Stock  Market  is  Data  Driven

Ignore all the noise in the market and look at what the data tells you when you look at a stock chart.  Last week all we had on tv and print media was about Mr. Kavanaugh - the supreme court nominee - or tweets from Mr. Trump on tariffs and his speech at the UN blasting at China and the WTO (World Trade Organization).  Jeremy Powell decided to raise interest rates and from the way everyone was discussing on tv, you would think it would lead to a recession.  Interest rates were over 4.5% at the start of the recession and we are no where close to that yet.  All the talk of North Korea and Iran pursuing their nuclear programs is now on the back burner.  Market keeps humming along without a misstep with all the media noise in the back ground. 

In my talks at the investors meetings in the local area, I quite often remark:

"Market has no religious or political bias"

Last week, Mr. Warren Buffett was interviewed on CNBC Morning Squawk Box show and he shared his views very well about the politics and mid term elections we are facing in just 5 weeks.  I will share with you some data on mid term elections in my post next week.  It will be quite an eye opener  Please listen to the link below of the interview:

https://youtu.be/56R_tMGRq0M 

Market  Performance  for  September

September is the worst month traditionally when you look over the performance over the last 50 years.  $SPY  exhibits a performance historically of  - 0.47%.   2017 and 2018 have been an exception since they both have been in a positive territory.  Performance for the 3 major indexes and the leading sector for the month of September is as follows:

• $QQQ   ... - 0.46%
• $SPY    ...  + 0.14%
• $DJI      ...  + 1.90%  
• $XLV     ...  + 2.54% (Health Care Sector)

Health care has been creeping up slowly and methodically since July of this year.  We have a gain of  +14%  in the sector since July of this year.  Institutions have been harvesting their profits from the leading stocks in the technology group - especially the software group and deploying them in the Health Care Sector.  Some of the leading names in this sector are $HCA, $CNC, $UNH, $AET to name a few.  They will all be reporting their 3rd quarter earnings in the next 2 to 3 weeks.  They have all been consolidating for the last couple of weeks.  

Mentoring  Program

 "The only thing that stands between you and your dreams is the will to try and the belief that it is actually possible"

By Joel Brown (entrepreneur)

Leading Growth Stock index  $QQQ  exhibits a performance of + 19.28%  since January of this year.  In 2017, it was just as stellar with a performance of  + 21.9%.  We are heading into the best 3 months of the year.  None of the news on tv and print media have derailed the market since the Brexit event in summer of 2016.  It pays to learn and understand the data of the stock charts and the performances of the leading sectors in the leading index.  

I have only 2 slots left for our  "Mentoring Program"  for the current quarter.  This will be a very busy and a very profitable quarter in the market.  Schedule a  FREE  30 minutes of  "Discovery Call"    with us and secure your spot now.  Let us mentor you to profit and Out Perform the Market.  If your financial advisor or hedge funds has not performed as well as what the leading Growth Stock index  $QQQ  has done with  + 19.28%  year to date, you ought to consider taking charge of your own portfolio management.  Don't procrastinate and miss out on the opportunity to make a huge difference in your portfolio.

Happy Trading!

Amin

  

Best  Quarters  Ahead

Ever since 1896 when the  $DOW  started trading, each of the next 2 quarters - 4th quarter and the 1st quarter - have closed higher  73.3%  of the time during the midterm Presidential cycle.  LPL Financial Inc. published a chart last week on tweeter where they showed that the next 3 quarters during the Presidential mid term cycle, the performance of the market has been +4.0%, +5% and +3.6%  respectively.  That's a phenomenal performance.  Historically the next 3 quarters performance has been  +3.6%, +2.26%  and  +1.58%.  Presidential cycle midterm performance historically would be  +5.2%  better.  We are heading into traditionally the best quarters in the market.  

Market  Outlook  and  Performance

Currently the market is still in a  "Confirmed Uptrend"  according to IBD(Investors Business Daily).  We do have an elevated count of 11  "distribution days".   Most of those days have been piled up in the last 13 trading days since Sept 5th.  A few more days of heavy selling by the institutions could very easily derail the market and the tone of the market could change to  "Uptrend Under Pressure"  just as easily.  We have seen the major indexes - $DJI, $SPY  and  $QQQ  slip down from the 8 day ema(exponential moving average all the way down to the 50 day sma(simple moving average within 3 to 5 trading days of heavy institutional selling.  We have witnessed the evidence of such institutional selling 5 times this year.  Institutions do harvest profits from the leading stocks in the leading sectors on a regular basis.  

