Sunday, August 6, 2017

August  Will  Be  A  Challenging  Month

We are nearing the end of the 2nd quarter earnings season, with over  80%  of the  S@P 500 companies already having reported their earnings.   Increased sales and increased earnings is what drives the price of the Growth Stocks up.   Month of July was a stellar month for the Growth Stocks.   If you had stayed engaged with the market during one of the worst months of the year, you were able to walk away with a sizable gain to your portfolio in July.  

Why am I than cautioning my readers about the month of August?   Lets look at the data and let that drive our decision making process in the market.   Market took off soon after the elections on  Nov 9th 2016  and most of the traders were completely taken by surprise.   They missed the initial rally.   We may have a very similar situation occur in August.   I would like my readers to be able to take the advantage of the opportunity to profit if that does happen again.   Here are the results of the performance of the 3 major indexes since the   Nov 8th  "follow thru"  day: 

  1. $SPY  ... + 15.55% (+18.66% annualized)
  2. $DJI   ...  + 20.51% (+24.6%  annualized)
  3. $QQQ ... + 26.54% (+31.85% annualized)
August is also one of our poorest performing months and last year the market consolidated for 5 weeks.   We could face a very similar situation this year.   There is also the possibility that the market could correct  -5%   and  $DJI   could drop a 1,000 points.   This is in the realm of the possibilities.   $QQQ   did drop  -5%   between  6/8  and  7/6  of this year.    Utilizing trailing stops on your winning position would be the prudent thing to do this month.

Current  Market  Conditions 

There is a lot of noise in the market right now with the political rhetoric of building the wall south of our border and having a major reshuffle of the white house staff.   We r not getting any of the Presidents major agendas through the congress.   There is debt ceiling to be concerned with and who knows when Janet Yellen will start  YELLING   raise the rates ... raise the rates ... raise the rates.   All I know is data.   $DJI  keeps going up a 1,000 points every other month since the end of October  2016.   Mexican stock market is roaring and is  +28%   and  the Indian stock market is  +30%   year to date.   Price of oil is staying within  +  or  -  10%  of  $45,  depending on what happens to the price of the US dollar.   Oil is priced in US dollar.   $UUP (proxy for the price of US dollar)  is  -8.60%  for the year.   For the past 13 sessions,  $SPY,  $QQQ  and the leading Technology Sector  $XLK  has been trading tightly in a sideways pattern.   They are like coiled springs and they could pop either up or down.   The following 6 Growth Stocks (small and mid cap) etf's are also trading tightly for the past 13 sessions:

  1. $EEM
  2. $IVW
  3. $EWB
  4. $VUG
  5. $IWF
  6. $VGT
Small and mid caps have to participate in the market in order to sustain this rally.   It would worth watching these etf's and the major indexes to see where the institutions are going to be participating with their purchases.   Look over my Twitter @spotlightamin first thing on Monday morning August 7th,  for a list 22 stocks that I shall be monitoring at market open.   Some of them have surpassed their ideal buy point and may be good candidates for a conservative short term Credit Spread Option Trade.

Mentoring  Program

If you would like to learn:

How I Identify Winning Stocks Consistently and How I Trade to Outperform the Market


Enroll in our  "Mentoring Program"   There are very few limited spots left for the August classes.   Reserve your spot now.   Last quarter is traditionally the best quarter in the market.   Don't procrastinate and take control of your financial future.   Your financial advisor is not doing you any favours.   They don't know How to Trade or Invest wisely for you.

Schedule a FREE 30 minutes of  "Discovery Call"   with us.  Contact us at:

investorspotlight@gmail.com 


to schedule your appointment with us to see if you qualify for our program.


Happy Trading!

Amin


DISCLAIMER



Do not take a position unless you are prepared to sustain a TOTAL LOSS. Your loss could include the money you invested as well as commissions and transaction charges.


The Information I provide is for education and informational purposes only. The Information provided is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information provided is general in nature and is not specific to you or anyone else.


YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A LICENSED PROFESSIONAL. You understand that you are using this Information AT YOUR OWN RISK.