Market Timing & Best Stocks Trading Strategy

Market Timing and Stock Trading Strategy for the week of 2/4/2018

In last week’s market update I wrote:

But let’s not get complacent.

At some time in the future – who knows when I certainly don’t – this market will reverse.

At that time I’ll look to go short with mostly contra ETF’s.

I don’t believe it’s time to go short yet, but let’s see what the charts are telling us.

Topics in this weeks edition:

  1. Stock Market activity in review
  2. Weekly Market
  3. Daily Market
  4. Market Posture

1) Stock Market activity in review

The market was knocked for a 4% drop last week – plus or minus a few fractions of percentage points depending which headline index selected for measurement.

Apple-Inc.-Is-Cutting-iPhone-Production-Time-To-Sell-AAPL-Stock

Apple-Inc.-Is-Cutting-iPhone-Production-Time-To-Sell-AAPL-Stock

Early in the week, a combination of weaker than expected earnings, Fed interest rate hike announcements and the actuality of rising interest rates affected an extremely overbought market.

In addition…

Apple announced the reduced production of its flagship iPhone – shouldn’t really be a surprise.  After all who can really justify $1000 for a phone unless you are an Apple fanatic?  There are plenty of just-as-good phones available for less than half that.

The controversial FBI memo was circulated which seemed to indicate a rotten core in one of the nations most uncontrolled agencies.

Plenty of new items to worry about so the knee-jerk reaction is to sell stocks if you have them.

But as always, stock market activity tends to be overdone in both directions.

So where do we go from here?

Let’s look at the charts.

2) Weekly Market

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Market Timing & Best Stocks Trading Strategy

Market Timing and Stock Trading Strategy for the week of 1/29/2018

Topics in this weeks edition:

  1. Stock Market activity in review
  2. Weekly Market remains strong
  3. Daily Market remains strong
  4. Suggested market posture for next weeks trading & 100 best stocks

1) Stock Market activity in review

This market is not providing many pullbacks for investors to get in the game.

SPX Best Stock Buy Days

SPX Best Stock Buy Days

It seems every time there is a pullback or even a “flat” day, the bulls rush in an take advantage of perceived “bargains”.

This is exactly the action that took place this week.

Monday’s market was up, Tuesday, Wednesday, and Thursday’s market was flat.

Friday trading pushed the headline indexes to new highs – again.

But lets’ not get carried away.

By many measures the market is overbought – but there are many buyers including institutional buyers that are not yet invested as much as they want to be.

So as long as the supply/demand balance is heavier on the demand side I’ll be looking for stocks to buy.

But not just any stocks.

  1. Look for profitable buy points as explained in the how to buy stocks strategy.
  2. Only buy stocks suggested on the best stocks watchlist.

While looking for stocks watch the Market Timing Indicator for signs of weakness.  Any weakness will show on the daily time-frame first.

Here is the current analysis of market strength on the weekly and daily time-frames.

2) Weekly Market remains strong

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Profitable Investing & Market Timing Update for 1/19/2018

Profitable Investing & Market Timing Review

In last weeks market review I wrote:

Next weeks approach will consist of watching stocks in the stock watchlist for stocks that are exhibiting solid buy opportunities.

Portfolio changes for the week consisted of selling ZAGG, and purchasing MGLN, BIG, & HFC.

Topics in this weeks review:

  1. Stock Market noteworthy events
  2. Weekly Market demand remains strong
  3. Daily Market remains strong but is weakness starting to show?
  4. Suggested market posture for next weeks trading & 100 best stocks

1) Stock Market noteworthy events

Last week was a short trading week due to the Monday holiday.

That didn’t stop the bulls from pushing the headline indexes to record highs – even though the major news item was a potential Government shutdown.

The ineptitude in Washington meant that the Government was officially closed (except for essential services) as of Friday midnight.

best stocksLawmakers are still negotiating over items that are just really excuses for not agreeing on a budget – as if having a budget really makes a difference to THEIR spending of OUR money?

The worst for me is that a close-by national forest local lake will now have two armed guards – where usually there is no-one – who will be there to stop me from fishing.  Just ridiculous!

But I digress…

Early in the week, GE issued more bad earnings news (is that really news?).  GE stock price has now been down 10 MONTHs in a row and ended the week at $16.26.

