The Weekly Wall Street Wrap Up 6/19/2021

This is Vance from highfinancethoughts.com with the Weekly Wall Street Wrap Up. I’m going to update you on the most important news stories that happened this past week in the world of finance.

To start things off, the stock market experienced a tough end to the week and closed significantly down on Friday. The Dow Industrial Average was down for 5 straight days. The Dow was down 3.4% this past week. This was the worst week for the Dow since October 2020. The S&P 500 had its worst week since February, falling 1.9%. The decline in the stock market was in response to the news conference held by Federal Reserve Chairman Jerome Powell.

The Federal Reserve had a meeting to go over inflation concerns and their plans on how to mitigate its impact. Chairman Powell discussed how the Fed’s new inflation expectations are higher than they were previously. The Federal Reserve raised its headline inflation expectation to 3.4%, which is a full percentage point higher than the projection from March of 2.4%. This new expectation is thought to be more realistic than their previous projection.

Everyone’s main concern was regarding interest rates and if and when they will start to go up. This is important to know because generally when interest rates rise, stock prices fall. Chairman Powell said interest rates will stay around zero for now but increases are likely to come sooner than expected. Back in March the Fed said they weren’t planning on raising interest rates until 2024. But officials are now saying they expect to have two rate hikes in 2023.

Another big topic Chairman Powell discussed was that the Fed will not cut back on its current aggressive bond-buying program. But Powell did mention this issue was discussed at their meeting. I personally think this means the current rate that the Fed is buying bonds will decline by 2022. The overall message from the meeting seemed to be that nothing is changing now, but changes will be coming sooner than expected.

I personally think the stock market is going to experience some major downward trends in the near future. Stocks have had some incredible gains over the past 6 months and I think a lot of stocks have probably become overvalued and the market is going to be doing some price corrections with news on rising interest rates being the catalyst that drives the stock market down. I have personally started selling some of my tech stocks, like Snowflake (SNOW), Lemonade (LMND), and DoorDash (DASH), that have experienced some good growth over the past few months. I originally wanted to hold on to these and watch them grow but I worry that growth tech stocks will be some of the hardest hit if and when the stock market starts to crash. So I figured it was best to exit my position on those now and take my profit while I could.

In cryptocurrency news, Bitcoin and the crypto markets are down this week. Bitcoin is down about 1% over the past 7 days. Bitcoin and the crypto market had decent gains coming out of last weekend but then have been on a downward trend over the last few days. This may be in response to the latest crackdown on crypto coming out of China. The Chinese providence of Sichuan issued an order to crack down on crypto mining operations. Sichuan is now the fifth Chinese providence to announce crackdowns or partial bans on the crypto mining industry.

You are now caught up on all the latest finance and investing news. Follow me on Twitter @VanceAlm where I tweet about investing and finance every weekday. Don’t forget to like and share this video. Keep investing wisely!

Photo by Rafael Saldaña from flickr

Investing 101: Reading Price Graphs and Candlestick Charts

Reading stock and cryptocurrency price charts is one of the most basic fundamentals of research you can do when looking at what to invest in. Doing this simple task can help you understand a little bit of the history behind a company or asset that you’re looking at investing in. Stock and crypto charts simply show the price of the asset over time. I want to go over some of the basics behind reading price graphs and especially candlestick charts.

The most common type of chart you will see when looking at stock and crypto prices is a line chart. The horizontal axis of line charts represents time and it can be adjusted to show time in minutes, days, months, or years. The vertical axis represents price, generally in US dollars. The points on the chart represent the price of the asset at the end of the selected time frame, for example the prices on stock charts usually show the price at the closing bell or end of the trading day. If you’re looking at an hourly chart, the price shown is the price at the end of the hour. The points are then simply connected with a line which provides an easy way to visualize price changes over time.

