Chinese Weakness Pressures Stocks Lower

Investors remain 95% invested in the stock market through the ETF of the S&P 500 Index, symbol SPY. Gains for 2017 = 18%

12-05-17    Weak economic numbers in China generated a sharp drop in Copper and added weight to the false breakout reversal lower in stocks this week. The inflection point we outlined last week for the 1st and 4th has so far coincided with a short term top. Stocks and most commodity markets are being pressured lower.

12-04-17    Tax Bill generated a false gap higher for now. Tax news is positive, but with less benefit to low tax rate Tech sector, we are seeing a rotation toward traditional sectors such as Rail, Housing and Banks while Techs are liquidated after enormous 2017 gains.  Can’t rule out a correction phase for the whole market.  

12-03-17     Tax legislation has passed the main obstacle in the Senate with odds rising to 99% that a final package will arrive near year end. Option sentiment is in the overbought zone, but the Fear & Greed Index requires a couple strong days of gains still.

11-14-17   Our current expectation remains that more serious corrections of 10% or more will hold off until the 1st quarter of 2018.  Tech stocks are among the most vulnerable in these declines.  2018 should mark a shift to commodity and financial stocks after a more serious market correction is completed in the 1st half of the year.

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Stocks we favored in 2017/2018: Rotating away from Tech toward housing, industrial, material and financial starting 11-09-17

BLD Topbuild : USCR   US Concrete : STRL    Sterling Construction : PNR  Pentair  :  MMM    3M : WM Waste Mgmt’  : BA  Boeing :  CGNX  Cognex  : GVA  Granite Construction   : PPG Industries :  PLD  Prologis  : DCT  Industrial Trust : AMZN  Amazon :  BABA  Alibaba  :  HOFT Hooker Furniture  :  TMHC  Taylor Morrison Home :  CBG  CBRE  Group   :            ANET Arista Networks  : VMW    VMWare : CONE Cyrus One  : Nutanix NTNX   : EQIX Equinix  : BOX    :  RHT RedHat  :  ADBE Adobe  :  ZBRA – Zebra Tech’   :  CRM Salesforece.com    :  GOOGL   Alphabet   :  DXC Tech   :  NTNX  Nutanix  :   COR  Coresite   : IBM  :   AAPL   Apple  :  NEWR   New Relics  :  ZAGG  :  FTNT Fortinet   :  PANW Palo Alto Networks  :  SWKS  Skyworks Solutions    :  ON   On Semi   :  OLED Universal Display  :   Vantiv VNTV   :   PYPL PayPal    :  V  Visa  :  MA  Mastercard   :  GPN  Global Payments  :   Accenture ACN   :  UNH  United Healthcare   :  TFX   Teleflex   :   EXAS  Exact Sciences  :  A  Agilent  :  ISRG Intuitive Surgical  :  ABT Abbott lab                        PODD Insulet   :  XPO Logistics  :  UNP   Union Pacific   :  OLLI  Ollies  :  Starbucks SBUX   :  STZ Constellation Brands   :ALB Albermarle   :  IDTI  Integrated Devices  :  TTWO Take 2 Interactive   :    CFR Frost    :  WTFC wintrust fin’    :  XRAY  Dentspply Sirona    :  ALGN Align tech   :  WYNN Wynn Resorts  :  DWDP  Dow Dupont  :     SLCA Silica   :

Indexes – ETF’s:  SPY  :  QQQ  :  XLK  :  IWR  : XLF   :  KRE  :  KOL

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Disclaimer and Notice:  This report may contain information on investments that are high risk and have substantial risk of principal loss.  It is for informational purposes only. Statements in this communication are not statements of fact are merely opinions or forward looking statements from a potentially biased source(s) that involve known and unknown risks, uncertainties and other factors that could cause actual future results to differ materially from any prior or projected results. Statements in this communication may be inaccurate and/or unsuitable for you.  You must perform your own due diligence.  Your investment decisions should always be made based on your specific financial needs, suitability, objectives, goals, time horizon and risk tolerance.  Any decision is at your sole discretion and at your sole risk.  You are advised to consult with your individual investment and tax professionals before making any investment.  Past performance is no guarantee of future results.

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