Following the big banks' strong earnings announcements last week, I can say that American Express and defense industry stocks also announced strong earnings. Two of the defense stocks surged to new all-time highs, while the other two didn't receive much of a premium from their earnings, but subsequently followed the market trend. They are thematically strong, and as long as the indices don't fall, I think they deserve to be allocated, even if they don't represent the portfolio's alpha. Several green energy companies will be releasing earnings this week. Strong earnings announcements would be a bit of a surprise. If there's a sell-off due to weak profitability, the market may consider these stocks to diversify their portfolio, even if they don't represent the portfolio's alpha.

The big players, however, are stuck in the second half of the week. Giants like Alphabet, Meta, Microsoft, Apple, and Amazon will be releasing their earnings at a time that coincides with the Fed's decisions. It's a very difficult process for those opening new positions to manage. Although analysts have revised their expectations for Q3 earnings upwards, it's important to note that the driver sectors of the indexes are slightly overbought. However, let me remind you that overbought actually indicates the strength of the uptrend. It wouldn't be OVERbought if it weren't, right? Therefore, shorting an overbought security solely for this reason is a matter of pure "crazy heart." I always think about the end result and don't short indexes until I see them decline.

I've often stated that all fundamental factors support the downward trend in oil. However, explaining fundamental data and trading it are vastly different. In fact, I reminded my friends and those with knowledge and experience who asked for portfolio advice, that as of last week, oil was screaming "buy me," but because it was against fundamentals, it was necessary to buy into it with options. I even supported this view by citing the high correlation between oil and the US 10Y Treasury yield for those interested in technical analysis. Indeed, both oil and interest rates rose. Another important development is that US hedge funds have reached a record number of short positions in Brent crude, but the price is insistent on rising. This is because there's what they call a "short squeeze." This means the market is trying to squeeze short sellers. Therefore, short positions will be risky for individual investors for a while longer. However, those familiar with options trading may have the opportunity to capitalize on this risky environment.

Frankly, I wouldn't want to jump right into buying gold. Why? Because the ball is still in the air, and a move to the $4800/$4900 range is technically possible, but this week's Fed meeting will be the trigger. Therefore, I wouldn't be too hasty in buying directly, whether it's gram gold, bullion, or paper gold traded on US markets. However, for one reason or another, a rapid sell-off in gold and even silver over the next day or two will increase market appetite for buying. I think it wouldn't be a bad idea to join the crowd a bit. In fact, to be honest, silver might even be a better opportunity than gold. Let's see what I can say next week, referring to this week.