Directly underneath these line charts, you will often see bar charts that display the asset’s trading volume. These bar charts represent the total number of shares bought and sold during the specific time intervals. This volume shows you the trading activity going on with the stock or crypto. Green bars generally show more buying was occurring during the time, while red bars mean there was more selling happening.

Like line charts, candlestick charts show the price of an asset over time, but they also show some extra information. Candlestick charts show the high, low, opening, and closing price for the given time intervals. The main part of the candlestick is called the “real body”, and the lines above and below the real body are called the “shadows” or “wicks”. If the open price is higher than the close price, the candlestick is red or filled black. If the close price is higher than the open price, the candlestick is green or shaded white.

Traders often prefer candlestick charts because it shows more of the market sentiment regarding the price of an asset. Traders try to predict the direction a price is going based on different candlestick shapes, especially when the wick is long on either end. This strategy looks for a bullish pinbar, which has a long bottom wick underneath the candlestick and is often thought to indicate the price will go up in the short term. The opposite of that is a bearish pinbar, which has a long top wick above the candlestick and is thought to indicate the price will go down.

I personally like using candlestick charts when trying to determine the ideal time to invest and buy in. The strategies used for reading charts aren’t exact, but they can definitely help. What are your thoughts on strategies for reading charts? What type of chart do you prefer? Leave me a comment and let me know. Follow me on Twitter @vancealm where I’m constantly sharing information and articles about investing and finances.

Photo by Maxim Hopman on Unsplash

The Fed’s Stance On Inflation, Interest Rates, And What It Means For You

Everyone has been waiting to hear the Federal Reserve’s thoughts regarding inflation and their plans to counter it. The biggest question on everyone’s mind was whether or not the Fed is planning on raising interest rates. On Wednesday, 6/16/21, Federal Reserve Chairman Jerome Powell made a very important announcement regarding the central bank’s thoughts regarding inflation and how they will address it.

Many people feel that the Fed has been downplaying inflation and the affects it is having on the economy. Today was a little different because Chairman Powell discussed how the Fed’s new inflation expectations are higher than they previously were. The Federal Reserve raised its headline inflation expectation to 3.4%, which is a full percentage point higher than the projection from March. This new expectation is thought to be more realistic than their previous projection.

The biggest news from Chairman Powel was that the Federal Open Market Committee will keep benchmark short-term borrowing interest rates near zero percent. This is important to know because generally when interest rates rise, stock prices fall. Interest rates obviously can’t stay near zero forever and officials indicated that rate hikes could come as soon as 2023, which is a year soon than the Fed’s previous statement in March that it saw no increases until at least 2024. Powell also said the Fed will not cut back on its aggressive bond-buying program but did mention this issue was discussed at their meeting.

Powell mentioned many positive trends in the economy that the Fed has been tracking. Household spending is up. Average pay is up. Unemployment is down to 5.8%. Unemployment is expected to be down to 4.5% by the end of this year, and down to 3.5% at the end of 2023. Powell also noted that excessive spending from the excitement of reopening the country is helping to drive up consumer prices, which adds to inflation concerns but this extra consumer spending is expected to come down in the near future.

Fed Chairman Powell reiterated the fact that the central bank will do everything they can to help the economy recover from the impacts of the pandemic. He also reaffirmed that interest rates will not rise until certain goals are met regarding unemployment, inflation, and other factors. Powell discussed how the increased inflation currently being experienced by the market is temporary and the long-term goal is still 2%.

That was all the highlights from today’s news conference from Federal Reserve Chairman Jerome Powell. I think it was nice to see the Fed raise their inflation expectation because it’s more realistic to what we are seeing in the markets, especially with the prices of real estate, commodities, and raw materials being so high. What are your thoughts about today’s announcements from the Fed? Leave me a comment and let’s have a conversation. Don’t forget to follow my Twitter @vancealm where I post about investing and finances every weekday. Invest wisely!

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The Wall Street Weekly Wrap Up for 6/11/21 (Video)

The Wall Street Weekly Wrap Up is where I’ll be discussing the major news and events happening in the world of finance. I’m going to keep you informed on everything you need to know and update you on the events of the past week, all within a short 3 minute video.

