This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Bob Iaccino, chief strategist at Path Trading Partners, and co-portfolio manager at Stock Think Tank.
“Be ready for an ugly January,” goes the title of Iaccino’s latest monthly newsletter. By that he means not necessarily a down move in markets, but instead plenty of volatility. While there’s been some volatility, it’s mostly been to the upside this month, with the S&P 500 up about 4%.
Over the past few weeks, Iaccino and team have been unloading long positions in stocks as their upside targets get hit, narrowing holdings to just three names: AbbVie (ABBV), Best Buy (BBY), Big Lots (BIG). Taking one, the bullish position on Best Buy is easily explained - when folks get stimulus checks, they’re likely going to go out and buy a new TV.
Turning to the new presidential administration, Iaccino is somewhat in agreement about the conventional and generally business-friendly nature of its makeup - plenty of recycled D.C. hands who have long histories of being mostly amenable to corporate interests. That said, Iaccino has gone through an early version of some tax proposals, and is seeing some unfriendly things like taxing of overseas profits, and corporate and payroll tax hikes. The likelihood that all these things pass may be rather small, but Chief Financial Officers should nevertheless be prepared to act.
Of the big news of the past few days - and that’s the outsized moves in the likes of GameStop (GME), Bed Bath & Beyond (BBBY), Dillard’s (DDS), Express (EXPR), and BlackBerry (BB), among others - Iaccino suspects it’s an old-fashioned, coordinated (and thus illegal) gamma squeeze, only with online message boards being used today.
There’s plenty more, including a detailed explanation of the gamma squeeze, yet another example of buying the rumor and selling the news, and Iaccino’s outlook for currently rallying crude oil.
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