Retest of Lows Coming! New Lows Next?

{Follow model portfolio table & favored stocks below}

10-22-18  Stocks breaking lower overnight – perhaps on more China worries over the ‘sounds of silence’ on any trade talk/threats. Downside momentum picking up again as several of our recent reports have highlighted that new lows are approaching quickly. Only a positive trade news story seems likely to stop the growing frenzy of selling, despite good earnings. Adding more hedges (SDS, PSQ, TLT).  45% net long for investors.

10-21-18  S&P 500 cash index support in 2760’s (2767 last) is important with 2700 – 2715 zone a critical target zone & becomes more of a magnet as we approach this potential October bottom retest level. Ideal retest would be Oct’ 23rd/24th, after which major earning announcements will either truncate the decline or accelerate to the downside if the negative response to positive news syndrome persists after what we suspect will be positive earning reports on the 25th. While our 7 to 8% stock market correction target was ideal & has held thus far, it is far from etched in stone as we test the 200 day moving average (dma) for the past 7 days. Market psychology does place value in this 200 dma and will trigger a quick panic rush lower once closing & intraday prices stay below this dma – currently at 2768. Traders should watch intently price action this week that will trigger red flags: intraday price action that stays under the 200 dma (2768) & breaks 2700 on a confirmation wave lower. Breakdown targets would be the 12 to 15% correction zone in the 2500’s basis S&P 500 Index & 23,500 to 24,000 basis the Dow (DJIA).    

10-18-18   Like the Jan’ – Feb’ correction, stocks had a brief rally & now heading back to the lows or new lows near the 8% intraday correction level. Short hedges added and we continue to expect any Buying to be risky throughout October. Setting up for a nervous election day market November 6th/7th!

10-16-18    Sept’ 28, 3 days before the record highs our main newsletter warned of an October correction in the stock market. Initial low arrived on the 11th as warned when Fear Gauge fell under 18. Our 2016 parallel targeted a 5 to as much as 8% correction. The intraday high to low in October has been 7.9%, which precisely mirrors 2016 in amplitude. Sideways trading range until Nov’ 6th elections is very likely. Election outcome will be key in triggering a relief rally or a new leg lower if the Dems’ take one or both chambers of Congress.

10-04-18   Our end of September newsletter warned of an October pullback & trading range as the mid-term election nears. 

09-27-18   Medium term traders should use the lows of 09-26-18 as short term support below which a new short term leg down may accelerate. 

08-04-18  Sentiment was neutral during  1,500 point Dow rally since the July 3rd low, which allows … prices to continue to new multi-month highs over the next 3 weeks … S&P 2900 to 2910 is the ideal target in August. 

06-25-18    Trump will risk furthering a trade war …he doesn’t want a deal; he wants a weaker China & stronger USA.

05-10-18    … we should expect rhetoric that keeps Oil prices edging higher (>$70). Energy infrastructure and pipeline companies serving the Permian should have more business than they can handle for at least the next year! 

04-16-18    Our April Dow target is 26,800-900. 

04-14-18   Oil has remained high as expected …We continue to like buying the dips into at least mid-May as Iranian talks heat up.  

03-27-18    … we continue to favor Trump … pivoting to an aggressive focus on Iran by May. (Higher Oil)

03-18-18   Stocks: Use any new testing of 11 to 15% intraday correction level as new buying entry.

02-05-18    Current 2018 correction hit the 10% level on the Dow. Look for an initial low this week.

02-03-18    For a couple of months we have discussed our forecast for the first real correction since Trump was elected is due during the 1st qtr’ 2018 earnings reporting period from late January to late February.

01-23-18     We continue to view this period into mid-February as a higher risk time for earnings euphoria saturation.  A several month pause into the spring looks likely, especially if the 5% correction level is tested.  

11-14-17   Our current expectation remains that more serious corrections of 10% or more will hold off until the 1st quarter of 2018. 