This week, I discuss: the S&P 500 hitting its new record closing price; the downward trend in meme stocks; the FBI recovering half of the Bitcoin paid in the Colonial Pipeline ransom; and the 401(k) provider company ForUsAll Inc. giving retirement plan investors the option to invest in cryptocurrencies. Don’t forget to check out my website highfinancethoughts.com to learn more about investing and finances.

Wall Street’s Weekly Wrap Up 6/11/21

The stock market had a rollercoaster of a week but ended Friday afternoon on a positive note. The S&P 500 rallied this afternoon to set a new record price of 4,247.44 at the closing bell. The Dow and NASDAQ both also ended the day in positive territory.

Meme stocks had a meltdown this week. After some incredible gains over the past two weeks for meme stocks like AMC (AMC), GameStop (GME), and Bed Bath & Beyond, most of the hot meme stocks ended the week down from their earlier highs. But all of these meme stocks are trading much higher than they were prior to the WallStreetBets crowd pumping these stocks up. Some financially stable companies like Wendy’s and Clover Health received some unexpected attention from retail investors as the meme stock revolution moved focus away from AMC.

Earlier this week, the FBI recovered a little more than half, or approximately $2.3 million of the Bitcoin ransom that was paid to individuals in the criminal hacking group DarkSide. Joseph Blount, CEO of Colonial Pipeline Co., told The Wall Street Journal that the company paid hackers the $4.4 million ransom because the extent of the intrusion was unknown along with how long it would take to restore operations. The news that the FBI was able to recover part of the ransom caused the price of Bitcoin to fall on Tuesday and Wednesday. People have always assumed cryptocurrencies were untraceable but using the blockchain and the public ledger actually helped confirm the FBI’s investigation. This fact may have scared some shadier investors but I’m sure it was actually something institutional investors liked hearing and knowing there are ways to recover stolen cryptocurrencies.

In other Bitcoin news, the 401(k) provider company ForUsAll Inc., will start a new program in July which will let workers in the retirement plans it administers to invest up to 5% of their contributions in the leading cryptocurrencies through Coinbase. This is a huge step for institutional adoption of cryptocurrencies. People are curious about crypto and they want to invest in it after seeing its incredible growth over the past year.

I know the S&P 500 hit a record closing price, but I feel that inflation concerns and the inevitable rise of interest rates is going to cause a big downturn in the stock market soon. Popular meme stocks appear to be on the decline, does that mean some other stocks will start to be pumped like Wendy’s and Clover Health did? Bitcoin seems to be gaining traction with institutions in the US and I think this is the time to buy because I believe cryptocurrency prices will have a nice rebound soon from their current slump.

Those are my thoughts anyways. What are your thoughts? Leave me a comment below. Don’t forget to check out my YouTube channel, Vance Alm, where I post videos related to investing and finances.

Photo by Sophie Backes on Unsplash

More Investing Terms & Phrases (Video)

This is a continuation of my last video: “Stock and Cryptocurrency Investing Phrases Defined” https://www.youtube.com/watch?v=cFDdL…

In this video, I give you the quick definitions for the following:

Meme stocks: A meme stock is any stock that experiences excessive trading volume from retail investors who have targeted it on social media, especially the Reddit subgroup WallStreetBets. Examples are AMC, GameStop, BlackBerry, and Bed Bath and Beyond.

Retail investors: are simply regular people who are non-professional investors. Retail investors usually invest less than institutional investors and hedge funds. Examples are you and me.

Apes: dedicated meme stock investors. The term originated from a meme based on the movie “Planet of the Apes”.

#NotLeaving: popular hashtag with meme stock investors and the ape community. This comes from the movie “the Wolf of Wall Street”

Naked shorting: the illegal practice of short selling shares that have not been actually confirmed to be available or even exist. Normally, traders must actually borrow a stock or determine that it can be borrowed before they short sell it.

