Indices are @ the mercy of fed decision on Wednesday.
IF we look @ indices, they are sitting near all time highs :
S&P 500 4.13% away from high
Dow 2.92% away from high
Nasdaq only .81% away from high
Here is the RSI picture :
Nasdaq 54.75
S&P 500 42.91
Dow 41.36
IF we look @ all indices, Nasdaq is in serious bull mode even just before fed decision, this is a very good indicator for technology stocks.
S&P 500 is a laggard.
After 19 fed speakers trying to crush this market, it is really interesting that, technology stocks did not hear any of those 19 fed officials, and kept their composure.
SO fed will say " we have to take pre-emptive action to normalize interest rate by increasing .25%" or they will say "we need more data to see the trend"
In first case of higher interest rate, language becomes critical or Q & A explanation, IF it is one off, we are off to the races and indices may jump to new all time high in Nasdaq.......
IF fed need more data, then we will have a "relief rally"
Either way barring nasty language of more than one rate hike, indices are sitting very comfortably below highs.
From October it is Q 4, which is the strongest part of stock market, earnings for Q 3 will start with AA in week 1, earnings may surprise again with majority beating consensus.
Based on seasonality, indices will recover quickly from any fed surprise and march towards series of new all time highs.
Strongly recommend higher allocation in a well diversified portfolio, go for strong stocks with highest weighting in technology.
Good luck with your own interpretation of this TAPE and your own comfort level.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Stocktrader,
ZYNE and TRIL are flying. I have TRIL in my portfolio. I should have bought ZYNE also. Thanks for sharing your trade and GOOD LUCK.
Joseph
Hi Saleem,
It was another drip down week for me as some of my stocks still felt the force of "overallocated" selling. I was -1.75% for the week dropping my YTD to +16.72%. Hopefully I've rid myself of most of the "junk" now and can more positively forward. Today is a great step in that direction with the portfolio up over 2% on the day.
Portfolio: TRIL TNA SWN FDX SPLK WLH QRVO AKS ZYNE GWPH CNAT, cash 3.3%
I have the cash earmarked for a MACK capital raise, but am also looking for a re-entry on DKS (although I'd likely raise more cash in that event since DKS needs a larger position size to be worth it).
Stocktrader
Hi joseph,
I was composing my comment before yours posted so I didn't see it until now unfortunately.
Yes, ZYNE and TRIL both came out roaring today (although both started near unchanged). ZYNE got a seeking alpha article written about it today, and the chart setup was good anyways, so I think it's just a combination of good pieces coming together.
As for TRIL, I hesitate to mention this because it's so reminiscent of my RLYP move, but I've made it the entirety of my wife's IRA (which admittedly is much smaller than the one I reference usually, but still not insignificant). It could someday be worth 10x or more its current value and the technology continues to get validated through scientific articles. It has enough cash to operate for a long while, so a capital raise is not a concern (although it could certainly opt for one if the stock rose significantly). I think the risk/reward is still very favorable, and the lack of volume shows it is still fairly under the radar. I like this combination a lot :)
Stocktrader
Hi Stocktrader,
Thanks for elaborating your take on both ZYNE and TRIL. I know sometimes some these stocks can be tricky. But companies with innovation will always survive and reward us. I do remember the RLYP run.
Thanks a lot for sharing your trades. GL
Joseph
Hi Stocktrader and Joseph,
Great move in TRIL & ZYNE....someone is getting very good in spotting huge winners......
Saleem
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