Year to date Market performance of the 3 major indexes that I monitor is highlighted below.  I have indicated in parenthesis, where I anticipate they will be by the year end, if current momentum keeps up with the mid term Presidential cycle history :

1. $DJI      ... + 8.2%  (27,800)
2. $SPY     ... + 9.4% (306)
3. $QQQ   ... + 17.9% (200)

Recent  Breakouts

Two weeks ago, I had published a list of 10 stocks from the leading sectors of Transportation, Health Care and Retail.  8 of those stocks ($CSX, $UAL, $CTAS, $HCA, $UNH, $LOW, $GWW, $ROST) broke out in heavy volume on Friday Sept 21st while the 2 indexes - $SPY  and  $QQQ  had a distribution day.  This is what institutional support looks like.  Institutions account for  75%  to  80%  of the trading volume everyday in the market.  As a retail investor and a trader, one needs to follow the lead of the institutions.  These 8 stocks are setting up a secondary buy point now.  Some of them are extended and have already surpassed their ideal buy points.  

Mentoring  Program

If no one ever took risks, Michelangelo would have painted the Sistine floor

By  Neil Simon

Leading Growth Stock index  $QQQ  has a performance of +17.9%  year to date.  The best 3 quarters are ahead of us.  We could add another  +17.9%  performance to the leading Growth Stock index with the tail wind of the mid term Presidential cycle.

Is your portfolio lagging the leading Growth Stock Index  $QQQ? 

I am opening up just 2 more slots for our  "Mentoring Program"  for the month of October.  It will be on a first come first served basis.  Schedule a FREE 30 minutes of  "Discovery Call"  with us and secure your spot now.  Let us mentor you to profit and Out Perform the Market.  Next 3 quarters are the best times to be in the market.  Don't procrastinate and miss out on the opportunity to make a difference in your portfolio. 

Happy Trading!

Amin

Irrational  Exuberance

Its the 10th anniversary of the financial crisis and Dr. Robert Schiller - a Nobel price winning Yale economist and a professor has written a book titled  "Irrational Exuberance".  This was the expression that  Mr. Alan Greenspan also used in 1996 and popularized the expression.  Both Dr. Schiller currently and Mr. Greenspan in 1996 claimed that the stock market was over valued.  The world market dropped by  4%  when Mr. Greenspan uttered this famous expression.  Stock market however went on to make further gains for the next 4 and a 1/2 years.  The stock market got valued even higher for the next several years until the dot com bubble burst in the year 2000.  CAPE ratio (price of stock divided by 10 year earnings average) currently is  33  and Dr. Schiller considers that to be too high.  He also does say that the  CAPE  ratio got up to  45  before the 2000 dot com bubble burst.

I tweeted (@spotlightamin) the video of the interview of  Dr. Schiller by Yahoo finance reporter Alexis Christoforous conducted on Friday Sept 14th.  In the interview  Dr. Schiller clarified that he is not predicting a recession or any kind of a market crash imminently.  He was very wise to have a disclaimer that economists are not good at predicting such things.  He did however say that most recessions are mild.  Stock market has been known to continue making further gains even when the market is considered overvalued by the academia.  Lesson learnt is:

  "Market really doesn't care about anyones opinions or feelings"   

Market  Outlook

As a retail trader and an investor, its best to look at the data and make a judgement based on that rather than acting on how you feel about the market or the stock that you are investing in.  The market is healthy and the primary trend is still strong.  We continue to make higher highs and higher lows.  That is what a healthy bull market looks like.  Economy is strong with only 3.8% unemployment rate.  Business optimism is high - just as it was in the President Reagans era.  Last quarter GDP(Gross domestic product) was at  +4%  and that's the highest it has been during this recovery period.

