3:35 PM EST

Markets continued to take a dive further to the downside today, with the Dow Jones down 1.2%, Nasdaq down 1.07%, and S&P500 down 1.3% at the time of this posting. However, we've come far off the lows of the day: at one point earlier today, the Nasdaq was down nearly 5%. If we manage to close at this prive level, the daily candlestick chart would produce a hammer, suggesting a near-term bottom has been put in place as buyers could find those lower prices attractive. 

At the depth of the sell-off earlier today, we made multiple trades. We would like to provide you a quick overview of what we did. Please take a look at the stocks we bought and sold today. As the day goes on, we will provide some reasons why we bought/sold each name, so please check this space later today.

4:00 PM EST

During the depth of the sell-off, when the Nasdaq was down 5% for really no identifiable reason that presents as systematic risk, you want to be net buyers. When we say systematic risk, we mean severe, serious events that bring the world into recession. March of 2020 presented a systematic risk event, with the world all going into lockdowns with many people dying of Covid. Today there is no such systematic risk. As we've told subscribers multiple times in recent days, the market is going down because it is in the process of pricing in interest rate hikes. This does not pose a systematic risk to the economy. You have to believe that the economy was going into a recession to have seen the selling earlier today (Nasdaq down almost 20% from all-time high).

Even though you do see some sells in our portfolio today, we were net buyers, meaning if you sum all of our trades up, we put more money into the market that we took out. We want those sells to be viewed as changing out "damaged stocks" with those of higher conviction (higher return expectations). Let's discuss those sells.

Selling Disney (DIS) Altogether

We wrote late last year about our willingness to endure the pain in Disney for better days in the future. Given what happened on Friday and continued on earlier today, we now declare that we've given up on Disney. On the fundamental side, Disney was dragged down when Netflix reported that streaming service is getting tough this year. On the valuation side, Disney has always been an expensive stock because of it being America's most iconic brand, so we couldn't say we own Disney for the value. On the technical side, earlier today, Disney's stock looked horrible, and too us, the road to recovery was very rough. Given those three reasons, we parted ways with Disney in order to allocate our capital into another Covid-recovery name which is Boeing.

Selling Danaher (DHR) Altogether

This was a very short relationship. We only started Danaher a couple weeks ago, with one technical thesis in mind which was the 200-day Moving Average. Shares have recently lost such major support, and since this is only a starter/small position, we've decided to take the position off altogether. We believe the capital and our conviction is better spent with Eli Lilly.

Cutting Our Nucor (NUE) Position In Half

We have had a long-standing relationship in this steel-maker, but the recent price action and therefore technical aspect of the stock has forced us to cut the position in half. Shares have lost the 200-day Moving Average, something it has not done in a very long time. It is important to note though that our fundamental view in Nucor has not changed, and we still believe this stock has great value (under 10x forward earnings). We are willing to get back in once shares bounce back above the 200-day MA.

Adding To Ford (F)

We will write a very detailed post tomorrow morning about Ford. Long story short, we believe the price has come for us to return our strong conviction to Ford again. Shares have moved ~25% off from recent highs for really no company or sector-specific reason, unlike Disney which saw some sector weakness. By buying here, we're adding back the shares that we sold higher.

Adding To Wells Fargo (WFC)

We were offered an opportunity to add to Wells Fargo earlier today, as shares traded well below levels before it reported a stellar Q4 2021 (see write-up here). WFC reported on 14th Jan 2022, closing the day at $58/share. Earlier today, shares were trading at ~$52. If you have been following us long enough, you know we love these opporunities: being able to buy at lower prices than where the company reported good news, and the lower prices were driven not by company-specific news, but by market-wide move. Over the past few days since WFC reported, nothing new has occured for the company. What we have was a broad market sell-off, in which almost every single stock was beaten down.