There's Blood (Battery Juice) in the Streets

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[Privacy Policy.]( There's Blood Battery Juice in the Streets Baltimore, Maryland June 04, 2024 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, All hell broke loose on the New York Stock Exchange early Monday morning as traders slammed shares of Berkshire Hathaway, opting instead to gobble up GameStop calls as meme madness returned to the markets with a vengeance. OK, that story’s not exactly true. But you have to admit this would be one of the most hilarious (and irrational) market narratives of all time. Imagine investors cratering Uncle Warren’s Berkshire Hathaway by more than 99% to follow a massive GameStop squeeze. Insanity! In reality, a glitch at the NYSE early Monday morning incorrectly showed Berkshire Hathaway and a few other high-profile stocks almost completely wiped out, which just so happened to occur right as shares of GameStop were halted for volatility following a Sunday night stunt courtesy of none other than Roaring Kitty — the GameStop trader who sparked the first meme stock rallies way back in 2020-2021. This time around, Roaring Kitty posted a screenshot of his GameStop portfolio reportedly worth more than $100 million. Of course, it’s impossible to say whether the screenshot shows his actual holdings. But that didn’t stop the meme stock crew from pouncing on shares late Sunday night using Robinhood’s 24-hour trading feature. By Monday morning’s premarket session, the stock had nearly doubled. But the momentum failed to carry beyond the first couple minutes of trade. GME opened above $40 and immediately started to sink. By midday, it was up “only” 30% — well off its early morning highs. It closed the trading day up only 21%. These fast gains are impressive when viewed out of context. But if we dig a little deeper, we see a chart that’s turning into a complete mess. Not only is GME exhausted following the Sunday night pump, but it’s also reversed well below those mid-May highs that briefly shot the stock toward $65. It’s beginning to look as if this echo bubble is already running out of juice. Less than a month ago, Roaring Kitty was able to send GME rocketing nearly 175% in just two trading days by posting a couple of memes on his Twitter/X account. Now, he’s starting to look like the boy who cried wolf as GME shares fail to build on their weekend momentum. Don’t worry — he’ll book his profits (another screenshot posted Monday evening claims he’s still “all in”). So, what about the folks who blindly followed his lead? I don’t think they’ll be too happy as they hang on for dear life this week… The trouble with these emotional trades is that we all remember the huge move that catapulted GME to outrageous heights during the first meme stock days of early 2021. Fast forward more than three years, and you’ll find desperate traders would do anything to get another shot at those epic squeezes. But lightning rarely strikes twice. Instead, we’ll have to settle for these little echo booms and busts. In fact, some of the other big tech rallies look like they could use a break as the calendar flips to June. A few semiconductors not named NVDA are starting to get wobbly. We also had the Salesforce Inc. (CRM) earnings debacle that ripped through the entire industry on Friday and caused some serious intraday volatility in tech. All the cloud computing stocks took a hit, along with semis and mega-caps. And don’t even get me started on some of these stalled-out growth names. Cathie Wood’s ARK Innovation ETF (ARKK) rolled over in early April and never recovered. It’s now down 17% year-to-date… Bottom line: With the hot summer vacation days quickly approaching and so many overextended stocks starting to settle down, it doesn’t feel like a great time to rally the retail trading troops behind a short squeeze. Instead of playing meme-stock roulette, I’m more inclined to dig for fresh breakouts among the stocks and sectors that are flying under the radar right now. [Offer Pending: Please confirm your address…]( Your name is on a list of people eligible to claim the [“most dangerous book in America.”]( We with only 500 copies left, we may run out of stock soon. So, here’s how to claim your copy: - [Click this link]( [to watch Jim's short message.]( - Review your account information. - Confirm you’d like to accept Jim’s offer. And I’ll get your copy of the most dangerous book in the mail right away. [Simply click here and learn how to claim your copy.]( [LEARN MORE]( Shining Light on Some Fresh Breakouts A funny thing happens when a down-and-out stock starts to break out… First, no one believes it. They assume the move is nothing but a dead cat bounce. The news hasn’t flipped yet, and everything you hear about the company/sector will be indifferent or bearish. But as the breakouts expand, you’ll begin to hear some bullish whispers. If the good vibes spread to the entire sector, those whispers will begin to attract more attention. That’s exactly what’s starting to happen with solar stocks. No one wanted anything to do with the solar names during the first quarter. The Invesco Solar ETF (TAN) was nearly chopped in half in 2023, and most of the most visible companies in the sector were limping into the new year at or near multi-year lows. Some of these stocks were still catching analyst downgrades as recently as January. At the time, the reasons to avoid these stocks made total sense: prices were up, installations were down, and high interest rates were crushing demand. But that was before First Solar Inc. (FLSR) broke out. FSLR suddenly launched higher in mid-May, jumping above $200 for the first time in nine months and sparking a rally that would push shares up 40% in just two weeks. All of a sudden, a stock no one wanted to own was quickly becoming one of the top momentum movers on the market… You can probably guess what happened next… The solar story quickly began to change. First, there was chatter about how Biden’s proposed China tariffs would offer a boost to the sector. Then, analysts began touting solar as an important piece of the artificial intelligence energy puzzle. In fact, UBS just highlighted FSLR as “an overlooked, direct beneficiary of increasing AI-driven electricity demand.” Now, we’re seeing other stocks in and around the sector beginning to firm up. And FLSR hasn’t given back a penny of its initial breakout, either. The stock continues to consolidate right at the top of its range, which just so happens to be in the neighborhood of its all-time highs from early 2008. Turning to the ETF, we can see TAN has been building a base for almost a year. It’s now in the early stages of breaking out. And if FSLR is any indication, we’ll see new 52-week highs from TAN soon enough (we own calls over at The Trading Desk, by the way). It’s still early in this solar narrative flip. If these stocks can power through the summer chop, we could be looking at a new leading momentum sector heading into the third quarter. Forget about the fizzling meme stocks — and don’t sleep on solar! Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Biden out June 13?]( [Click here to learn more]( A former CIA insider just announced a disturbing prediction… Biden will withdraw as the Democrat nominee on June 13. [See his shocking evidence in this new report](. [This former CIA advisor says the Dems already have Biden’s replacement – a shadow candidate hand-selected to defeat Trump] [See full details HERE now](. [LEARN MORE]( In Case You Missed It… Three No-Cost Ways to Improve Employee Morale Sean Ring, Editor [Sean Ring] SEAN RING Good morning Reader, I gave you ten steps to build your [Free State of Me]( a few years ago. (Feel free to read or reread that article, as it’s been a while.) One piece of advice is to start an online business, but many people don’t know how to do that. With that in mind, I thought I’d briefly shift our focus to microeconomics. Microeconomics deals with the behavior of individuals and firms in making decisions about allocating scarce resources and the interactions among these individuals and firms. It’s critical to understand many microeconomic concepts to run a successful business, but perhaps none more so than how to keep your employees or freelancers motivated. Daniel Pink authored a book called Drive, published in 2009. It’s not about cars but what drives us to do the things we do. There’s an [excellent YouTube video]( that summarizes his findings. I encourage you to watch it after you read this. In this Morning Reckoning, I’ll relay to you his excellent points. Just Pay People More! Not so fast! This works. Just not universally. Only in the right jobs with the right people. This is the most shocking finding among economists. For decades, the mantra was, “If you want higher performance, pay people more.” And this works for people doing mechanical jobs. That is, digging ditches or smashing rocks. However, this incentive no longer works once a job requires even basic cognitive skills. (As a former banker, I found this hard to believe. But bankers are a weird lot. Study after study replicates this finding.) Once the work task goes above rudimentary cognitive skills and into something like creativity, the motivation game changes. Innovative employees need something else: things that don’t involve money. Of course, you still have to pay people. But with intelligent employees, Pink says the trick is to pay them enough “to take money off the table.” Pay them enough so they don’t have to worry about cash. Once you’ve paid them well enough not to worry about their bills, what else do these employees need? The Three Things Smart Employees Need Autonomy, mastery, and purpose keep good employees motivated. I’ll explain each in turn. Autonomy According to Pink, autonomy is the ability to direct one’s work. Autonomy allows employees to feel empowered in their positions rather than like their success is out of their hands. Autonomous employees manage their time and decide how to do their work rather than having someone else dictate it. This sense of control gives them the freedom to be productive and engage in their job tasks. Anecdotally, one of the things I love most about my job here at the Reckoning and the Rude is that my publisher, Matt Insley, never tells me what to write about day-to-day. (Though he does give great advice, particularly about my headlines!) Mastery Pink discusses the second element of employee motivation as mastery. Mastery is the desire to get better at what you do. When employees are allowed to improve themselves and hone their skills, it creates a sense of satisfaction that leads to increased motivation and productivity. Why do people play musical instruments on the weekends for free? Because they want to master something (and enjoy their melodious tunes, too, I’m sure). When we focus on mastering a skill or task instead of just completing it, we often reach new levels of engagement and creativity that are essential for any organization’s success. Purpose Finally, Pink proposes that purpose is a crucial factor in motivating employees. When one feels connected with the purpose behind their job tasks and understands how their work contributes towards something larger than themselves, it gives them a sense of meaning. That can help drive them forward even when things seem challenging or boring. It helps them stay focused on long-term goals (rather than getting caught up in short-term frustrations) and keeps them motivated throughout the journey toward achieving those goals. Of course, purpose gets confused with wokeness sometimes. I’ve heard horror stories about developers getting hired at tech firms and immediately concerning themselves with hiring policies rather than writing code. That’s no good. Businesses must profit to stay in business. First, they must create revenue. Then, they must collect that revenue and convert it into cash. If you don’t have profits, you won’t have a business. But you don't have a business if you don’t have cash. So, the purpose and the business must intertwine to work well. Wrap Up Motivating competent employees requires more than just cash. Strange as it may sound, they need autonomy, mastery, and purpose to flourish. And this isn’t some kumbaya stuff. It’s core to a business's success and has been proven repeatedly. Motivation is an inherent part of any organization’s internal success strategy. To maximize your company’s potential, you’ll need motivated employees. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. 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