My analysis of the data indicates to me that we had a bullish market for 17 years from 1983 to 2000.  $NASDAQ  gained 976%  in those 17 years.  Looking over the weekly charts of the leading Growth Stock Index  $QQQ,  we had a bullish trend from March 2009 to 2014.  Year 2015 the market was digesting its gains and consolidating.  The new bull market began in Feb of 2016 and we are now  2.5  years in the new bullish trend.  This bull market could last  16.5  years like it did from 1983 to 2000 dot com bubble.  Markets don't just go straight up of course.  There will be corrections along the way and as retail investors, we just have to get defensive when the   "Distribution days"   gets elevated.  Currently we have 10  "Distribution Days"  between the  $SPY  and the  $NASDAQ.  That is a cause of concern.  4 of those days will however fall off in the coming week because they will be more than 25 days old.   

Mentoring  Program 

"What's dangerous is not to evolve"

By Jeff Bezos (Amazon founder and CEO)

From  2010  to  Aug 2018, $SPY(general market performance)  has performed  +171%  while  $QQQ(growth stock performance) has out performed to  +330%.  Growth stocks outperform the general market by a factor of 2 to 2.5 times.  In the last 12 months,  $QQQ  has performed  +26.40%

Is your portfolio lagging the leading Growth Stock Index $QQQ? 

Schedule a  FREE  30 minutes of  "Discovery Call"   with us and let us mentor you to profit in the market.  We have just a couple of spots left for the month of October.  Secure your spot now to profit in the coming quarter.  We are heading into traditionally the best quarter of the year.  Don't procrastinate and miss the boat to making a difference in your portfolio.

Happy Trading!

Amin

+18%  Profit  within  17  Trading  days

Earnings report always poses a risk of eroding your profits in a stock.  $FIVE  trade that I had highlighted last week already was showing  + 12%  profit within 13 days of initiating the trade on August 15th.  Earnings was slated to be announced Sept 6th Thursday after the market close.  One of the best ways to mitigate the risk is to harvest partial profits prior to the earnings announcement.  It's always a good idea to lock in some gains by taking a partial position off the table.  There is never a guarantee that the stock will react positively from an earnings announcement. 

$FIVE  had gained  +25%  during the earnings announcement on June 7th.  This has been a leading retail stock ever since it surged  +25%  during the last earnings.  In order to mitigate the risk and lock in some gains, 1/2 of the position was closed out at $114.47 for a gain of  +10%.  The other 1/2 of the position was left to take advantage of the possibility of stock surging again.  After earnings announcement on Friday Sept 7th, the stock surged to  $130.89  for a gain of  +26%.  $FIVE  stock trade attained a cumulative gain of  +18%   for both 1/2 positions added togather. 

$RH  is a similar retail stock that exhibited the same characteristics as the  $FIVE.  It surged  +21%   after the earnings report on June 12th, triggering an  "8 week hold rule".  Unfortunately,  $RH  dropped by  -21%  within 4 days after the earnings announcement on Tuesday Sept 4th.  This is why it makes sense to lock in your gains and just leave a partial position to mitigate the risk of bad earnings surprise.   

Market  Outlook

Market is still in a  "Confirmed Uptrend"  according to IBD (Investors Business Daily).  We do have an elevated count of 10  "Distribution Days"  -  4 of which were just piled on last week.  There is a cause of concern heading into the second week in September.  August was a phenomenal month with  $QQQ  posting  +5.78%  gain.  This was unsustainable and we quickly gave away  -2.97%  of it just last week.  September is traditionally the worst performing month looking over the data for the past 50 years.  Its a good idea to raise some  CASH  now and adjust the trailing stops to lock in gains that you may have in your Growth Stock positions. 

Currently the Technology stocks are under pressure and there may be some profit taking going on.  $QQQ  was up  +20%  as of  end of August.  Health Care, Transportation and Retail related stocks are in the lime light right now.  Here are some of the stocks that I am monitoring this week.  They are extended right now just as the overall market is.  I have highlighted the resistance/support  line in parenthesis:  

1. $CSX   ...  (72.22)
2. $UAL    ...  (81.91)
3. $CNC   ...  (143.79)
4. $CTAS ...  (212.27)
5. $HCA   ...  (130.57)
6. $UNH   ...  (269.14)
7. $LOW   ...  (108.01)
8. $GWW  ...  (347.20)
9. $WSM   ...  (67.74)  
10. $ROST  ...  (95.57)  

Mentoring  Program

I am a devout follower of IBD (Investors Business Daily) style of investing/trading Growth Stocks.  The chief reason being is that Growth Stocks tend to perform 2 to 2 and 1/2 times better than the performance of the general market as measured by the performance of  $SPY.  As of end of August this year, $SPY had gained just  +9%  year while the leading growth Stock index  $QQQ  had gained  +20%.  Third quarter is the best performing quarter followed by a stellar performing January as well.

