Investor Spotlight

Sunday, July 16, 2017

My Market Observations

Two weeks ago, it appeared that the institutions were rotating out of the Technology Sector and into Health Care, Transportation, or Home Builders sector. On Friday July 14th, $JPM, $C and $WFC reported earnings and the market did not react very favourably. That put a dent in the Financial Sector. Since the institutions primarily dictate the movement of the stocks, it is prudent for retail investors to monitor the stocks on their Watch List. $CPA (Copa Airlines) broke out on Wednesday July 12th in volume that was twice the normal average daily volume. Stock was being accumulated by the institutions soon after the July 4th holidays. They favoured this stock out of all the other airlines. Retail investors should have made the decision to follow the institutions and start accumulating this stock on Wednesday July 12th when it punched through its resistance of $125.78 (buy point of $125.88 which is 10 cents above the resistance). Volume was the confirmation signal that the retail investors should have been paying attention to.

Market Status

I still have a bullish bias towards the market. Markets don't always go straight up and there is always a counter trend in a bullish trend before the market adjusts and goes back into its uptrend trajectory. Currently, IBD(Investors Business Daily) has "Market Uptrend Resumes" as a market status. Volume on the major indexex , $SPY n $QQQ is low and we generally would like to see volume higher than average daily volume when the market resumes its uptrend. Don't let that stop you from taking a small position in the leading stocks that are in the leading sector. Last year we had a "Follow thru" day on July 1st and the market just took off for a +10% gain within 6 weeks.

Stocks to Monitor This Week

My analysis of the market performance since the beginning of July is as follows:

$DJI ... +0.74%
$SPY ... +1.38%
$QQQ ... +5.93%
$XLK ... +4.64%

$XLK (Technology Sector) has been the leading sector during the last 2 weeks. We are starting out with the second quarter earnings season this week. $V, $MSFT, $SWKS and $NFLX are just some of the stocks that will be in the earnings confessional booth this week. They have been up +4% to +10% in two weeks of July, leading up to the earnings this week. Their earnings will propel the market up or down, depending on how the institutions react to the earnings. These are the stocks that I plan to watch this week. Their performance for the last 2 weeks is highlighted.

$AMAT +12.46%
$LRCX + 12.93%
$NVDA +18.39%

Mentoring Service

Do you wonder How I come up with the Winning Stocks on My Stock Watch List?

Take action and learn How I do it to outperform the market.

Don't procrastinate and miss out on the rally. $QQQ has been up +27% since July 18th 2016. Has your portfolio done that?