Weekly Update: The Biggest Market Trends Right Now
Good evening, and welcome to this week’s edition of Stealth Trades!
As an active investor, it is easy to get caught up in the daily or even hourly movements of the market. Sometimes I have to take a step back, switch over to weekly charts, and realign myself with the major investment themes.
Remember, institutions are buying stocks they can hold for several quarters or years. If they are steadily investing in a particular area, you will see it on the chart.
Here are a few of the biggest trends in the market right now…
Construction
Above is a chart of PKB – the Invesco Building & Construction ETF. It doesn’t take a genius to see the trend here.
The sector is up roughly 70% over the last two years and climbing.
There have been a few pullbacks along the way. Each of these occurred after bad interest rate news.
America has a major lack of housing supply. This has driven used home prices up and, in a lot of areas, made new construction the only game in town.
Rates need to come down sooner than later to keep this going. That is the only major risk I see in this sector – it will fluctuate lock and step with Federal Reserve interest rate announcements.
Here’s another one:
Gold
The yellow stuff is on the move. Gold prices are up almost 50% since the market lows in October to new all-time highs.
Personally, I think we will see gold at $5,000 an ounce in the next few years.
This breakout is 13 years in the making. And if history repeats itself, this could be the beginning of a new gold super cycle.
Silver is getting legs too…
Precious metals almost always move together so no surprise here.
Silver peaked at $50 an ounce back in 2011. Today it trades for $31.
Artificial Intelligence
This is the obvious theme we have seen play out over the last two years. AI is having its “dot com” moment and leading this market rally.
NVDA, SMCI, and several others in this space have delivered huge gains already. But there are plenty of smaller and backdoor plays into this area. One of those backdoor plays is alternative energy.
The bottleneck for AI is not computers. It’s power. 50-year-old city grids simply cannot supply enough electricity to run these massive data centers.
Big tech is beginning to vertically integrate by making their own power.
Look at the top-performing areas of the market over the last 30 and 60 day periods:
Solar. Clean energy. Nuclear.
Nuclear is an area I have been talking about for a couple months. In fact, I featured one of my favorite stocks in that group in last week’s edition of this email.
The ticker is SMR, and it is up 20% since I wrote about it last Friday.
Don’t sleep on solar either. When that sector gets hot, it can fly. Below is a chart of TAN – the Invesco Solar ETF.
The whole sector quadrupled in 2013. It did even better in 2020. If this group continues to outperform, you want to pay attention.
That’s all for now. See you in next week’s live sessions.
Best wishes for your trading,
