We had a nice three-day rally start this week with omicron fears cooling off a bit.
So where does the market go next as 2021 comes to a close? Is the Santa Claus rally once again coming down the chimney?
The simple truth is… no one knows for certain!
But that doesn’t mean we’re up a creek without a paddle…
What we can do is look at asset classes and market internals to give some direction, so let’s dig in and add some names to our New Money Crew Weekend Watchlist…
New Money Crew Weekend Watchlist: Banking on the Pullback
If we look at 20-year Treasury bonds, we can see they’ve pulled back…
Usually, money goes into bonds when there’s fear — so when we had the omicron variant spook Wall Street, bond markets caught a bid.
As more stories hit the headlines saying the strain is less severe, the flow into bonds slowed and the iShares 20-Plus Year Treasury Bond ETF (Nasdaq: TLT) pulled back.
When bonds pull back, money should go into more speculative assets like small cap stocks.
But the Russell 2000 got its booty kicked because it’s more sensitive to economic growth…
The good news for traders and the New Money Crew Weekend Watchlist is that the Russell can play catch up… And that’s a lot of room to run, especially compared to other major indexes.
There are 11 industries that make up the Russell 2000, and one of the biggest is banking.
In general, banks are trading just off of recent lows, so we want to look at names that are moving sideways and looking to break out.
What’s the worst bank in the world? For my money, it’s Wells Fargo & Co. (NYSE: WFC).
And what bank has the most potential for a big short squeeze to the upside? Well, how about that… It’s Wells Fargo!
Check out the quick video below and I’ll show you how the big traders are playing this one along with four more stocks on the latest New Money Crew Weekend Watchlist! And if you’re looking for more guidance on the hottest flow heading into the weekend, be sure to check out my Wiretap Trade Alerts strategy!
Don’t forget you can follow me @LanceIppolito on Twitter, Instagram and our YouTube channel for more trading insights and tips. And as always, you can find me right here talking stocks and options trading — and printing money — on WealthPress.com!
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