Ideal Medium Term Top in Ongoing Bull Feb’ 21st

February 14, 2020 KDelta Stocks No Comments

02-14-20  Despite overbought sentiment and negative momentum divergences, it seems the only risk to this stock market is a rapid spread of the CoronaVirus outside of China OR (more likely) supply shortages around the globe due to factory shutdown in China.  While we entered a time window for a top this week, we continue to expect ideal short term top near the end of next week ~21st. A spike to 3410 – 3440 area next week is potential. Record highs late next week may warrant raising cash & hedging for 5 to 10% downside. Earnings season ends about Feb’ 27th, at which time Buying pressure should evaporate for a few weeks.

02-11-20  Sentiment is once again approaching record Call buying, indicative of a short to medium term peak similar to January 17 to 24th. With option expiration on the 21st, we view that date as the the end of the time window for a February peak.  SP jumped past 3350 resistance. Major targets remaining are 3412-15 & 3440’s as potential over the next week. A breakdown in Oil (<$50) or breakout higher in 10 Yr Bonds>132 will be a warning for stock investors to watch.

02-04-20  Stocks have rallied stronger than we would expect this week. We have no insight to justify the strong overnight surge in stocks with new record highs in Tech indices (Nasdaq) since the Virus scare & risk of China & Global slowing remains high odds bet this month – yet market assumes no risk. If Oil, Copper, Soybeans and Hogs move back to new lows, Stocks will  pull back in sympathy over global slowdown concerns. 

02-03-20  Quality Tech stocks continue to hit new record highs with Tesla leading the world. This market needs new bad news to push it lower such as Viral deaths in Europe and the US. Well contained thus far! 

01-30-20  SP fell into our support zone in 3240’s & rallied into close. Amazon 12% after hours price jump on earnings hints the tech sector is still on fire & that we have a tug-of-war between Coronavirus escalation induced Recession fears vs acceleration of big tech earnings from ADBE/AAPL/TSLA/MSFT/AMZN.  

01-29-20  3290’a SP held rally, now reversing lower on renewed economic worries form Virus as well as bad earnings (Facebook). SP headed back to 3247. 

01-28-20  3290’s should provide short term resistance this week.

01-24-20  We have talked frequently of a Jan’ 24th top (today) & with stocks and especially commodities like Oil and Copper falling hard, it appears our inflection date is a notable trading top. Stocks & commodities are selling off today on fears of a pandemic or slowing China/Globe due to Coronavirus. January top appears to be in. Too many investors will be buying the break if prices fall, thus if SP breaks 3260’s & especially 3200  (4% correction level)  odds increase that this market will drop even further at that point – more than most expect. If virus results in any deaths outside of China or a declaration by WHO (World Health Org’) that this is a global risk, then Stocks, Oil, Copper Beans and most commodities will drop further and faster. : Many tech & drug stocks have yet to blink with today’s mild correction scare (AAPL, SQ, SNAP, JNJ,…)

01-21-20  Despite a Global Virus scare stocks may run right back to new record highs as expected into our January 24th date. SP test of 3340 is the primary short term resistance levels to watch as we move into the end of the week. Even if stocks have another Bullish year, the current valuations should flatten the upward momentum and allow for some corrective action in February. Prices can continue higher than our target price and time window, but with Optimistic Sentiment measures and valuation metrics above 20 year highs, the upside action should become a bit heavy soon. (Boeing risk 250 to 290 continues to be the risk with a major lows due in 1st quarter, unless further delays beyond July are announced in the 1st Qtr’.)

01-15-20  Our 1st date on China Trade signing day reveals more skepticism & falling Soybeans, yet stocks are pushing to yet another record high overnight at 3300 SP. Moving above key upside targets makes Resistance challenging to target short term, yet we will keep  3340 as our key next level level where we look for topping action into the 24th.

01-13-20   Sentiment is extreme & can remain irrational short term. Jan’  24th is inflection date where we become more cautious. SP now above 3290 which allows for a surge to 3340. :  Any China Ag orders could boost market optimism. China will Buy – but when & how big? Stock market – raising cash & hedging short term  becomes a focus in the 2nd half of January.

