Feb 21

Weekend Review and Watchlist

Here, I’ve got this company for you to buy. It’s been in a choppy range recently but it just broke out to all time highs with an invalidation point a few percent away for a great risk/reward trade.

Except it’s not a company. It’s the Dow Jones Industrial Average.

My point? If this was a stock you’d be all over it, as I suspect many market commentators would, rather than trying to find the latest bearish data point or Greek tragedy to keep you from buying it.

And it’s not the only one. The S&P now sits above 2100 at all time highs. The NASDAQ has been negotiating levels not since the heady days of 2000, and is now just a few percent from all time highs.

I joked recently that the Russell 2000 could be working on the biggest breakout since Andy Dufresne busted out of Shawshank. Well it looks like it finally did it with this week’s follow through confirming the move. The Russell 2000. Crawled through 12 months of crap and came out clean the other side.

 

New highs weren’t limited to the US either. Here’s  the DAX, recording its sixth consecutive week at all time highs:-

It seems bizarre to me that for the last few weeks, and especially the last few days, people have attributed every twist and turn in the S&P to whatever the latest goings on in Greece are, and yet European markets, who you would imagine would be at greater risk of being impacted, appear to have been oblivious to it this entire time.

Assign whatever causality you like to market moves, but you can’t backtest news headlines, or what the stories or opinions were at the time, or how it felt. Price alone tells the story. Price is the final arbiter in everything we do.

New highs extended beyond the US and Europe too. Japan’s Nikkei surpassed its 2007 highs to record the highest weekly close since May 2000, shown here on a 20-year monthly chart:-

An interesting play might be $EWJ which has a different makeup to the Nikkei but staged a range breakout of its own this week:-

 

Turning back to US markets, the strength and breadth of this latest move to all time highs is encouraging. Of the nine S&P Sector SPDRs, five ended the week at all time highs: Consumer Discretionary, Technology, Healthcare, Industrials, and Materials. Biotechs also came roaring back, shown here via $IBB relative to the $SPY:-

 

Our Marketfy portfolio is now +5.3% YTD vs +2.5% for the S&P. There were no new portfolio signals this week, and 9 of our 13 names made all time highs. Of our 12 additional trade ideas, 9 made new highs, and we had one exit and one new entry.

Full analysis and commentary on current signals, as well as entry/exit posts, additional trade ideas, and a comprehensive watchlist is available here.

We’ve got a healthy amount of portfolio names and trade ideas on the go at the moment, but there are still plenty of other names waiting in the wings if we need them. That’s what we should expect with good breadth at all time highs. Consumer Discretionary names still dominate our list, followed by Healthcare and Technology. Some are ready and waiting, some are still setting up.

Here’s a sample of just 10 from the full list of 30 names:-

$SBNY

 

$PPG

 

$EW

 

$LOGM

 

$TASR

 

$EBAY

 

$JWN

 

$ULTA

 

$RAD

 

$ROST

Full analysis and commentary on current signals, as well as entry/exit posts, additional trade ideas, and a comprehensive watchlist is available here.

 

 

 

 

 

 

 

 

Feb 16

Weekend Review and Watchlist

I’m posting this a little later than usual having just returned from a brief family vacation. I hope you got to enjoy the long weekend as much as I did.

By now you will have seen enough different versions of the same story that the market closed at all time highs, so I won’t spend too much time going over the same ground. I will only add that despite the fact the S&P stole the headlines, I thought the move in the NASDAQ was the most impressive this week, shown here via $QQQ, following through with several gap and run sessions to fresh highs.

That was echoed with the long-awaited breakout in the Russell 2000 ($RUT). It’s poked its head up here before only to be knocked back down so there will be plenty of eyes watching for a follow-through this week.

In the last year I’ve seen a lot of people become pessimistic each time the market moved to new highs as it was always being led by a defensive sector; first it was utilities, then healthcare, then consumer staples. Now the three strongest SPDR Sectors are Consumer Discretionary, Technology, and Basic Materials, so it will be interesting to see what sentiment accompanies the all time highs this time around.

 

Turning to our Marketfy portfolio, there were no new signals this week and 6 of the 13 names are at or near new highs. The portfolio is now +2.95% YTD vs +1.85% for the S&P. Our total open portfolio risk of 7.7% is the highest it’s been for a while, a consequence of the new highs and the temporary gap that can occur until such time as stops can be brought nearer to current prices. The open trade ideas given in addition to the portfolio names also continue to do well, with 8 of the 12 names at or near new highs.

Full analysis and commentary on current signals, as well as entry/exit posts, additional trade ideas, and a comprehensive watchlist is available here.

The aforementioned sector strength is reflected in our watchlist with consumer discretionary, technology, and materials making up the bulk of our names. Some industrial names are getting closer too, but I’m still struggling to find more than just a couple of financials.

Here is just a sample:-

$SBNY

 

$UTX

 

$IP

 

$PPG

 

$ACT

 

$CERN

 

$EW

 

$TASR

 

$RAD

 

$ROST

Full analysis and commentary on current signals, as well as entry/exit posts, additional trade ideas, and a comprehensive watchlist is available here.

 

 

 

 

 

 

 

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