To The Moon

💰 Major indices post their worst performance for the same period since 2016.

📈 Consider VIXY/SQQQ/SRTY to hedge portfolio risk. Take a good look at oil & gas ETFs too.

📣 Stay tuned and supercharge purchasing power with CashBoost!

| Market recap

Last week, the Nasdaq $.IXIC(.IXIC)$ fell 2.34%, the S&P 500 $.SPX(.SPX)$ dropped 1.94%, and the Dow Jones $.DJI(.DJI)$ declined 1.86%, marking a two-week losing streak for all three indices. Most popular Chinese stocks also saw declines, with $NASDAQ Golden Dragon China Index(HXC)$ falling 3.14%.

- Megacaps:

The S&P 500 erased all of its gains since Trump's victory in the 2024 U.S. Presidential Election. Chip stocks were under pressure, with $Advanced Micro Devices(AMD)$ dropping over 4%, $Intel(INTC)$ falling more than 3%, and $NVIDIA(NVDA)$ declining nearly 3%. Large tech stocks also moved lower, with $Netflix(NFLX)$ falling over 4% and $Apple(AAPL)$ dropping more than 2%.

- Behind the Scenes:

Where good is bad. Last Friday saw a large scale selloff as Wall Street fears that the better than expected economic data (December 2024 U.S. non-farm payrolls) would translate into a slowdown or even a stop of Fed rate cut. $Cboe Volatility Index(VIX)$, the measuring stick of market volatility, surged 21% over the past week.

- Top movers:

Driven by strong earnings, U.S. airline stocks saw a collective rise. $Delta Air Lines(DAL)$ surged 8.98%, $American Airlines(AAL)$ gained 4.29%, and $United Continental(UAL)$ rose 3.27%.

Benefiting from the potential TikTok ban, $Snap Inc(SNAP)$ moved against the broader market trend, rising nearly 4%, while $Meta Platforms, Inc.(META)$ gained 0.8%. Should TikTok be banned, a significant number of users are expected to migrate to alternative platforms.

Goldman Sachs remains bullish on Chinese stocks despite an ongoing rout, predicting that benchmark indices will rise by about 20% by the end of 2025, citing that the "risk-reward ratio is still favorable." On January 13, the A-share market closed flat, with $Cambricon Technologies Corporation Limited(688256)$ opening lower but rebounding, closing with a reduced loss of 1.5%.

| Energy boost: Oil & gas surge

Recently, oil prices have been trending higher, primarily due to disruptions on the supply side. The United States has imposed broader sanctions on Russia, leading to a strong rise in oil prices. The increased risk in oil supply, coupled with the arrival of a cold snap in the U.S., has made crude oil and natural gas ETFs popular among traders.

Oil prices continued to rise on Monday, with Brent crude surpassing $81 per barrel, reaching a four-month high. Crude oil futures are divided into two main types: UK Brent Crude and US West Texas Intermediate (WTI). The world’s largest crude oil ETF $United States Oil Fund LP(USO)$ , which tracks the price performance of US WTI, rose 4% last Friday and gained about 7% over the past week. The leveraged ETF $ProShares Ultra Bloomberg Crude Oil(UCO)$ , which tracks the performance of Brent crude futures with twice the leverage, rose about 6% last Friday and gained approximately 5% over the past week.

Driven by forecasts of a harsh cold snap and expected higher demand in January, US natural gas-based ETFs have been rallying since December 2024. The leveraged natural gas ETF $ProShares Ultra Bloomberg Natural Gas(BOIL)$ surged 13% last Friday and has gained 31% over the past week. Additionally, $United States Natural Gas Fund LP(UNG)$ rose 7.66% last Friday and is up 18% over the past week.

| Encore: L&I ETFs

VIXY - ProShares VIX Short-Term Futures ETF

$ProShares VIX Short-Term Futures ETF(VIXY)$ tracks the performance of the CBOE Volatility Index (VIX) short-term futures contracts. The value of VIXY typically rises significantly during stock market downturns or periods of extreme market volatility.

Since VIX generally has an inverse relationship with the stock market, VIXY is often viewed as a hedging tool. The VIX, commonly referred to as the "fear index," measures the market's expectations for volatility over the next 30 days. VIXY invests in VIX futures contracts, helping investors hedge against market uncertainty and volatility risk.

Recently, due to concerns about high interest rates and expectations of economic slowdown, VIXY has performed well and attracted significant investor attention. VIXY is not only suitable for investors looking to hedge risk during market turbulence but also serves as a tool for short-term volatility-based investments.

SQQQ - ProShares UltraPro Short QQQ

$ProShares UltraPro Short QQQ(SQQQ)$ is an ETF that tracks the Nasdaq-100 Index with a three-times inverse (-3x) multiplier. In simple terms, if the Nasdaq-100 Index falls by 1%, SQQQ aims to rise by 3%; conversely, if the index rises by 1%, SQQQ is expected to fall by 3%.

SQQQ is suited for investors with a bearish outlook on the Nasdaq-100 Index, particularly on large tech stocks like Apple, Microsoft, and Amazon. Due to recent concerns about the high valuations of tech stocks and the Fed’s tightening policies, SQQQ has performed well. Additionally, for those looking to short individual tech stocks, $T-Rex 2X Inverse NVIDIA Daily Target ETF(NVDQ)$ can be considered as a tool to short Nvidia.

Given its high leverage and inverse characteristics, SQQQ is appropriate for short-term speculative trades or hedging strategies, but it carries a higher risk. Investors should carefully time their use of SQQQ for trading.

SRTY - ProShares UltraPro Short Russell2000

$ProShares UltraPro Short Russell2000(SRTY)$ is a three-times inverse leveraged ETF that tracks the Russell 2000 Index and provides three times inverse leverage (-3x). In other words, when the Russell 2000 Index falls by 1%, SRTY aims to rise by 3%.

The Russell 2000 Index is typically considered a benchmark for small-cap stocks, consisting of smaller market-cap companies in the U.S. When there is an expectation of downside risk in the market, traders become more cautious. Small-cap stocks, due to their smaller size, are more sensitive to market fluctuations, and their prices are more prone to volatility. SRTY is suitable for investors with a bearish outlook on the small-cap stock market.

SRTY can also be used as a hedging tool, but investors should be aware of its high-risk nature.

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