Markets whacked yet again

What stocks are setting up around social sentiment

Author

Swaggy Stocks
March 13, 2022

Swaggy’s Top Stonks. We compile and analyze data from multiple sources bringing you the top trending tickers from around the internet. If you haven’t subscribed already, please do so below.

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Today we'll go through what's been happening in the markets and introduce some new social sentiment categories that have been added to the SwaggyStocks website.

Today's Letter

  • Market Update

  • New SwaggyStocks Sentiment Categories

  • The Crypto Scene

  • Meme Stocks

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Market Update

Markets are obliterated -nothing new to see here as I'm sure you all know. Half of us have sent in our application to work at McDonald's while the other half are enjoying a loaf from the breadline. At least my dividend stocks have paid out roughly 13 cents this year which, if compounded for 3,000 years, will allow me to buy a Big Mac meal (no affiliate with McD's).

I can tell you one thing, I am absolutely not here to make 13 cents playing it safe, I've got a fetish for watching my portfolio go down by thousands of USD per day and I'm loving every minute of it. I once read on the internet that Warren Buffet loves to buy the dip, so that's exactly what I'm going to do, DCA (dollar-cost-averaging) until my portfolio either goes to $0 or I'll be sipping on the grandest of champagne's in Valhalla (by 2023).

But this DCA-ing has now become my long-term strategy, I'm a value investor after-all and right now 90% of growth stocks have transitioned from high-risk "growth" to value. The potential for compounding returns over the next 24 months has increased drastically. Would you rather buy:

  • SOFI at $20+ or currently at $8

  • PLTR at $24 or currently at $11

  • NVDA at $330 or currently at $220

  • DKNG at $50-60 or currently at $16

On a long enough time-frame these will be winners in their industry and the risk-reward might be approaching favorable. Of course, we are living in an era of potential WW3 and there are many uncertainties we are navigating through. On the flip side, if you'd purchased wheat futures, oil, or uranium at any point last year you are probably reading this newsletter from your mega-Yacht, so congrats. Here's a look at their respective charts while I shed a tear on the FOMO that I've missed.

In other news, it's that time of the month again... where we look into the Fed meeting and interest rates decision. Is the rate hike going to be the straw that breaks the camel's back and we see the SPY trade down to the $390 level (currently $420 -holding like rock of Gibraltar through this downturn), or are we going to rip the band-aid off and realize a 25 BPS hike in interest rates really isn't that bad. Heck, if we make it to a 200 BPS hike by year-end we'd still be in good shape and still very close to the glory days of the pre-pandemic times.

New SwaggyStocks Sentiment Categories

SwaggyStocks has just released a big update that includes even more categories to find stocks that you may like. Here’s a list of some of our now more popular sections:

We’ve also just added a new segment to the site that tracks retail sentiment on names that have to do with the “short-squeeze”. Alerts from unusual social volume are less frequent in this category, but as I was first building out the section names like PROG and CEI were caught early in the trend. Here’s what was gaining traction from Friday’s market action.

Digging into some names that have recently “gone off the hook”, here’s the official SwaggyStocks “Short-Squeeze” chart for Peloton (PTON). Remember, many of these short-squeeze names ride strictly on social sentiment and not any real fundamentals so any positive price action typically reverts to the mean shortly after.

What do we see in this chart? Around January 19, shares of PTON took another significant dive after an already horrendous previous 3 months. However, this drove social chatter up almost 2,000%… Something was up, and about a week later another spike in social chatter stemmed from the news that the company *may* get acquired by a bigger player. The result was a 50% increase in share price in just a few days and then a slow bleed back to new lows.

When riding momentum and the social side of stocks the shorter the trade timeframe is usually better. Of course, that’s when a stock is being hyped and making the top of the sentiment lists. Personally, I also like looking at the “anti-social volume”, meaning stocks that have previously seen positive performance from social hype, but are currently NOT being talked about. This is when I look at it from more of a long-term hold and the potential to really go off again.

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GRIT is going big or going home on the 20% of our “high-risk” portfolio where we know these investments could go to zero…or 10x! Subscribe to our new CRYPTO NEWSLETTER to follow us along this journey and see what we’re buying, why we’re buying it, what we’re paying, and what else is on our radar!

The Crypto Scene

What's happening in the crypto scene? Crypto currencies seem to be "waiting out" what happens as the events around the world unfold. Here's Bitcoin's (BTC) sentiment chart on a 6-month timeframe.

Back in November and December crypto currencies took a beating, but they have since continued into this consolidation phase. Price has now hovered around $35-40k, which isn't typical behavior. Social chatter has also been on a slow decline as excitement around any positive news has cooled off. If my experience around sentiment means anything, then typically these "lulls" are usually a pre-face for a large move waiting around the corner. Stay tuned.

In the meantime, let's check out some of the top names being discussed in the crypto scene.

Meme Stocks

The meme-sters over at WallStreetBets may depict unorthodox behavior, but they definitely know about market events more than our typical trader. This week's chatter has completely revolved around the price of oil and the CPI numbers... Oh and Tesla of course.

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