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Showing Promise.

Well folks, the S&P is still showing promise after it gave the year’s record performance during Tuesday’s sell-off. Regardless, our theses on both $CENN and $DDOG as well as our overall house view still runs true albeit some updates that we will elaborate on below; as such, remember to trade with a stop loss and follow the suggested timelines of our recommendations to a ‘T’ for maximum effectiveness. Sidenote: Today also marks an important milestone in the crypto asset space as the world’s second-largest cryptocurrency, Ethereum, has completed its migration to a Proof-of-Stake (POS) rather than a Proof-of-Work (POW) blockchain. Read up further on the implications of this here.


"Politics is the skilled use of blunt objects."

- Lester B. Pearson


Market Talk

Despite Tuesday’s abysmal inflation print, the S&P is hesitant to break below 3900 points and establish a bearish price channel, in fact, more investors are bullish and less are bearish than before with yesterday’s AAII Investor Sentiment survey publicizing the below changes week over week.

That said, the S&P 500’s 38bp advance yesterday also pacified the $VIX by 5%, bringing it to a value of 26 - is the ‘buy the dip’ mentality back? We hope so. Anyways, whether we break out higher from this level will still be determined by the Fed’s next rate hike, however, the question is now between whether a 75bp or 100bp rate increase will take place (...and the likelihood of a 1% hike has jumped 25% over the last day). Panning to today, markets are unchanged ($DOW +8bps, $S&P -2bps, & $NDAQ -14bps) in the premarket following yesterday’s resurgence on tech gains.


Long: CF Acquisition Corp VI (CFVI-NASDAQ) | Timeline: 3 days

We’re back with another Coachman’s idea regular, CFVI. The highly anticipated merger vote occurs today, and our thoughts are that if successful, investors and potential investors will be able to see a newfound sense of stability within the organization. Moreover, once merged, CFVI can be valued in a similar fashion to other social media companies such as Twitter. The company’s intended merger target Rumble has shown tremendous growth in recent months, reporting 78 million monthly active users for August. From a technical perspective, this company is primed for a bullish move upward as it is trading far above both the 50-day, and 200-day moving averages, while also rejecting multiple downward moves through the 50-day. The MACD has also begun exploding upwards throughout September, with it now resting at 0.75. Additionally, the company has an extremely bullish momentum of 2.93. From our point of view, we would institute a stop loss at 5% in the unlikely event that the merger does not move forward. In this eventuality, the company would likely fall back to the $10 issuance price.


Short: Aurora Mobile Limited (JG-NASDAQ) | Timeline: 2 days

Aurora Mobile Limited (JG), a company that operates as a mobile app development service provider in China has reported a very discouraging earnings report for investors and traders as some key fundamental metrics have been torn apart due to “the recent impact of COVID-19 which resulted in a dip in demand and logistical obstacles in contract signing” (CFO Mr. Shan-Nen Bong, Source). Taking a closer look at the fundamentals, year-over-year revenue and gross profit took a hit of 14% and 21%, respectively, missing analyst expectations by 12.07% - some very worrying metrics for investors as the company enters a very uncertain second half of 2022. Turning to technicals, the stock was beaten up from $6 highs through 2021 and has not been able to recover since. That being said, the share price has consolidated between the $0.8-1.2 price range, and a descending triangle has formed - a widely used bearish continuation pattern that suggests downward momentum is building and a breakdown is imminent.


Special Bulletin: Flaring Tensions In Azerbaijan

While we’re all well aware of the ongoing war in Ukraine, another conflict within the former USSR has restarted this week. If you’ll remember back in 2020, Armenia and Azerbaijan engaged in a war for the Nagorno-Karabakh region which was eventually resolved through a peace treaty brokered by Vladimir Putin (Source). Unfortunately, this treaty has not held, and multiple skirmishes have been reported by both sides. Nagorno-Karabakh is a hotly contested region that lies within Azerbaijan but is ruled by an autonomous government. This week, 176 soldiers from both sides were killed following 2 days of heavy fighting. While as of this morning both sides have indicated that peace should be re-established, we will have to see if tensions can truly settle over the weekend.


Chart of the Day: Spread of the US 2 Year vs. 30 Year Treasuries Bonds

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