01-11-20   Like 2016 – 2017 we may be entering the 2nd year of a recovery in stocks and 1st year of recovery in the economy. Economy is due to be in modest acceleration phase from 1st half 2020 until late 2021. 2020 is year of earnings execution to justify major run higher in stocks in late 2019.  8 to 11% returns are possible in 2020. Look for 2 week corrections from new highs to buy. (Jan’ 24th)

01-09-20  Overnight our often repeated main breakout target of 3283 has now been hit. If 3300 breached then 3320 – 3340 are minor overshoot levels to watch. Hedges can start being entered in this 3283 – 3353 zone basis March SP. We still expect the market to stay in record territory into the Trade signing date on the 15th. For now we would expect modest 3 to 5% pullbacks when the short term top finally arrives. Economy and earnings are turning higher and the Bull market will continue into an 11th year. Watch Jan’ 24th turn date.

01-06-20  Iran: These military events are typically short lived & Bullish for stocks once the reality of no economic impact on the US is understood. SP 3280’s to 3320’s current target in January 

{Follow model portfolio table & favored stocks below}

Order GTCStock Price


Model Portfolio Tracker:

2019 Open positions: new portfolio each calendar year

$100,000 Starting value 01-02-2020

As of close 02-14-2020: YTD 2020: 72% net long :  Profit $9,889 =+9.9% : SP YTD P/(L) =+4.3%

Symbol Name Action Qty Entry Date Entry Price Last Total Chg Total %Chg Total Profit
CRM Inc Buy 35 1/2/2020 163.92 189.95 26.03 15.88% 911.05
SBUX Starbucks Corp Buy 65 1/2/2020 88.12 89.28 1.16 1.32% 75.4
SPLK Splunk Inc Buy 35 1/2/2020 150.97 172.52 21.55 14.27% 754.25
FISV Fiserv Inc Buy 35 1/3/2020 116.37 122.32 5.95 5.11% 208.25
SPGI S&P Global Inc Buy 25 1/3/2020 274.5 307.65 33.15 12.08% 828.75
AXP American Express Company Buy 40 1/8/2020 125 135.87 10.87 8.70% 434.8
FIS Fidelity National Information Services Buy 35 1/8/2020 139.5 157.44 17.94 12.86% 627.9
GOOGL Alphabet Cl A Buy 3 1/8/2020 1400 1518.73 118.73 8.48% 356.19
TWLO Twilio Buy 45 1/8/2020 108.5 127.74 19.24 17.73% 865.8
AMZN Inc Buy 1 1/30/2020 1872 2134.87 262.87 14.04% 262.87
BYND Beyond Meat Inc Buy 35 1/30/2020 116 116.22 0.22 0.19% 7.7
NVDA Nvidia Corp Buy 14 2/11/2020 267 289.79 22.79 8.54% 319.06
BAM Brookfield Asset Management Inc Buy 50 2/12/2020 64 67.96 3.96 6.19% 198
DXCM Dexcom Buy 14 2/12/2020 246.5 283.91 37.41 15.18% 523.74
NOW Servicenow Inc Buy 10 2/12/2020 345 356.16 11.16 3.23% 111.6
AYX Alteryx Inc Buy 25 2/13/2020 144 158 14 9.72% 350
AMZN Inc Buy 1 2/14/2020 2127 2134.87 7.87 0.37% 7.87
Favored stocks Buy list as of 01-29-20