Brokerage companies: A brokerage company primarily acts as a middleman to connect buyers, like retail investors, and sellers, market makers, to facilitate a transaction. Examples are Robinhood, Webull, Fidelity, and Charles Schwab.

Market Makers: aka brokerage houses. They buy and hold large quantities of shares to sell to the market. Examples are Citadel, Goldman Sachs, Credit Suisse Securities, and Susquehanna Capital Group.

Hedge fund: a limited partnership of investors that uses pooled investment funds to utilize higher risk trading methods in hopes of making large profits. They typically require a large minimum investment to join a hedge fund. Examples are Bridgewater Associates, Renaissance Technologies, Tiger Management, and Two Sigma.

Blue-chip stocks: refers to established companies that have a long history of good earnings, stable dividend payments, and a solid balance sheet. This term is thought to have come from blue gambling chips which are generally the highest denomination of chips used in casinos.

Commodities: raw material that can be bought and sold. Examples of commodities include agricultural (wheat, soybeans), metals (gold, silver), and energy (oil).

Volatility: refers to the price movements of a stock or the stock market as a whole. Highly volatile stocks or cryptocurrencies are those with extreme shifts up and down within short periods of time.

Hopefully you have a better understanding of these popular terms and phrases. Don’t forget to like this post and leave me a comment.

The Meme Stock Revolution is Growing

AMC Entertainment and GameStop have been the main companies in the spotlight for the meme stock revolution that is currently unfolding in front of our eyes. But there have been quite a few other companies that have experienced similar rises in their stock prices thanks to Reddit, WallStreetBets, and the Ape revolution. The fast-food restaurant chain Wendy’s has become one of the latest companies to have the spotlight on it and experience a meteoric rise in their stock price.

BlackBerry, Workhorse, Sundial Growers (SNDL), and Bed Bath & Beyond were all meme stocks involved in the original short-squeeze events that happened at the end of January and beginning of February this year, 2021. GameStop led the way during this time in January because was in the news the most for having the largest jump in price. GameStop (GME) was trading around $17 at the beginning of the year in January and experienced an incredible meteoric rise that saw its peak price of $347 on January 27th. The price experienced an immediate drop in price and by the end of the following week, it was trading around $60. Like GME, all of these meme stocks saw explosive growth followed by an immediate drop in price but they have all been trading much higher than they were prior to the January short-squeeze.

The fast-food chain that’s home to the Frosty and Baconator, Wendy’s (WEN), and Clover Medical (CLOV) are the newest companies to be added to the meme stock watchlist. Unlike its fellow meme stocks, Wendy’s has not really been struggling and has enjoyed a fairly stable stock price. According to Yahoo Finance, Wendy’s only had about 4.64% of its outstanding shares being sold short. This counters the meme stock norm where they have been the targets of hedge funds short selling and trading options on them betting that their stock prices will go down.

This recent retail investor revolution has done more than make some people a lot of money. This fight against the hedge funds for their extreme short selling of companies has exposed the prevalent problem on Wall Street of naked short selling and synthetic shares. Both of these practices are illegal, but it has become apparent that Wall Street has been doing it anyways. Naked shorts and synthetic shares involve a big bank or brokerage, like JP Morgan or Robinhood for example, selling “borrowed” shares before they have actually located and borrowed the shares to sell. When this happens, the sellers are making money off shares that do not actually exist, or synthetic shares.

I think it is awesome how the retail investor community that refers to themselves as Apes, has not only fought the hedge funds and won billions of dollars away from them, but they have exposed this illegal practice. What are your thoughts? Leave a comment below.

Photo by Batu Gezer on Unsplash

Investing 101: Stock and Cryptocurrency Terms and Phrases Defined (Video)

This is the video version of my blog post where I defined some popular investing terms and phrases. The video can be accessed through the YouTube link above, or you can find my original blog post here. Thank you for checking out my website and don’t forget to subscribe to stay up-to-date on all the latest news and information regarding stocks and cryptocurrencies.

