1 Bullish, 1 Bearish Idea With Critical Divergence in a Major Sector

*December 9, 2021*

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And from what we've been hearing, it's led to trade losses and missed opportunities. Heck, recent volatility has pushed some people to give up on trading completely...

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Critical Divergence in a Major Sector and Trade Ideas for Bulls, Bears

The market is volatile and something I don't particularly like but expected… while the Nasdaq was up 40 points early Wednesday, the SMH semiconductor index was only up 0.14% and the market is diverging.

This means we should be cautious with semiconductors right now — they rose too much too fast. We could still see upside from the likes of AMD and Nvidia, but the weaker names may start to sell off, putting further pressure on the Nasdaq 100.

The put/call ratio looks good, we're no longer above 1 and the market looks like it still has more upside to go. So I have two actionable trade ideas to share, including one for the bulls and one for the bears.

Get Your 2 Trades Here

What to Watch: Risk on vs. Risk off, Omicron and Earnings

We've seen a lot of selling the past two to three weeks, particularly among "risk on" assets like the Russell 2000, mid- and micro-cap stocks… and of course growth and tech stocks.

Many point to the omicron coronavirus variant as the catalyst, but it began before news started flooding headlines across the country.

That selling then bled into other "risk on" assets over the weekend, namely cryptocurrencies — because these markets are still open — like Bitcoin.

And there are three big things in my stock market game plan for the week...

Here's the Game Plan

"Good morning, Roger! Thank you for all your amazing videos! It's really world-class material! I learned something from every one of them, ...actually from every sentence!" German E.

The Russell 2000 index is an index measuring the performance of approximately 2,000 smallest-cap American companies in the Russell 3000 Index, which is made up of 3,000 of the largest U.S. stocks. It is a market-cap weighted index. Many investors compare small-cap mutual fund performance with the Russell 2000 index because it reflects the return opportunity presented by the entire sub-section of that market rather than opportunities offered by narrower indices, which may contain biases or more stock-specific risk that distort a fund manager's performance.

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