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*The following Premium Post was issued to TLS members at 9:20AM CST on February 23, 2021.*

Risk assets are actually down…but opportunity is up.

We mentioned in this week’s WMMR that the straight up, post-election market environment is likely over and the next phase will require more active risk management. Yesterday and today are examples of that. But while yesterday saw a number of big gainers in our portfolio (that actually finished slightly positive on the day), today is offering few places to hide. So what are we doing into the broader selloff? Well, the newly minted more active risk-management environment doesn’t just mean selling/protecting profits — especially into tumbling prices. Profit-taking is done into rallies which is what we have been doing over the past month. If you are able to do that, you can still buy good relative strength names into dips to support. That’s what we have been doing this AM.

Let’s start with some of our recent purchases in “hot” sectors that finally cooled off, allowing for entry points. Obviously, initial support levels did not hold, leading to tests this morning of subsequent support. But we knew that was a possibility which is why we bought only small, “starter” positions. Today, we added to those positions at subsequent support. Specifically:

We added to our position in lithium (LIT) near ~61.

We added to our position in clean energy (ICLN) near ~24.50.

After taking profits in crypto in recent days, we also added back to our allocations there:

We added to our position in our bitcoin fund (GBTC) near ~45 (near bitcoin ~45,000).

We added to our position in our ethereum fund (ETHE) near ~17 (near ethereum ~1400).

There are a plethora of other positions testing support levels. Thus far, here is what we have done:

We added to our position in biotech (XBI) near ~148.

We added to our position in software (IGV) near ~353.

That’s all for now. As always, stay tuned to our DSS posts for further developments — they provide the most current updates to our investment portfolio and outlook. We touched on many of these potential moves in today’s DSS.

If you’re interested in a daily “all-access” view into our money management approach, please check out our site, The Lyons Share. You can follow our risk-managed investment process and posture every day — including insights into what we’re looking to buy and sell and when. Plus, our Anniversary Sale is going on now!! So it’s a perfect time to join! Thanks for reading!

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*The following Premium Post was issued to members of The Lyons Share on October 28, 2020.*

Stocks following pre-election road-map…here’s what we’re doing about it.

As reiterated in all of our recent posts, including today’s DSS, our outlook in the short and intermediate-term remains the same. Specifically, our intermediate-term Risk Model is still positive and, in fact, has firmed in recent weeks with the improvement in market breadth and chart posture among broader stock indices. In the shorter-term, however, we have continued to warn of elevated risk due to concerns related to the volatility market as well as investor sentiment. For that reason, while we have been nibbling on some longs and covered 1/4 of our hedges, we have refrained from getting too aggressive in adding net-long exposure. Today’s selloff is resulting in a number of high relative strength areas testing compelling entry levels as well as a healthy increase in investor fear. For those reasons, we have kicked up the aggression.

Here’s what we’ve done so far today:

Shifted our short-term Outlook to “Bullish” for the first time since mid-September

Covered the following hedges at listed levels:

Covered another 1/4 of original Russell 2000 short near ~1555 on the RUT or ~154.50 on the IWM (i.e., sold RWM ~32.70)

Covered another 1/4 of original Europe short near VGK ~49.95 (i.e., sold EPV ~24.54)

We also increased our allocation to the following:

Small-Cap Growth IWO ~226.84

Taiwan EWT ~45.40

Copper CPER ~18.84

Software IGV ~314.90

Inverse Long Bond TBT ~15.98

We also looking to add to Mid-Cap Pure Growth RFG among others. The next compelling levels we are looking at as potential bounce areas — and, thus, a good spot to cover shorts and add to longs further — is near ~3260 in the S&P 500, ~26,250-26,500 in the DJIA and ~462 in the Value Line Geometric.

Of course, near-term risk remains, especially out to election day. Then again, it seems as if the consensus is coming around to our outlook for near-term risk into the election, followed by an eventual solid intermediate-term rally, as we saw around the 2016 election. We don’t like being in the consensus so that is one thing that gives us pause. However, it is possible that where the consensus will be wrong is if the market bottoms before the election. Our moves now certainly would welcome that development.

As always, stay tuned to our DSS posts for further developments — they provide the most current updates to our investment portfolio and outlook.

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