12/10/2017: Markets were higher for the week, with the Dow and the S&P hitting all-time highs and gaining about 0.4% each for the week. The Nasdaq fell 0.1%, as the rotation out of some of the tech high-fliers continued.
Consumer sentiment for December came in at 96.8, which was down from expectations of 99.0 and the previous 98.5.
We have the Federal Reserve meeting next week, and a quarter-point rate hike seems a done deal.
Markets are seeing some “big rotation” taking place as large money managers and institutions prepare for the end of the year. Big profits are being locked in, especially among the big-cap techs (FAANGs) stocks.
Please be aware that the S&P 500 has not RETURNED to the Green Line in over a year, as Hope and Confidence are very high. But have some Cash available when the Markets return to the G L.
Most Leading Funds are back up in the Red Zones, so Nimble traders should be raising Cash. We like to Buy when the Herd is SCARED, and Investments are ON SALE!
LONG TERM TRADES
The Funds below are currently out of favor, but historically these could possibly Double or more from these lower levels. We are looking for a good Entry Point for these, but need the entire Economy & Inflation to pick up speed:
DBC COMMODITY FUND Relative Strength is back Below 90.
GRPN GROUPON INC. Wait for Break Out above $5.94 on High Volume.
JJC COPPER FUND Relative Strength has dumped, and Volume is Low.
KOL COAL FUND Wait for Break Out above $15.44 on High Volume.
LL LUMBER LIQUIDATORS Relative Strength is Below 90.
REMX RARE EARTH FUND Wait for Green Zone Buy on the Weekly Chart.
TWTR TWITTER INC. Wait on Break Out Above $25.25.
UGA US GASOLINE FUND Volume is too low… Break Out Above $33.07.
VALE VALE DE RIO Wait for Break Out above $11.72 on High Volume.
Alert! Market Risk is HIGH (Red Zone). The probability of successful Short Term Trades is lower, when the S&P 500 is Way Above the Green Line. Even the Strongest Funds can get chopped up. Either take quick gains from Money Wave Pops, or STAY IN CASH & WAIT for a larger correction.
Tell your Friends about the Green Line, and Help Animals.
QUESTION: Lorenzo writes ” I been going over the site back and forth, looking for more information on the market. Precisely Spy,Iwm,Efa,and Agg. Because these stocks are the only one that I can invest in as far as my TSP. Can you please help me. I’m looking more for entry and exit to grow my TSP.
Thank you for your help.”
ANSWER: Thank you for writing, Florenzo.
The Markets are High, and have not corrected much since Nov. 2017. Try to Buy at the Green Line, not Way Above. You could stay in the 4 Fund choices that you have, as long as they are Above the Green Line (250-day average). (Relative Strength is < 90).
For entry & exit, you might use the Chart below… CHART LINK Buy when the HERD is SCARED… Sell when the HERD feels GREAT (LIKE NOW).
This could be near the Top of an 8 ½ year Economic Cycle, when Inflation comes back. Unfortunately your 4 Funds historically won’t do well with Inflation… You will need Energy, Commodity, and Precious Metals Funds. Most Plans don’t offer those… It could get ugly when Inflation returns (Bonds fell in Half in early 80’s). When Inflation returns, and if your Funds fall BELOW the GREEN LINE, EXIT & GO TO CASH or Money Market.
Good trading, and tell your friends!