Investor Spotlight

You Can TIME The Market ... YES

Ideal time to get in the market is when IBD(Investors Business Daily) changes its market pulse to "Market in Confirmed Uptrend". On Wednesday Nov 28th, we had a confirmation of the 4th day of attempted rally in the market. $SPY as well as $QQQ had surged from the lows of April 2nd and heading up from the 400 day sma(simple moving average) towards the 200 day sma. Thursday was an ideal time to start taking a small position in the leading stocks. Leading Growth Stocks tend to break out of the pack in the first week or so and start making gains immediately. We had 7 weeks of heavy institutional selling since the beginning of October. Migrating to CASH as of October 5th was an appropriate defensive action to take with your portfolio.

Market Outlook

Its always best to look at the data that the market provides. I know its very hard to control emotions of fear when the market continues to make all time lows. In my post last week I mentioned that the market could go lower further -5% towards the February lows if the institutions continue to exit the market. Conversely I also suggested to the possibilities of the market surging over +9.74% within 4 weeks like it did so in January of this year. Retail investors have very little control over what the market does. We have to watch the behaviour of the institutions since they are the ones that determine the direction of the market.

Here is the performance of the 3 major indexes as well as the leading sector last week:

$SPY ... + 4.71%
$DJI ... + 5.16%
$QQQ ... + 6.38%
$XLV ... + 6.95% (Health Care Sector)

Stock Positions Initiated

Its critical to have a strong Stock Watch List prepared when the market is correcting like it did since the beginning of October. Being in CASH allows you to preserve your emotional capital as well. This allows you to focus on the upcoming opportunities. Market is exhibiting a very bullish stance right now. December is traditionally the best performing month. We have winds to our back right now. The 4th quarter and the two following quarters after the mid term elections are historically the best performing quarters.

There were 14 Health Care stocks listed in my blog post on November 18th. Small stock positions were initiated at market open on Thursday November 29th just when IBD changed its market pulse to "Market in Confirmed Uptrend". These are the stocks that survived the market carnage. They are all exhibiting an RS (relative strength) ratings above 90. They are all holding up above the 8 day ema(exponential moving average) while the $QQQ the leading Growth Stock index is still below the 200 day sma. This is what the institutional support looks like. They offer the best odds of surging in price with institutional support. They are already + 1.02% within 2 days. I have indicated the entry price at market open on Thursday.

$AMED ... 132.75
$BEAT ... 69.73
$CNC ... 140.12
$EHC ... 72.54
$ESRX ... 100.41
$EW ... 160.67
$HCA ... 143.52
$HMSY ... 34.76
$HZNP ... 20.38
$ILMN ... 332.00
$MEDP ... 57.96
$MMSI ... 61.20
$PRAH ... 110.01
$UNH ... 280.43

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