 Momentum stocks near highs: *AAPL Apple  *AMZN  Amazon : *ADBE Adobe :  *ACN Accenture : *AMED Amedisys  : *ATKR Atkore Int’ :  *BAM Brookfield Asset Mgt’ : *BAX Baxter *BX Blackstone  : *BYND Beyond Meat  :  *CPRT Copart : *CRM Salesforece : *CTAS Cintas :    *DXCM Dexcom : *FICO Fair Issac : *FIS : *FISV Fiserv : *FLIR Systems *GLD Gold :*GPN Global Payments   :*IHI Med Devices :  *LRCX Lam Research  : *MA Mastercard :  *MELI Mercadolibre :  *MSFT Microsoft : *MSI Motorola Solutions : *NDSN Nordson : *NOW Service Now *NVDA Nvidia*NXPI Nxp Semi’  : *PEGA Pega Systems  : *PLD Prologis : *PODD Insulet :*PYPL PayPal   :  *SHOP Shopify   : *SPGI S&P Global : *SPLK Splunk  :  *SPLV Low Volatility ETF for sideways to higher markets :  *SQ Square : *TFX Teleflex :  *TREX  : *TRMB Trimble : *TWLO Twilio  *UTX United Tech’ : *V  Visa  : *WORK Slack : *XHE=Healthcare : *ZM Zoom : *ZS ZScaler : *ZEN ZenDesk

Bullpen :       CDW  : COUP CoupaSoftware : CVS : DIS Disney : GS Goldman Sachs :  HON Honeywell :  INT World Fuel Service : JNJ Johnson&Johnson :   JPM JPMorgan  :  MRVL Marvel  :  SAN Banco Santander :  SBUX Starbucks  : SDC Smile Direct Club : SNAP STNE StoneCo  : AT&T : TGT Target  :  VZ Verizon VMW   VMWare : VEEV  Veeva  :  WLTW Willis Tower : WMT Walmart  : WRK  Westrock  WSM Williams Sonoma : ZBRA Zebra Tech’

ETF’s–>   *MOAT Value : XLB SPDR Materials :  IGE Natural Resources :  SOYB Soybeans :  EEM Emerging Markets ETF : COPX Copper :   SLV Silver  : GDX Gold Miners s: XLE Financials : KRE Regional Banks : SPY : QQQ  :  XLK  :  HACK Cyber security  : XLV HealthcareFINX=Fintech :*XHB Homebuilder ETF :  XLC media/communication

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)

2019: Profit=$24,070 =+24.5% : vs SP=+29.1%

01-05-20   The China trade signing will take place around the 15th which could create another inflection point or change of direction in stocks. Buying volatility as a hedge on rallies may be wise (VXX) in the upper 3200’s to lower 3300’s on SP. 

12-26-19  Medium term forecasts since summer called for end of July Top, an August correction and rally from October until a China Trade is signed or upper 3200’s SP is reached.  : Any news that newly discovered Boeing (BA) documents were harmful, sending stock under 320, may impact the overall market & economy if 737 Max approval is assumed delayed beyond 1st Qtr expectations.

12-23-19   We suspect a topping process around the assumed China – US trade deal signing ceremony in January. Seasonality supports stocks into mid January. Potential correction starting in January is currently estimated to be single digits % . Ideally SP will continue to our main target of 3280’s or higher before reversing into an overdue correction phase. Longer term we remain Bullish.

12-16-19   Further gains to  SP 3280’s by the time a trade deal signing ceremony occurs. 

12-12-19 It’s doubtful anyone expected a landslide vote for Brexit, a major Phase One Trade Deal with China and NAFTA II (USMCA) all being confirmed the same week. Add icing to the sentiment shift with the House failure to gain support on Impeachment as the tables now turn a 180. Stocks are already high & a short to medium term peak may be near, but longer term capital spending & GDP in the US and around the world may heat up in 2020 just when many were expecting a Recession. Should this economic turn occur – as we have postulated throughout the year – then optimism over a pro business Trump election may support markets more than normal.  

12-11-19  There was a less than Zero% chance the Fed would cut or raise rates this week & markets showed their disinterest just as they did regarding the Impeachment hearings. We favor no tariff hikes & higher stocks. 

12-05-19  … we continue to favor China deal remaining close enough to postpone the Trump tariffs. Look for…a short burst in stocks into year end –  to upper 3200’s if tariffs removed & agreement ready to sign.

11-16-19  SP broke out as Trump advisor Kudlow implied a Phase One deal with China merely required filling in the details.  

11-08-19   Ideal timing currently for signing a deal is prior to scheduled mid-December tariff hike. 

11-07-19     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.

11-03-19  Next swing target=3090 Dec’ S&P.  Year end potential = 3190’s Dec’ SP 500 Index.

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 & 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.

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. 


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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