Trump Says No Deal – Yet, Market Edges Lower

November 11, 2019 KDelta Stocks No Comments

11-11-19   Until Trump messages that Trade Deal is Closer or further away, market support should arrive 1 to 3% below record highs. Rebound from lows in Oil Friday & today currently keeping stocks from a deeper drop. Stock Indices are still a half of one percent from record highs.

11-08-19   Tariff news driven market on hold today after reversing yesterday’s strong intraday gains as Trump contradicts China saying there is No Phase One Deal or rollback of Tariffs. Trump wants to maximize leverage until Phase One is done with a road map for enforceable future phases. Ideal timing currently for signing a deal is prior to scheduled mid-December tariff hike. If no deal by then, stocks will correct. : Purchase of Soybeans by China & partners this week implies a mutual deal is close, yet Soy is “falling”?.

11-07-19    A Trump tweet to confirm a China deal signing date…would be helpful to send prices surging another 3 to 6% on the indices despite overbought indications beginning to filter in.: Disney finally vindicated our hold from 100 and the 130’s. Now DIS longs can be faded @ 140’s as streaming launch & Holiday movies may boost price even further, but competition is enormous & expensive.

11-06-19  One shouldn’t be surprised stocks still following trade news like fleas on a dog. Resistance containing rallies in the 3090 – 3110 SP zone into early next week when downside risk will increase for November, but breakouts above resistance on positive Trade signing news may kick in new leg higher despite being overbought.

11-05-19  Our 3090 target is close as SP hit 3086.  Raising some cash in this 3080 – 3100 SP zone.

11-03-19  Next swing target=3090 Dec’ S&P. Primary indicators should be entering overbought zone this week & next. 

10-28-19  The major stock indices broke to new record highs today for the 1st time in 3 months as expected in earlier posts.  Focus on China phase one signing should keep bids under stocks. 

10-25-19  Stocks have been boring, but as forecast stocks are ending the 2 to 3 month trading range with an upward bias as expected that could test record highs in October and reach further new highs before expected China Trade updates near mid-November. If Phase One Trade with China signed & Dec’ tariffs are removed, then allow a surge into upper 3100’s potentially as a global rebound would then begin being priced in. :::  Specific comment on stocks: Earnings are better than feared and the market continues to favor value and consumer orientation vs FANG and high flying tech. AMZN plunge to mid 1600’s should be a buying opportunity. Tesla has finally impressed us for the next qtr’. ALGN has resumed its growth trajectory. ServiceNow is unaffected by global slowing. Despite record competition in the entertainment at home space, DISney should make one more run higher into the Holiday viewing season as new service is launched where we would be paring back.

10-17-19   Stocks have an upward bias that should grow as we approach November 16th when US & China should sign phase 1 of Trade Deal. Testing record highs or modest push to new highs below 3100 SP is possible. Key focus after mid-Nov’ is status of mid-Dec’ Tariff hikes that Trump may postpone now that deal making is occurring for 1st time in this 2 year battle. Three news events will control markets over the next month: Brexit, Fed rate cut decision Oct’ 29th and potential Phase One US/China Trade Deal signing with hints about planned Dec’ tariff hikes in Nov’.

10-15-19   This rally should continue… Short term Oil price action will continue to influence stocks. Any removal of China tariffs will trigger a significant breakout higher in stocks and commodities as anticipation of a 2020 global rebound will start adding premium to current valuations. Until then trading range mentality rules with only minor breakouts possible.

10-03-19  Indicators showing weakest economy in 3 to 4 years signals to us that  0.5% to 1.8%  GDP  Qtr’s are likely 2nd half of 2019 into early 2020 and an annual GDP rate falling below 2% before turning back higher in 2020. Unfortunately a China Trade Deal appears to be the only economic catalyst on the horizon. 

09-27-19  We remain in 2 to 3 month corrective period forecast at the end of July.  Tech remains out of favor while consumer staple stocks have taken charge.

