After 3 days of solid UP move we stalled badly on Friday.
Stalling on 4th day can be taken positively or negatively depending on how you read this market.
Last 2 weeks saw many big earnings let down BUT we managed 3 straight win......
Market is more than confusing to say the least.
The real question IS......
Trade deal with China or Fed going to decide direction of this market or Fed will sink us further to new lows.....
Your bet is as good as mine......
I have a very strong sense that China trade agreement is not too far off, IF this happens in next 2 weeks then we rally in anticipation and take out not only 200 DMA but also 50 DMA.....
DOW is already above 200 DMA....which has become leading indicator this year....that is a very strong contrary signal to market participants.
SOX is showing pulse lately which is also encouraging.....
FED is keeping pressure on this market.....
Wage report showing wage inflation above Fed target is cause for concern....
BUT Oil is slumping @ lowest point since April......telling us...all is not well in the world....Worldwide economic slowdown being predicted by oil...
SO Fed is being negated by Oil and potential China trade deal......
Based on this " simplistic 2 bullish and 1 bearish scenario I say this is a pause that was needed and then we go UP "
Lately most Chinese stocks are looking like a bargain IF we get a trade deal...that is a big IF....
Most technology stocks have been trashed either on its own earnings report or in sympathy, they are getting quite attractive...so start your buying list and jump in on next down day.....
Bottom line is....my thesis remain bullish and "risk reward ratio is pretty compelling on most stocks "
Good luck with your own analysis of this difficult TAPE and your own comfort level.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hi Saleem,
Last week: +4.83% (YTD: +34.69%)
Notable Winners: TRIL CHGG SPLK SAIL HUBS FSLR VICR
Notable Losers: PLAN VRNS
It was a massive rebound week for the markets and the portfolio followed, even with my whole portfolio selling that may have been slightly early. My outlook for the market into the end of the year is mixed, and without an edge, I don't feel the need to be exposed, especially as things going "right" could keep a lid on my high growth stocks as rates remain a concern. I will probably try and find single stock ideas that may work here, but my days of "all-in" are gone for now.
Holdings: TRIL, cash 96.3%
Stocktrader
Hi Stocktrader,
Great performance in a very tough year where most stocks got crushed.
Good luck with your strategy going forward!
Saleem
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