside our control. So, we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
ALL in my humble opinion, scroll down and read more. This site does NOT make Buy / Sell recommendations.