The middle of the week saw disappointing news from IBM and American Express.

But no matter, good earnings expectations pushed many stocks higher with headline indexes ending the week at record highs.

2) Weekly Market Timing indicator remains strong

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Profitable Investing & Market Timing Update for 1/12/2018

Topics included in this week’s Profitable Investing & Market Timing Review

In last weeks market review I wrote:

These are all characteristics of an extremely bullish market…

Here we are one week later and the market as measured by the SPX is now more than 1.5% higher from when I wrote those words.  It PAYS to watch the supply & demand for stocks.  The stock portfolio growth is now pushing 50% on an annualized basis!

facebook stock analysisHere are the topics in this weeks review:

  1. Facebook stock analysis – what to do now?
  2. Weekly Market Timing indicator remains strong
  3. Daily Market Timing continues building strength
  4. Suggested market posture for next weeks trading & 100 best stocks

1) Facebook stock analysis – what to do now?

Facebook stock had a tough day on Friday.

View the facebook stock analysis video and the following suggestions on Facebook stock.

On Thursday Facebook announced that they would create “more meaningful interactions” on their platform by prioritizing content from family and friends posts over new feeds.

There was a huge discussion about the effect of this change on earnings.  Some argued that subscriber interaction would increase in turn leading to more ad revenue.  Others argued that the opposite would happen.

No-one really knows but there are lots of predictions.

The bottom line is that even with the approximately 4% drop in Facebooks stock price the stock is still in a long term uptrend.

Facebook has been in my portfolio for 500 today’s tomorrow.  That position is up 41.85% over that time.  It certainly has not been a barn burner but the question is what to do now?

View the facebook stock analysis video.

2) Weekly Market Timing indicator remains strong

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Profitable Investing & Market Timing Update for 1/05/2018

Topics included in this week’s Profitable Investing & Market Timing Review

Also, watch the accompanying video:

  1. Why Intel CEO Brian Krzanich should be fired immediately
  2. Weekly Market Timing indicator remains strong
  3. Daily Market Timing returns to strength as demand for stocks increase sharply
  4. Suggested market posture for next weeks trading & stocks to watch

1) Brian Krzanich Fired

Fire Brian KrzanichYes, Intel was on my list hot stocks list for a purchase this week if it moved up.

Instead, it moved down sharply.  Good thing I waited.

Maybe the bad news rumbling around in the company held the price down?

Either way, on Wednesday the news broke regarding a security flaw in every microprocessor that Intel had manufactured in something like the last 10 to 15 years.

Referred to as Spectre and Meltdown, the fix was rumored to decrease computer performance by up to 30%.  Calls were already being made for Intel to replace every flawed chip!

However, recent developments have shown that the fix will not have that much impact and most users won’t even notice the difference.  But the damage was done, Intel’s stock price sank but has since recovered some of the loss.

But more damaging to the company are the reports regarding Brian Krzanich’s actions after he knew about the problem but the rest of us didn’t.

Reportedly he sold his stock, exercised his options, and flipped the optioned stock before the news was public.

In other words, reports say he traded on provable insider trading in an extremely egregious way.  If the reports are wrong then I will retract this text and apologize – but reports like this have a way of being true.

Did he really think we wouldn’t find out?  After all, stock transactions made by corporate officers are public information after 30 days.

Dana Blankenhorn over at InvestorPlace wrote a great article at this link.

Market Timing Indicator 01052018That’s enough about Intel. They didn’t even qualify for this week’s best stocks watchlist.

The status of the market timing indicator is more important anyway.

2) Weekly Market Timing indicator remains strong

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Profitable Investing & Market Timing Update for 12/29/2017

Topics included in this week’s Profitable Investing & Market Timing Review

Also watch accompanying video:

  1. Stock market outlook for 2018
  2. Weekly Market Timing indicator remains strong
  3. Daily Market Timing remains weak
  4. Suggested market posture for the first week of trading in 2018 & stocks to watch

1) Stock market outlook for 2018

Stock Market 2018The economy is growing faster than a year ago.  S&P earnings are continuing to grow and grow faster than a year ago.

However…

Interest rates are on the increase.  We have a new tax plan that still isn’t well understood.  The percentage of bullish advisors is 64.10% which is almost at an all-time high.  The media keeps shouting “bear market ahead”!

