Investor Spotlight

Sunday, August 5, 2018

Market Outlook

We are getting to the tail end of the second quarter earnings season. Over 80% of the $SPY have already reported earnings to date. 70 companies are slatted to report earnings this week (14% of the $SPY). This has been a good quarter with +80% of the companies beating their sales and earnings outlook. That has helped push the market higher. Since July 5th 'Follow Thru' day, all the 3 major indexes - $SPY, $DJI and $QQQ have gained +4% to date. The two major sectors, $XLK (Technology Sector) and $XLY (Consumer Discretionary Sector) account for +50% of the $SPY index. They have been the ones driving the markets higher this year.

We have 5 'distribution days' between the $SPY and the $NASDAQ. Market is in a 'Confirmed Uptrend' as of Thursday August 2nd. We do have to be a bit cautious this month from taking new positions though. August is traditionally a volatile and a low performing month. We have seen some profit taking from the leading growth stocks in the last two weeks. Some of the leading stocks have already made +20% gains and are now building new bases. This would be a good time to monitor and adjust the trailing stops to lock in profits. It's also a good time to buy some portfolio protection with options on $VIX. Its currently hovering around 11. We have experienced it getting as high as 50 in the month of August.

Market Performance

Currently the two leading markets in the world are the US + 6.2% with $SPY and Mexico + 5.2% with $EWW. The second largest economy China is in a bear territory. The leading index $QQQ is up a whopping + 15.6% year to date. I have been cautioning my readers and followers not to pay too much attention to the media but instead look at the data. US market will continue to do very well this year. US economy is purring along nicely and the data suggests:

Unemployment of +4% is the lowest we have seen in 50 years. Employers are now advertising for workers with no experience.
Interest rates are still low and businesses are making investments in equipment and robotics to increase the productivity of workers.
Consumer spending accounts for 70% of the US economy and with unemployment at an all time low, they are propping up the market with their spending.
This quarter over 80% of the $SPY companies have reported increased earnings and sales. That is what drives the price of stock higher.

Mentoring Program

If you would like to learn:

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

Enroll in our "Mentoring Program" There are just 5 spots left for the August/September classes. Reserve your spot now. It will be on a first come basis. Last quarter is traditionally the best quarter in the market. If your portfolio isn't + 15.6% year to date than seek help and don't let the uptrending market get away from you. 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: