Why We Need a Pullback and This Week’s Top Earnings Plays

We had another huge crowd Monday for Crush the Open, so once again a big THANK YOU — you guys are awesome! We discussed a few big things, including some earnings plays for this week. But first, with the market back to party time this year, some macro tidbits…

With the market — Dow aside — ripping higher so far in 2023, U.S.-listed Chinese stocks got the party started first. 

In fact, stocks like Alibaba Group Holding Ltd. – ADR (NYSE: BABA) began their ascent back in November. But now, they’ve made almost a full retracement of their 2023 gains while the Nasdaq and S&P 500 have been steadily moving higher, Friday’s and Monday’s welcome dips aside.  

I’m not really sure what that means for the rest of the growth stocks out there, but it is interesting. With China stocks pulling back, does that mean U.S. stocks will follow the lead again and pull back? 

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To me, as far as macro numbers to watch, the jobs number is about the only one that matters to me at this point. We got 3.4% unemployment for the month of January versus estimates of 3.6%

Federal Reserve Jerome Powell speaks at 12:40 p.m. ET on Tuesday, and I expect the market to dip into that. He wants to talk the market down but the irony is he’s been talking it up. 

I know there’s a lot of bears out there licking their chops thinking they’re going to take back all of this year’s gains, but I don’t see that happening. 

I see the Nasdaq getting a pullback of 3% to 4% — which would be healthy — before bouncing hard higher. We need a bit of a pullback before we can head higher because growth stocks are up a ton, so we need a nice little pull back to get in at better prices.

And Monday’s close might be a great time to start scaling into some positions after the selling we’ve seen the past couple of days. 

There will likely be some geopolitical sabre rattling, which could be a bit of a drag on markets with this whole Chinese spy balloon thing in terms of newsbombs…

But check out Monday’s edition of Crush the Open and let’s discuss some earnings plays in Robinhood Markets (Nasdaq: HOOD), Uber Technologies Inc. (NYSE: UBER), Nvidia Corp. (Nasdaq: NVDA) and more!

Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at jeff@joyofthetrade.com with your trading questions and I may cover them in a future video. You can also join my free Telegram channel, where I share market insights real time throughout the week, articles, videos and more!

*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. 

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