Republic Risk: Low Volume, Maximum Cool

This should be a pretty quiet week. Take advantage of                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Republic Risk: Low Volume, Maximum Cool]( This should be a pretty quiet week. Take advantage of [Garrett {NAME}]( Dec 26   [READ IN APP](   I’m sending this to everyone. Consider this a late Christmas gift. Sign up… before this goes to $35 a month. Once again, we have correctly called every selloff back to March 2020. These signals are remarkable. [Upgrade to paid]( Equity Index Strength Is GREEN on the S&P 500 and GREEN on the Russell 2000. Each morning, we assess the full flows of the market by measuring statistical metrics on a specific number of stocks to determine broader sentiment and the momentum trend. When these readings turn red, we focus on cash, build trades around positive sectors, or take inverse positions against indices. When it is positive, we focus on short-squeeze stocks, companies with improving fundamentals, and trading/investing around the actions of corporate insiders. Nine weeks in a row with gains? That’s the power of liquidity and ongoing positive sentiment. Please pay attention to the daily MACD of all indices, but we’re now in a situation that rivals the rally after the Fed injected trillions into the economy in 2020. Oil is back above $75, so invest in the sector confidently. I remain bullish on the refineries. --------------------------------------------------------------- Morning Notes: - Santa's sleigh, the SS-1, completed its global gift delivery at a record-breaking time this year! Thanks to its latest state-of-the-art upgrades, Santa distributed presents to all corners of the world in just 5 hours and 47 minutes, marking a new milestone in Christmas Eve efficiency. Wait till AI comes. The man will be unstoppable. - Another year of Christmas shopping significantly boosted the economy, with estimated holiday retail sales reaching a new high of $957 billion, underlining the season's important impact on global economies. Have we reached the point where all Americans realize that the purpose of marketing is to spend? Amazon Prime is in the summer. Give Americans a reason to shop, and they will. I think we should have a shopping holiday in the Florida Republic. How does April 2 sound? - An astonishing amount of milk and cookies were consumed this Christmas, with reports estimating that over 500 million gallons of milk and 2 billion cookies were enjoyed worldwide during the festive season. A reminder: GLP-1 drugs are a great investment. Novo makes Ozempic. - Maersk is gearing up to resume its shipping operations in the Red Sea and Gulf of Aden following the launch of Operation Prosperity Guardian, which allows the company to navigate back through the vital Suez Canal corridor. - Israel awards Intel a $3.2 billion grant for constructing a new $25 billion chip plant to bolster semiconductor manufacturing and increase supply chain resilience. - Bristol-Myers Squibb (BMY) has made two significant purchases over the holiday: First, Karuna Therapeutics, a neurological pharmaceutical company, for $14 billion, then this morning announcing RayzeBio for about $4.1 billion, adding to its cancer drug portfolio. These moves will help BMY continue to compete by diversifying its drug pipeline.   --------------------------------------------------------------- Dear Fellow Expat: Good morning.  I got some socks. Oh… being a dad. The good news is that I’m invested in total return funds, and you’re loaded up on great names ahead of 2024. Next week, we’ll launch our premium model portfolio, but I couldn't be more concerned. We will be conservative - like always - with stocks with great management and very low multiples. On the housing front, wow. We are in a fool’s rush to secure the overpriced American dream. October prices saw the highest gain of the year. If some Wall Street man knocked on my door and offered me a price that made me blink, he could have it. I’ll live in a Starbucks. This will be a low-volume, short week. The worst-case scenario is that you sell put spreads on Occidental.  Insider Buying and Selling in Net Dollar Amount: Why do we follow insiders? When they buy, they expect their stocks to move higher. And we like to buy their stocks… or sell put spreads when their related sector readings are green.  This market doesn’t want to slow down - and no one should be shorting it. However, the reluctance of insiders to buy, given the overbought conditions of the Russell Index and the S&P nearing a 69 reading, is noteworthy. Since no one knows their company's stock better than the Chief Executive and Chief Financial Officer, their hesitation in buying should not be overlooked.   What are the Insiders Buying? Unsurprisingly, there was another light trading session among executives on Friday, as many people had already started their holiday travels to spend time with family and friends. There weren't many significant purchases, but the most notable was by Ortelius Advisors' Peter DeSorcy, who bought $2.8 million of Sonida Senior Living (SNDA) shares, acquiring 268,630 shares at $10 each. Additionally, a director at Agree Realty Corp (ADC), a commercial real estate developer, purchased 13,335 shares at $62.44 each. This marks the fourth and largest purchase since December 11th, which includes two purchases by President and CEO Joey Agree. Here are the top 10 total buys in dollar amounts from executives, directors, and 10% owners.  Equity Sector Strength  There’s rotation from small-cap tech to energy. But the capital remains robust on the back of central bank intervention from the People’s Bank of China and the Bank of Japan. Liquidity drives markets and the money is flowing. I would say that it’s a great time to turn your attention to the merging markets with the U.S. dollar fading. Notable Earnings -  A new earnings season kicks off the second week of January.  Risk Chart of the Day As investors increasingly turn their attention to the top stocks in the market, passive ETFs, which mirror the performance of major indices like the S&P 500, have become a staple in investment portfolios. These funds are major players in stocks like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL). While this is considered a safer option, it feels like we’re putting all our eggs in one basket.  What would happen if we saw a significant downturn in these major stocks? Given their substantial weight in market indices, any negative shift could trigger a cascading market reaction, leading to a liquidity crisis. And as the chart above shows, this isn't just a concern for Wall Street. With about 58% of U.S. households invested in the stock market, directly or indirectly, the implications of such a downturn extend far beyond trading floors. If this system goes belly up, we'll likely see some pensions and other retirement funds, which often have significant exposure to these stocks, get hit hard. Stay positive, Garrett.  You're currently a free subscriber to [Postcards from the Florida Republic](. 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