{Follow model portfolio table & favored stocks below}

Order GTCStock Price

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Model Portfolio Tracker:

2019 Open positions: new portfolio each calendar year

$100,000 Starting value 01-02-2019

$3,000 initial investment/stock

***Portfolio update is down temporarily

60% net long  as of 11-11-19: Profit=$17,147 =+17.1% : vs SP=+23.1%

Symbol Name Last %Chg Market Val Total Chg Total %Chg Total Profit
PANW Palo Alto Networks Inc 236.59 -0.14% 2839.08 16.03 7.27% 192.36
CRM Salesforce.com Inc 161.28 0.11% 5644.8 15.23 10.43% 533.05
SPLK Splunk Inc 125.03 -0.43% 4376.05 15.03 13.66% 526.05
WMT Wal-Mart Stores 118.35 -0.91% 4142.25 1.75 1.50% 61.25
FLIR Flir Systems Inc 53.57 0.62% 3214.2 0.13 0.24% 7.8
CTAS Cintas Corp 260.73 -0.06% 3910.95 8.59 3.41% 128.85
T AT&T Inc 39.23 -0.38% 3923 2.23 6.03% 223
SPY S&P 500 SPDR 308.09 -0.28% 9242.7 11.82 3.99% 354.6
NVDA Nvidia Corp 207.59 -0.09% 5189.75 12.49 6.40% 312.25
AMZN Amazon.com Inc 1769.9 -0.89% 3539.86 49.93 2.90% 99.86
BAC Bank of America Corp 33.21 -0.15% 3985.2 1.81 5.76% 217.2
TSLA Tesla Inc 347.75 3.15% 3477.5 50.03 16.80% 500.3
ALGN Align Technology 258.45 -0.57% 3101.4 15.09 6.20% 181.08
XLK S&P 500 Info Tech Sector SPDR 86.06 -0.07% 4303 2.62 3.14% 131
QQQ Nasdaq QQQ Invesco ETF 200.7 -0.26% 5017.5 -0.07 -0.03% -1.75
VZ Verizon Communications Inc 59.35 -0.10% 3857.75 -0.65 -1.08% -42.25

Favored stocks Buy list:

 Momentum stocks near highs: *AAPL Apple*AMED Amedisys :*ATKR Atkore Int’ : *AZN AstraZeneca : *BAC Bank America : *BIIB Biogen : *BX Blackstone  : *CAT Catepillar  :*CDW  :  *CPRT Copart :*CTAS Cintas : *CVS : *DXCM Dexcom  *FISV Fiserv :*FLIR Systems : *GPN Global Payments: *GS Goldman Sachs : *HON Honeywell :*IHI Med Devices : *INT World Fuel Service :*JPM JPMorgan : *KRE Regional Banks ETF :  *LRCX Lam Research : *MRVL Marvel : *NDSN Nordson : *NVDA Nvidia: *NXPI Nxp Semi’ : *MOAT Value : *MSFT Microsoft :  PLD Prologis   : *SAH Sonic Automotive  *STNE StoneCo  *T AT&T : *TREE Lending Tree : *TREX  : *UTX United Tech’ : *VZ Verizon: *WMT Walmart : *XHB Housing : *ZBRA Zebra Tech’

Undervalued bullpen :    AMZN  Amazon : BA Boeing :  COUP CoupaSoftware  : CRM Salesforece :  MKC Mccormick : HUN Huntsman:   INTU Intuit : JNJ Johnson&Johnson  : LPSN LivePerson MA Mastercard  :  MELI Mercadolibre  MSI Motorola Solutions : NOW Service Now :  PANW Paulo Alto : PEGA Pega Systems : PYPL PayPal RH Restoration Hardware :  SAN Banco Santander   : SQ Square  :  SBUX Starbucks : SHOP Shopify : SPLK Splunk  : TEAM Atlassian : TRMB Trimble : TWLO Twilio  : V  Visa: VMW   VMWare : VEEV  Veeva  : WLTW Willis Towers : WM Waste Mgmt’  : WSM Williams Sonoma 

ETF’s–>   *XLC media/communication : XLB SPDR Materials :  IGE Natural Resources :  SOYB Soybeans :  *EEM Emerging Markets ETF : COPX Copper :  GLD Gold :SLV Silver  : GDX Gold Miners

US Indexes – ETF’s:  SPY :  QQQ  :  XLK  :  HACK= Cyber security : XHE=Healthcare : FINX=Fintech :  XLV :  

When using Stock Index Short hedges:=SH & SDS for SPY inverse : DOG for DJIA inverse : PSQ for QQQ inverse; VXX Vix volatility

 


(continued highlights/track record from above of past forecast updates correctly foretelling market action)

09-25-19  Our 13th-16th top in 3020’s defined the short term top expected. Market pulled back as expected & has begun a rally we forecasted into late September as October Trade Talks near. Any SP move late Sept’ above 3026 would then create potential for 3090’s in October. Leadership in this market is weak and approaching October seasonality can create some strong 2 way action. Any SP move back under 2955 may lead to short term capitulation under 2900. A move in Oil to support near $53 – $54 over the next week should bring stocks lower. 

09-13-19  Our 3026 target was almost reached today. The benchmark SP 500 Index entered the short term topping zone due prior to next weeks Fed rate cut due on September 18th. After a setback surrounding the rate cut, stocks may rebound to stay near record levels until Trade talks occur in October. : The shift from successful fast growing tech to value stocks continues. Stocks that performed well this week should remain in favor after a decline and those that fell from record levels this week without a significant rebound should be shunned.

09-11-19  Our SP next zone at 3026 expected this week. Short term top continues to look like 13th – 16th. Major portfolio sentiment shift after Bullish China tariff talk led to mass selling of high flying tech winners.

09-05-18  Quite the quick forecast fulfillment: The SP topped near 2940 with quick pullback followed by a final test of 2940 that we warned would trigger a breakout to 3000. SP 3004 is the ideal target by 16th, with more potential if Oil above $58.  

08-30-19   Any new move to upper 2940’s increases odds quickly of an upside breakout back above 3000

08-08-19  SP 2850’s is this weeks downside risk.  Economy will continue to slow to < 2% GDP growth & flight to safety & lower yields should continue.

08-05-19  Our 8% correction zone minimum has already been hit after after just over 3 down days with the overnight SP hitting 2776. Our August – October bottoming zone currently looks like an 8 to 14% max’ correction. 

08-03-19   July proved to be the Buy the Rumor, Sell the News action for stocks as the Sept’ SP 500 Index sold off to 2900 area.   ::: While the industrial economy is edging into contraction & should stay down most of this year, no overall recession is expected. Economic cycle low mid-2019 to early 2020 & next cycle top in GDP in 2021 before trouble starts brewing once again as in 2018’s GDP top, but with a deeper US downturn potentially in 2022.

07-27-19    It’s late July with SP at 3024  …Higher prices into our zone this week would allow for a corrective phase most of August. : Add short hedge VXX up to 5% portfolio if Sep’ SP >3020;.

07-12-19    Uptrend into late July into SP 3020 to 3050 zone still ideal for potential top.

(more past track record forecast commentary below our Favorite stock list)

07-02-19  Stocks are moving to new records each day. SP 3000 – 3020’s next upside target zone. While all of July looks supportive for stocks and sentiment gauges are not even close to overbought, we would be surprised to see gains above the 3020’s SP given the weak economic and earnings data we expect.

07-01-19  Stock indices: more record highs are likely with Fed cuts expected end of July, Bonds and stocks should have a floor preventing major declines for now.

06-30-19  Exuberant expectations of China and US trade talks reconvening along with expected end of July Fed rate cut are sending stocks surging to record highs in early July. SP 500 Index heading above 3,000 & Dow over 27,000. 

06-14-19   With assumption that Trump & Xi will talk Trade at G20 June 28th & Fed will cut rates, stocks remain in uptrend : 10 Yr’ still heading toward 2% yield or 128+ basis Sept’ 10 Yr Note, where Bonds & Stocks may reach a temp’ peak.

06-09-19   current trend in 10 Yr yields is toward 2%. 

06-03-19   Last week our target was June 3rd low at 2733.   2730 on June 3rd was the low before a monster short covering rally today on the news the Fed was open to a rate cut. This has placed a nice floor under the market preventing Trade War worries from tanking the market near term. We have talked of this corrective period as part of a trading range being carved out from 2700’s to 2900’s area. 

05-28-19     low due near June 3rd for a 7% correction.

05-21-19     Without a China Trade Agreement a broader trading range (2700’s – 2900’s) remains the best odds.

05-09-19   New Trump Tariffs without a hint of a deal being close will send stocks down sharply. : The high flyers we exited are amazingly still sitting at record highs after incredible gains this year –> WIX, SHOP, VEEV, DIS, GPN, OKTA,  TWLO… 

05-07-19   We have raised more cash. Our charts have been showing this decline with potential for 7 to 10% this month

04-30-19   Upper end of our short term target window is now being tested in the lower June S&P 2960’s .  

04-23-19   There is a feeling of climax in the air as many worry we are at an inflection area.  SP 2940’s to 2960’s remain our ideal topping zone to watch for.  : Exit DIS 140.