Wall Street’s Weekly Wrap Up 6/4/21

This was a particularly crazy week on Wall Street as the meme stock revolution was in full swing. At the heart of the revolution is AMC (AMC). The meme stock revolution really took off back in January when GameStop was the subject of extreme short selling by hedge funds. At that time, the Reddit subgroup WallStreetBets noticed GameStop had about 140% of its shares being shorted (more shares were shorted than actually existed). WallStreetBets and a user named Roaring Kitty worked on spreading this knowledge and encouraging regular retail investors to buy up shares and force hedge funds to pay much higher prices when they were margin called and had to pay back the shares that they borrowed on contract (options trading).

This same scenario was played out again this past week, but with AMC being the focus this time instead of GameStop. AMC was trading around $10 per share over the last few months but became the focus of the meme stock revolution starting last week, and its price began its meteoric rise. AMC started out last week, 5/24, trading around $13 per share and it quickly doubled in price to end Friday at $26 per share. AMC’s value peaked on this past Wednesday when it reached $69.29 per share, and it has been on a rollercoaster ride since then, and it’s currently trading around $47 at the time of writing this.

In cryptocurrency news, Miami, FL, is hosting the 2021 Bitcoin Conference on 6/4-6/5. This is the largest Bitcoin/cryptocurrency meeting ever. Speakers include Ron Paul, Senator Cynthia Lummis, Michael Saylor, Jack Dorsey, Tony Hawk, and Nick Szabo. A noticeable person missing from this list of speakers is Elon Musk, although considering his recent negative comments and tweets about Bitcoin it’s no surprise that he wasn’t invited. His response was to tweet the image below.

Tweet by Elon Musk

What are your thoughts on AMC and the meme stock revolution? What do you think about the 2021 Bitcoin Conference and Elon Musk’s most recent tweet about Bitcoin? Let’s have a conversation and leave me a comment below.

Investing 101: Stock and Cryptocurrency Terms and Phrases Defined

As I was writing my last blog post about options trading, I realized that there are a lot of investing terms that people might not be familiar with. Plus, the Reddit subgroup WallStreetBets has popularized many newer phrases and terms that might need some explaining. In light of that, this blog is going to be a little different and I’m going to simply give you definitions to some investing terms that you might need some clarification on.

Short Selling: an advanced investment strategy that speculates on the decline in a stock’s price. Short selling is started when the investor opens a position by borrowing shares of a stock that they believe will decrease in value. The investor then sells these borrowed shares to buyers willing to pay the market value of the stocks. The trader is betting that the stock price will continue to decline and they can purchase them at a lower cost when the time comes to pay back the shares. Short selling can generate profits but it can also cause potentially limitless losses if the prices sky rockets (like it did with GameStop and AMC).

Diamond Hands: investors who are ready to hold a position until their end goal is reached, despite potential risks and losses. (I’m currently diamond handing Bitcoin until it rises above $60,000 again.)

Paper Hands: investors that sell early due to negative news or the pressure of the situation.

HODL: “Hold On for Dear Life”, derived from misspelling the work “hold” as in a buy-and-hold strategy.

Bag Holder: someone who purchased when a stock or cryptocurrency’s price was high and holds the stock or crypto that has fallen in value and keeps holding, believing the price will recover.

Tendies: derived from chicken tenders, it means profits or gains.

To the Moon: phrase used to express confidence in the performance of a chosen stock or cryptocurrency.

Bull Market: a financial market that is on the rise and where the conditions of the economy are overall favorable. Bull markets generally see a sustained increase in stock prices.

Bear Market: a financial market that exists in an economy that is receding and where most stocks are declining in value.

Let me know if there are any other terms or phrases you want me to clarify or define. Don’t forget to like this blog post and follow my Twitter where I post investment news and articles every weekday.

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