Before the Great Nasdaq Rebalance (Do This)

Everyone's trying to predict the next move for the Nasdaq as the index faces a rebalance in nine days. Here's my preferred trade on a Seattle favorite.

Saturday, July 15, 2023

Dear Fellow Expat:

We’re in an interesting period for short-squeeze stocks. Stocks like Carvana (CVNA), Beyond Meat (BYND), and Wayfair (W) keep screaming higher.

That’s what happens when momentum remains positive for weeks.

In the post-Reddit world, these names could keep screaming until the trade breaks. Wait for momentum to turn negative before you try to start shorting.

Since it’s Saturday, it’s time to look at the week ahead. Here are my observations from 30,000 feet as I reenter the air space of the Florida Republic.

On Monday, the Federal Reserve of New York releases July's Empire Manufacturing Index reading. Things aren’t going great. Economists expect the index to fall to a reading of 0.0, down from the 6.6 reading in July. Meanwhile, keep an eye on Microsoft's (MSFT) stock, as we could see the final legal hurdles fall on the company’s planned takeover of Activision Blizzard (ATVI).

The next day, banking earnings reports kick in hard. We’ll get reports from …