The 3s Report (public version)

From timely to timeless, the 3 most important points we can make about stocks, bonds, ETFs, markets and investing...updated weekly

Nov 12, 2024

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ROAR Score weekly update

Our "Reward Opportunity and Risk" (ROAR) score remains at 20 for the 6th straight week. This means a 2-ETF portfolio that can only be allocated to SPY and BIL would be 20% SPY and 80% BIL.

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3 Quick Thoughts on markets

Isn't it amazing what can happen in the investment markets in just a week? At this time last week, I wrote I firmly believe that the stock market particularly has been like a “coiled spring” leading up to this week. But neither I nor anyone else knows what that will occur next. Now we know. Stocks up (evenly, not just the Magnificent 7), long-term bonds down. A nice week, following a bit of a logjam since July, in part due to concerns about the election. I suspect it was about whether it would provide clarity than who would win. First market reaction: total clarity but not long-term clarity. More on that below.

Data by YCharts

This is either a stock market melt up on hopes of a new era in American competitiveness and fiscal responsibility, or a sugar high that will flame out badly. There are degrees in between, but I suspect the more "binary" outcome is likely.
And frankly, I would not be surprised to see SPY fly, then dive, all within the next 3-6 months.

3 ETF (or index) charts I’m watching

Bit-O-Honey!

At 88,000 as I write this, Bitcoin is about 14% away from 100,000. Amazing to some of us, but "had it all along" to crypto bros and other ardent fans. This is the ETF symbol BITO, which I use for 2 reasons. It has a longer history than the Bitcoin ETFs, so easier to chart. And, it has options on it, and most of my crypto work is via trading accounts. I'm not a Bitcoin long-term investor, at least not to date.

As I pointed out a couple of weeks ago at the previous location for this blog, the chart of Bitcoin-related ETFs looked better than anything else I saw. It took the presumption, then realization of the election results to power it higher, but the lesson to me is one I see all the time: technical analysis doesn't predict the future, it evaluates when investment risk is high or low for the reward we seek. Because again, reward is ALWAYS in play. In this case, the chart told the story of a fairly low-risk development, which set up BITO and others like it for a massive move in a flash. Now what? Risk is higher now, but I wouldn't bet against animal spirits lifting it to 100k and at least a bit beyond.

S&P 500: what's up (or down?)

Bonds...interesting bonds