TG Watkins – Continuing To Play The General Markets With Short-Side Strategy
TG Watkins, Director of Stocks at Simpler Trading and editor at the Profit Pilot website, joins us to discuss why he is still trading these markets from the short-side. Despite the rally that some of the general equities have made when looking at the NASDAQ or S&P 500, he is seeing some false long relief rallies up to resistance, and is looking to see many equites pullback again down to their 50 day moving averages. This is true whether looking at the transports, and shipping stocks, or even index leaders like Amazon, Apple, and Tesla, where he notes his Moxie indicator is still not constructive and that we are just seeing inverse trampoline moves up to higher levels, but that we’ll likely still see more corrective action.
We moved over to the precious metals next, where TG is seeing similar inverse trampoline moves higher recently in gold via GLD and in the gold miners via GDX, so while bullish more medium-term, he believes we could still see some pressure in the sector. TG is a bit more constructive on the energy sector though with nice moves higher in natural gas via UNG and oil via USO, although, even those look ready for a rest from his perspective.
We wrapped up by reviewing the macro factors showing weakness under the surface of the general markets, from slowing GDP growth, higher inflation metrics, and a Fed rate hiking cycle, and when combined with higher energy prices he sees the potential for even a recession about year off, but believes we could see a corrective move in the general equities, followed by a big rally in stocks, and then the final capitulative move after that, catching many traders wrong-footed.