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Equity Investors 45% Net Long stocks

Model 17 long holdings 5 short hedges of 3k/initial positions each:

Model Portfolio Tracker:

1-2-2018 Start Value = $101,000 

2018 ExecSpec portfolio P&L= $27,362 = +26.6% return YTD 10-22-2018 {SP 500=+2.7%:Nasdaq=+11.1%}
Symbol Name Last Change %Chg Market Val Total Chg Total %Chg Profit Total Profit
AMZN Amazon.com Inc 1789.3 25.27 1.43% 5367.9 617.3 52.67% 75.81 1851.9
AMZN Amazon.com Inc 1789.3 25.27 1.43% 3578.6 -149.71 -7.72% 50.54 -299.42
BA Boeing Company 355.98 -0.28 -0.08% 3559.8 60.23 20.37% -2.8 602.3
CNC Centene Corp 141.31 -1.47 -1.03% 4239.3 40.61 40.33% -44.1 1218.3
CRM Salesforce.com Inc 142.95 2.46 1.75% 4288.5 40.07 38.95% 73.8 1202.1
CSCO Cisco Systems Inc 45.76 0.42 0.93% 3569.28 7.39 19.26% 32.76 576.42
FIVE Five Below Inc 116.18 1.38 1.20% 2904.5 -9.82 -7.79% 34.5 -245.5
GOOGL Alphabet Class A 1111.37 6.19 0.56% 3334.11 -134.63 -10.80% 18.57 -403.89
JNJ Johnson & Johnson 138.68 -0.37 -0.27% 3189.64 4.68 3.49% -8.51 107.64
MA Mastercard Inc 204.5 1.44 0.71% 3067.5 4.03 2.01% 21.6 60.45
MSFT Microsoft Corp 109.63 0.97 0.89% 3837.05 23.5 27.28% 33.95 822.5
OLLI Ollies Bargain CS 90.08 1.34 1.51% 5134.56 36.88 69.32% 76.38 2102.16
PSQ QQQ Short Proshares 31.16 -0.15 -0.48% 3116 0.38 1.23% -15 38
PSQ QQQ Short Proshares 31.16 -0.15 -0.48% 3116 0.21 0.68% -15 21
PYPL Paypal Holdings 85.43 0.65 0.77% 3417.2 10.19 13.54% 26 407.6
SDS Ultrashort S&P 500 Proshares 36.81 0.31 0.85% 3018.42 0.33 0.90% 27.06 27.06
SQ Square 75.72 1.65 2.23% 2650.2 -8.28 -9.86% 57.75 -289.8
TLT 20+ Year Treas Bond Ishares ETF 113.56 -0.15 -0.13% 2839 -0.06 -0.05% -3.75 -1.5
TLT 20+ Year Treas Bond Ishares ETF 113.56 -0.15 -0.13% 2839 -0.19 -0.17% -3.75 -4.75
TWLO Twilio 69.23 2.82 4.25% 3115.35 1.48 2.18% 126.9 66.6
UNH Unitedhealth Group Inc 262.19 -3.11 -1.17% 2884.09 -6.49 -2.42% -34.21 -71.39
WP Worldpay Inc 95.02 -0.14 -0.15% 3895.82 21.48 29.21% -5.74 880.68
76961.82
 Favored stocks Buy list (*=currently in strong momentum mode near highs)

AAPL   Apple  : AAXN Axon : ABT Abbott Labs : AMZN  Amazon :  ACN –Accenture : ALGN Align tech ADBE Adobe :  BEAT Biotelemtry : BA  Boeing  :  BOX  :  CGC Canopy Growth : CNC  Centene : CRM Salesforece : COUP  Coupa Software :  CSCO Cisco : DBX Drop Box : *DIS Disney : DXCM Decom :  FIVE Five Below : Fortinet FTNT :  GPN  Global Payments :  GOOGL  Alphabet  : HCA Healthcare Hldgs’ : JKHY Jack Henry : JNJ Johnson&Johnson :  INTU Intuit : ISRG Intuitive Surgical  : LNG Cheniere : MA  Mastercard   : MKC Mccormick  : MDB MongoDB :  MSFT Microsoft :  NOW  Service Now :  NFLX Netflix  :  OLLI  Ollies PANW Palo Alto Networks : PYPL PayPal  :  RHT RedHatSPOT Spotify  :  SPLK Splunk  : TDOC Teladoc :  TLND Talend  :  TWLO Twilio :  UNH  United Healthcare  : V  Visa  VMW   VMWare  : WP WorldPay  :  WDAY Workday  : YUM : ZBRA – Zebra Tech’  

US Indexes – ETF’s:  SPY :  QQQ  :  XLK  :  IWR : HACK= cyber security : XHE=Cloud financials : FINX=Fintech

Current commodity funds in long term Buy zones –Buy on dips: Aussie$=FXA : Copper=CPER : Yen=FXY : Treasury Bonds=TLT  :  Silver=SLV : Gold=IAU : Cocoa=NIB : Soybeans=SOYB :  *Coffee=JJOFF : *Sugar=CANE 

::: When using Stock Index Short hedges:=*SH (short for SPY) : *PSQ (short for QQQ); SDS (Ultra SP short S&P)

 

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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