Investor Spotlight

Scale into the Market NOW

"Not taking a risk is riskier than taking a risk"

By Mindy Grossman, CEO of WW International

Most retail traders and investors have dealt with a gut wrenching performance of the stock market in the last 12 weeks. Growth stock investors that were disciplined and followed the IBD(Investors Business Daily) rules however had already started migrating to CASH as of October 10th. They limited their exposure and exited the market when the market went into a correction. They avoided the erosion of their trading capital as well as their emotional capital in the last 12 weeks. It allowed them to sit out the market and take the time to sharpen their trading skills instead.

IBD changed the market pulse to "Market in a Confirmed Uptrend" as of the close of the trading session on Friday Jan 4th. That's a signal to Growth Stock investors to start putting their CASH to work by initiating small positions on stocks that are breaking out now. The last 2 "Follow Thru" days of Nov 7th and Nov 28th had fizzled. There is no guarantee that this "Follow Thru" day will work either. One has to take the risk now and be exposed to the market. These are the ideal times to initiate small test positions. When the "Follow Thru" days do materialize, one can very quickly attain a +15% to +20% profits within 1 week to 3 weeks.

Market Analysis

Market made a dramatic turn after attaining a low on Dec 24th. We had a rally of 4 days in the last 7 trading sessions. Here are the results of the performance of the 4 major indexex as well as the 3 leading sectors:

$DJI (+7.5%),
$SPY (+7.7%)
$QQQ (+8.9%)
$RUT (+9.0%)
$XRT (+10.9%)
$XLY (+9.9%)
$XLK (+6.6%)

It makes sense to focus our attention on the leading stocks in the leading sector. Currently there are a lot of stocks in the retail, consumer discretionary and technology sector that ought to be on your Stock Watch List. You can review some of my weekly posts of October and November where I highlighted some of those stocks. Use that as a guideline to generate a list of your own. The 3 indexex ($DJI, $SPY,$QQQ) are still - 4% to - 5% below the down sloping 50 day sma(simple moving average). Its best to look at only those stocks that are close to the 50 day sma, exhibiting a strong upward trending RS line and the 50 day sma line is not as pronounced downward sloping as the indexes are. These are the ones that are leading the market now.

Mentoring Service

Did your portfolio suffer a -20% decline prior to the Christmas day?

If it did than you need to start asking questions about what it is that you are doing wrong! 2018 was a bullish year if you had migrated to CASH after October 10th.

Make a New Year's resolution to get it right.

Learn:

How to find winning Growth Stocks?
How to Buy the Stocks Right?
How to Plan your Trade for Profit, Loss and Time in the trade?
How to Sell your Stocks Right?
How to TIME the market?

I shall be opening up just a few slots for mentoring in 2019. If you are committed to improving your performance in 2019 than Schedule a FREE 30 minutes of "Discovery Call" with us and see how best we can help you become a consistent and a profitable trader and an investor in 2019. It's going to be a very challenging year. 2016 and 2017 were the easier markets to make the money. The strategies that worked in easier markets will not work well in 2019. Don't pass up the opportunity of making a difference in your portfolio. Start out the new year with a resolution to invest in your education.