June 12-16, 2017: Market Forecasts, Highlights & Great Reads…
I have a lot to write about this week, so if you are pressed for time, here is the bullet point breakdown. Simply click on what you want to read and go right there.
However, shouldn’t you maybe just a take a few minutes and soak it all in? Slow is faster in this day and age in my opinion.
A Look Ahead
Last Friday (June 9th) saw some pretty hard selling in the technology sector. SMH was off 4.4% while other individual tech names were off even more.
Naturally this brought out the narratives that perhaps this was the start of something a bit more ominous. But once cooler heads prevailed and data was crunched it appears that yet again we are likely to see this dip bought. This one however, is not some mindless reaction. Note the data below from Nautilus Capital.
Do large 1-day declines in relative strength for Technology after significant 12-month advances argue conclusively for a termination of a trend? No. We analyzed other times in which Tech/SPX closed down by 2.5% after technology had gained >30% over the previous 12-months. In the extreme short-term, Tech tended to under-perform the SPX, while outperforming it on a three month and six-month basis.
Source: Nautilus Capital
- I/Aspen are long a XLK Calls to take advantage of this scenario.
- We will also be looking to get long AMGN. The move off the May lows was key and will provide good gains going forward….if you pick your spots carefully
- Also looking good from a short perspective is LEN and USO
- A longer-term play in FX is long AUD/USD…this has the potential for a big total return.
Last week I was discussing the possible break higher in GDX. We finally got that break higher out of the triangle and it allowed us to lock in some nice gains on the trade.
Yes, there was more time on the Call Spread as it did not expire until yesterday (June 16th), but here was the reason I closed it.
- A likely rally in the Dollar Index (DXC)
As it turned out, that was the right call. While I expect this move higher in DXC to be temporary, it could linger on for a week or more. That would not serve us well with a GDX Call Spread due to expire on June 16th.
If you are a MotiveWave subscriber and would like to have DeMark’s TD Sequential for your charts, shoot me an email (firstname.lastname@example.org) and I will send you over the link to download it. (cost is $95)
Nice call on the GLD Call Spread back on May 25th! I plan to use the proceeds to pay for my trip to The Trader’s Round Table in October. I have already saved my spot and am looking forward to meeting you and the others in person. Have a great weekend!
Must Reads, Listens and Watches
Wow – where to begin this week. Lot’s to highlight.
- Simple vs. Complex Trading: Which Works for Your Personality?
- The Art of Value Investing
- Why I Feel Like Investor Road Kill In This Market
- Holding Cash Is Like Holding A Really Cheap Call Option
- GM Schedules Additional Plant Downtime – not sure how this is not resonating across markets and growing concern over economic slowdown/recession
- Fear of (Market) Heights
- Mark Yusko’s 10 Market Surprises
- Bill Fleckenstein and Jesse Felder Discuss Central Bankers…(I Mean Central Planners)
Great interview with Michael Lewitt on RealVision TV
This week’s question deals with projecting price/profit targets in GLD: Read Now
Would you mind sharing your approach in determining profit targets?
Kyle R. – Jackson Hole, WY
If you have a trading/investing question, don’t be shy. Ask your question now and/or read the archived Q&A’s.
Until next week, good trading.