Long Energy, Short Treasuries And Tech--Revisiting Our Three Themes From July After Wednesday's Fed Meeting

In Case You Missed It

For the last few months, I’ve been writing about the big picture in the markets, as I see it: higher inflation and higher rates are bullish for energy but bearish for bonds and technology companies still trading at multiples more suited to a zero interest rate environment.

Now on the homepage. Long energy, short Treasuries and tech. A hedged bet against tech in case we’re wrong.https://t.co/7APpuCTqDc$BOIL $GUSH $TMV $WEBS

— Portfolio Armor (@PortfolioArmor) July 20, 2022

In that post, I included our system’s top names that week:

Long Energy, Short Treasuries and Tech

Our system doesn’t consider the macro picture when selecting its top names. Instead, it gauges stock and options market sentiment to estimate which securities are likely to perform the best over the next six months. Nevertheless, that bottoms-up approach painted a fairly clear picture in our top ten names as of Tuesday’s close: 

• Long Energy: ProShares Ultra Bloomberg Natural Gas BOIL, Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares GUSH, Valero Energy Corp. VLO, Comstock Resources, Inc. CRK.
• Short Treasuries: Direxion Daily 20+ Year Treasury Bear 3X Shares TMV, ProShares UltraPro Short 20+ Year Treasury TTT.
• Short Tech: Direxion Daily Dow Jones Internet Bear 3X Shares WEBS

Screen capture via Portfolio Armor on 7/19/2022.

Here’s how those top names have done as of Wednesday’s close, following the Fed meeting: our top ten was +15.95% on average since July 19th, while the SPDR S&P 500 Trust SPY was -4.04%.

So far, focusing on the big picture has paid off.