Is your portfolio lagging the leading Growth Stock index?

If it is than do yourself a favour and get on board with our mentoring Program.  I have identified over 35 growth stocks such as  $FIVE  that can enable us to Out Perform the leading index  $QQQ.  Let us help you with your trading  and investing with our individualized mentoring program.

Schedule a  FREE  30 minutes of  "Discovery Call"  with us and help you to profit in the following quarter.  Secure your spot now to profit in the coming quarter.

Happy Trading!

Amin

+12%  Profit  within  13  Trading days utilizing  8  week  hold  rule

Last week I had shared a trade on  $CTRL  that gained  +16.35%  profit within 6 days.  This week I will share a similar trade on  $FIVE  that  gained  +12%  profit within 13 trading days to date.  Both these trades had one thing in common.  They both surged over  +20%  within 3 weeks from its buy point, triggering an  "8 week Hold Rule".  Mr. William J. O'Neil (Founder of Investors Business Daily) came up with this rule which states:

"If your stock gains +20% or more within 1 to 3 weeks of a proper breakout, hold it for atleast 8 weeks"

Stocks with such a powerful move in volume that is sometimes 5 to 8 times the normal average trading volume often become the biggest winners.  This sort of powerful surge is a sign that institutions are really interested in grabbing every share of the stock they can lay their hands on.  Stocks will often consolidate soon after such a powerful move for several weeks.  Institutions usually will start accumulating shares again within this 8 week time frame or possibly soon after that.  This was an observation made by Mr. William J. O'Neil and he came up with this 8 week hold rule.

Trade  Plan  For  $FIVE

June 7th was the earnings report for the 1st quarter.  Institutions reacted positively and the stock surged over  +20%  within a week.  Trading volume was 12 times the normal average trading volume that day.  This was a foot print left by the institutions indicating their interest in acquiring some more shares of this winning stock.  Stock began consolidating tightly and smoothly and never breached the 34 day ema (exponential moving average).  Stock began hovering tightly around  $104.09  buy point for 4 days of Tuesday August 7th thru Friday August 10th.  Trade was initiated first thing the following Monday August 13th.  Here are the details of the trade plan:

Entry: $103.99 (got filled on Wednesday Aug 15th)

Exit: For initial profit target  $116.47 for a  +12% gain

Exit: For loss target  $98.79 for a  -5% loss

Stock met its profit target precisely at  $116.47  on Friday August 31st.  Stock is once again trading tightly and orderly for the past 6 trading days as it approaches its earnings announcement on Thursday September 6th.  Stock had surged more than  +10%  within 3 days prior to earnings in June and went on to gain an additional  +20%  within a week after the earnings announcement.  Currently I plan to hold onto the position until wednesday before considering harvesting profits.  Stock is currently trading above the 8 day ema for the last 4 weeks in a very orderly fashion.  Follow along with me on this trade and I will share with you how I mitigate the risk of earnings day on Thursday  September  6th with this stock. 

Mentoring  Program

"Don't be afraid to take a big step when one is indicated. You can't cross a chasm in two small jumps"

By David Lloyd George (British statesman) 

Leading Growth Stock index  $QQQ  is  + 19.83%  year to date.  August month delivered a whopping  +5.78%.  Best trading months are from October through January.  Is your portfolio lagging the leading Growth Stock index?  If it is than take that big leaping jump and get on board with our mentoring program.  Currently my students and I have identified  35  such leading growth stocks that are meeting our 8 week hold rule.  Let us help you with your trading and investing with our individualized  mentoring program.

Schedule a  FREE  30 minutes of  "Discovery Call"   with us and let us help you to profit in the market.  We only have a very limited number of spots left for the fall.  Secure your spot now to take advantage of the best months ahead in the market.

Happy Trading!

Amin