With an exceptional year like 2017 behind us, it’s hard to expect that 2018 will be better.

I make a habit of never making predictions.  No one really knows what will happen in the future.  And with investing anything can happen.

So I will continue to measure the supply and demand for stocks just like always with the market timing indicator which has never let me down.

Here is what the market timing indicator is showing now…

2) Weekly Market Timing indicator remains strong

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Profitable Investing & Market Timing Update for 12/22/2017

Topics included in this week’s Profitable Investing & Market Timing Review

  1. President Trump tax-plan get’s final approval
  2. S&P 500 Earnings continue to increase
  3. Weekly Market Timing indicator remains strong
  4. Daily Market Timing indicator weakens – another buying opportunity?
  5. Market posture for the short week of trading before 2018

1) Trump Tax Plan

President Trump finally got the tax plan approved.  Now I guess we have to figure out what’s in it?

Last minute negotiations and trades to buy politicians votes ensured the approval of the first tax & revenue update in 30 years!

I’m still not sure if my tax bill will increase or decrease.  I guess I’ll find out – but not for sure until April of 2019?

As usual in the stock market it was buy on the rumor of the tax bill passing and sell on the news.  Maybe that was due also to being close to the end of the year.  But early week trading was bullish.

Late in the week trading tapered off with some price decreases.  Probably due to tax bill news, a long weekend (markets are closed on Monday), and proximity to 2018.

So the big question is what is the stock market going to do in 2018.  Honestly no-one really knows – but there is no shortage of people willing to make a prediction.

However, the profitable investing & market timing strategy will help keep us on the profitable investing side of the market no matter what happens.

2) S&P 500 Earnings continue to increase

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Profitable Investing & Market Timing Weekly Update for 12/15/2017

Stock Market Timing Week in Review

Interest Rates Increase

The last Federal Reserve meeting of the year was a major news story of the week.

rising-interest-rates

Along with new projections of economic growth, the updated Fed funds target rate is now between 1.25% and 1.50%.

As interest rates are still historically low, the Fed announced more rate increases next year.

The Fed noted solid employment gains and rising economic activity would allow interest rates to rise back to “normal” levels.

Typically what happens at some point in the economic cycle is that interest rates increase sharply to slow the economy down.  The Fed usually uses the inflation rate to determine the speed of the economy.

At the present time the inflation rate is hovering around 2% and has been stable to slightly decreasing for the last 6 months.

So it appears that the timing of the Fed’s typical ratcheting up interest rates sharply is still in the distant future.

So let’s take a look at the…

Weekly Market Timing

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Profitable Investing & Market Timing Weekly Update for 12/9/2017

Stock Market Timing Week in Review

Watch accompanying market timing video.

Good news this week on the tax update, a technology rebound of sorts, and an excellent jobs report on Friday helped traders go home happy on Friday.

We still have the government shutdown to contend with.  Congress managed to arrange an interim spending bill that avoided the shutdown this past week.  However, they still need to agree on a broader budget arrangement by the end of the year.

The stock market demand/supply balance still shows decreasing demand which keeps a muted tone on the market timing update this week.

Stock Market & Sector Strength Summary - Profitable Investing

Stock Market & Sector Strength Summary – Profitable Investing

Although demand for stocks has fallen off, prices have managed to stay near highs – at least for the leading sectors, Financial, Consumer Staples & Discretionary, and Industrials.

 

 

Stock Market Timing

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Profitable Investing Stock Market Weekly Update for 12/1/2017

Stock Market Overview

Signs of investor concern started showing in stock market trading this week.

The Dow Industrial average jumped by approximately 700 points or almost 3% this week.

Profitable Investing VTI

Profitable Investing VTI

As the Dow accomplished its levitating act the NASDAQ did its version of a swan-dive from the 15 meter board by shedding about 41 points or about 0.60%.

This type of stock market divergence typically is not a good sign.

Investor action is largely driven by the perceived effect of President Trump’s tax plan.

Actually passing the tax plan is completely separate issue!

Throw into the mix the possibility of a government shutdown in early December and you have a great recipe for nervousness.

However, the ongoing economic and company earnings news remains positive.

But that Shooting Star and Hanging Man candlestick shown in the broad stock market image should not be ignored!

Judging from the Market and Sector Strength table this might be a good time to Continue reading