04-12-19  Fortunately we added Disney to the portfolio earlier this week. … : The S&P basis cash index targets 2950 area in coming weeks. 

04-10-19  … there is enough buying power to prevent any meaningful corrections near term.

04-05-19  Look for our forecast of record highs this summer to arrive in April. 

02-28-19   Still expecting record highs in all major indices by summer. Long term picture remains positive.   Stay with trend & use 3% corrections for more additions. 

02-25-19  SP reached our 2800 – 2832 intermediate topping zone today after Trump announced Sunday he would suspend the new China tariff deadline. Stocks then pulled back from the SP 2814 highs on Trumps tweets drove Oil prices down. As mentioned in our latest “In The News” section interview the other week, a new Trade Deal framework might be the classic Buy the Rumor Sell the News of an agreement. If Oil moves to new 2019 highs then stocks may start move to new 2019 highs again.  

02-15-19  Our bias has remained to the upside with stock indices just 5% from all time highs.  Max potential in Feb’ in 2830’s. Next time indices fall more than 2% will quickly increase odds of our first meaningful correction of the year.: Oil is tethered to stocks & we remain long looking for $56.50 area next week before a pullback and >$60 eventually.

02-12-19  Well our suspicion of minimal downside risk before March 1st was realized today as the ideal 3+% correction was only 2% and the SP did rise above the reversal level of 2730 hinting that this market has a floor of optimism over a trade deal and is unlikely to plunge. 

02-07-19 … should the SP regain the 2730’s and Oil move back over $54, we would assume the correction phase is not ready to begin … significant downside risk before the March 1st trade deal deadline seems very unlikely

02-01-19  Stocks …longer term 2019 target zone remains Bullish in the 2900 to 3100 SP 500 Index, assuming no tariff war escalation. 

01-30-19   Impressive news response syndrome continues. Market confidence of a China Trade deal grows each week & is a major tailwind that will continue into February until China or the US publicize roadblocks. March SP 2730’s to 2740’s is the next target zone. The Feb’ pullback we expected may be elusive or a much higher low than many had hoped for.  

01-17-19   We have been expecting the obvious resistance in the low 2620’s SP to break .. No longer is this a market Selling Good News, but Buying Bad news.

01-14-19  Late January top short term should lead to a strong pullback into a Feb’ low where new buying is expected. Weak earnings & economy are “mostly” priced in. Short term trader Equity Call option buying indicates a ceiling on price with SP likely to stay under the low 2700’s in Jan’ & then fall into lower 2500’s in Feb’.

01-06-19    Further economic weakness is expected over the next few months when equity valuation risk should be mostly priced in. A test of record highs due this summer, assuming a positive trade deal in the 1st qtr’.

12-26-18  Strong short term bottom is likely in with the spike low early today (12-26-18). $VIX close over 36 Monday implies a low of some importance has arrived

12-18-18  With the sharp drop in China Trade proxies of Aussie$, Copper & Crude Oil today…a reversal lower in stocks before Christmas would not be a surprise.

12-17-18   New 2018 lows breaking multi-month support hints of capitulation. We remain with heavy cash levels

12-07-18   After 3 tests of the 10% correction lows since the Oct’ 3rd peak our old adage hints this 4th test has higher odds of busting to new lows – new 2018 lows, perhaps as much as the 17 to 20% correction levels from the peak basis Dow & SP.  Need a VIX>35-50 for a stronger low. Now 73% in cash.

12-04-18  Mini panic underway …We are raising more cash … Need to await new oversold signals before putting cash back into stocks.  

12-03-18  China sensitive Soybeans and Copper heading down all day is a sign the markets fear the China Trade truce will fail. If SP 500 Index 2760 & Dow 25,538 are tested or broken this week, then the Trade relief rally is on hold & stocks will continue to work even lower … 

11-20-18  The Dow psychology is setting up quickly for a stock market … tradable December low despite more downgrades in 2019.

11-19-18  We are a net 39% long stocks … hopes of a Trade deal seem ripe for disappointment yet again. 

10-18-18   Like the Jan’ – Feb’ correction, stocks…now heading back to the lows or new lows …

10-04-18   Our end of September newsletter warned of an October pullback 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   Dow rally … 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). 

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 (Higher Oil)

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

02-05-18    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   A several month pause into the spring looks likely.  

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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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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