#trends 0013 : May Momentum

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Hi All,

First off, since this May issue of #trends falls right next to Sunday, I’ll skip the Sunday #watchlist post.

Now let’s talk about the S&P index. Looks like we finally broke the $4,200 mark on the S&P 500 earlier this week. But the momentum did not last long. It pulled back below after crossing it twice in fact. I’ve said it before and I’ll say it again, I need to see it stay above that mark to be fully convinced of a strong bull run in the Equities market.

In related momentum news, Vaxart ($VXRT) which I first talked about in #trends 0008 : Healthcare finally went parabolic this week. In fact, it doubled, going from $5 to over $10. The Call Options I’ve been holding on this still made out, but did not yield much as I hoped because the expiry also fell on this week. This scenario is a perfect example of why over time, I’m starting to prefer holding Shares vs. Options if you have full conviction in a company. It is so easy to get crushed with Options because time is not on your side. If I had held Shares instead, my upside would have been much better. But at least it decided to move.

Lastly, I thought I’d share an interesting ETF to add to the watchlist. Right after launching this newsletter, in my second issue #trends 0002 : Precious Metals, I touched briefly about how Water was now trading on Wall Street in the Futures market. This to me indicates that markets are expecting supply/demand problems to arise with water. I wanted to get in on this, but I don’t trade Futures. Luckily I discovered this ETF which you can trade in the normal Equities market:

• Invesco Water Resources ETF ($PHO)

  

If you look at the 5-10 year chart, you will notice this ETF has been on a constant uptrend. This makes so much sense to me because let’s face it, Water is a necessary commodity. So my point is, if we ever get a massive pullback in stocks, this is a great one to have in the portfolio that is almost guaranteed to rebound.

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🔗 Links

1. Drought-hit California moves to halt Nestlé from taking millions of gallons of water - The Guardian

2. Plucky Underdog Vaxart Still Banging Drum For Oral Vaccination - Seeking Alpha

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As always, this is not financial advice. I use this as a way to journal my thoughts and share with anyone else interested enough to want to read this, as well as for educational purposes only.