The only Tax loss harvesting stock candidate I'm buying this year

A sector more unloved than Energy!

Nothing really of interest happened this week outside the fed, which I’ve talked about already. PCE came in slight under expectations but still not nearly low enough to put a near term cut back on the table. It does put the idea of a 3rd cut for 2025 back into play, and we saw that most clearly with a big move up in the long end of bonds (lower yields). That took some buying pressure off the dollar, and coupled with MOPEX and the huge oversold conditions allowed a broad move up on Friday. With over 80% advances it was a nice move, but not enough to be notable unless we get another day like today (80%+ advancers) on Monday. Otherwise it was just a meaningless bounce as we head lower.

The only other thing to keep an eye on is who’s leading/declining post FOMC. If you discount the first half of Thursday’s session as the market still digesting what happened during the Powell press conference, the market is very obviously unsure what to do next. Commodity stocks rallied, then flatlined. Bond proxies and the long end rallied early Friday, and then flatlined. The only thing that we can confirm is that leadership of the last six weeks is starting to roll over. Tesla finished Friday red, bitcoin threw up, and even some quantum garbage couldn’t make new ATHs today. Yes I know some stuff is still flying, but its not flying as hard or as aggressively as it did prior to the fed meeting.

Telsa/btc rolling over might be short term bearish, but we cannot have a sustained uptrend with Tesla/btc as leadership for long (multiple quarters) periods of time. That is, unless something major inflects in Tesla’s earnings/growth potential. While momentum can drag us higher, momentum cannot sustain rallies unless there’s earnings and revenue growth alongside the move up. Even if the top line index moves down, if Tesla continues to underperform it to the downside by 3 - 5% consistently for a few days/weeks, that will start building out the broad bullish base under the surface that would power us higher.

Besides that, it’s going to be a quiet next two weeks, as most of the street is away from their desks. Don’t expect a lot of intraday vol as the market will make most of its moves at open and close and barring headlines, just sit the rest of the time. The forced end of year selling is over as we’re done with tax loss season.

This provides retail traders an opportunity as there are some tax loss harvesting candidates that have been sold to dirt cheap valuations, one that will be bought back in the new year by many of the same funds that sold out of them. If I’m right, hopefully higher.