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Jesse Livermore once said don’t become bearish or bullish on the whole market because one stock or sector has reversed its course from the general trend. The reason I bring this up is because I was reminded of a valuable lesson this weekend.
For the past year, I’ve been greatly focused on the Semiconductor stocks and the Nasdaq 100 Index. Respectively, they have been the leading sector and the leading index since the Bull Market resumed in July 2016. Over the past 3-4 weeks, they have both come under a decent amount of distribution (professional selling by the big institutions). Because I’ve been so focused on these two areas, I lost track of how strong some other groups are performing. In other words, the vicious sector rotation has taken money out of these areas and moved it into other sectors such as Financials, Transports and Healthcare.
Every weekend, I perform a thorough screen of the entire market and look at close to 1,000 stocks. While going over my screens this weekend, not only did I notice the strength in many other sectors, I also realized how the major indexes pulled back on light volume last week. The Russell 2000 in particular looks very strong; showing me there’s still risk appetite from the large institutions.
I still think it’s worth being a little cautious right now, but I was reminded this weekend not to get too bearish because one sector is consolidating or correcting. I discuss this in more detail in my Second Half Outlook which will be ready later this week. If you would like to receive it, sign up for my FREE mailing list below. Thank you!
I can be reached at: [email protected]
Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.
I’m taking a break this summer from my stock market videos. I hope to be back in the fall but I need to focus on other things right now. I sincerely appreciate all the kind comments, emails and tweets about the videos. It’s always a great feeling to know you are helping others, especially the younger traders who are eager to learn.
As I’ve mentioned several times on this blog, I feel the market is presenting some generational opportunities. The explosive Bull Market from 1995-2000 helped so many investors multiply their accounts many times over and we could be heading into a similar period now. I’m very pleased with my strong start to the year and might consider taking on new clients for the fall. If you have any interest in my Managed Accounts product, please email me to set up a call: [email protected]
Thank you again and see everyone later this year!