Friday we had a clear break of the neckline, I would expect prices to move lower next, how low, only the market gods know that
My weekly market review video
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Market review video for week ending May 20th
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S&P broke itâs 3 week loosing streak but is still trading below itâs 50 dma. We saw buying come into Biotech and Semiconductors, that is a good sign. weakness in interest sensitive areas like utilities and reits, The play remains in the oil sector as XOP and XLE lead my ETF rankings
It is now looking like the market was just teasing us with this Head and shoulder break, Last Thursdayâs failed breakout then reversal giving us a pin bar ( hammer) looks to be the low for this swing, now we need to see price get above the last swing high form 2 weeks ago @ 2084.87 , if we do, we end this pattern of lower highs. Still I do not see any long term bull run coming out of this and will be using this rally to reduce my exposure to stocks for the summer months
Well that did not take long, price has cleared 2084.87 if it holds above this level we will have a higher high and should have ended this month long pullback
Semiconductors put in a another new YTD high, also at YTD highs is the Financials ( XLF) and Materials (XLB) hit a new high but then pulled back
Market is looking a lot stronger than a week ago, We just might make a run at some new all time highs before the Summer selloff
My ETF rankings for week ending 5/27, New YTD highs in SMH, XLF, MDY, Market may have a week or two of strong gains left in it before summer
Here is my month end YTD rankings for my 22 ETFâs, I included Aprilâs list for comparison
Cup w/handle breakout in Health Care, very bullish looking chart from a sector that lead the markets to one of their worse Januaryâs on record. This would had been tough to hang on too, but for those who did they are being rewarded
Another good week for stocks, now only two sectors trading below their 50 day average. Big miss in NFP numbers means talk of interest rate hikes may be off the table again. This was welcome news to XME and XLU as they lead the markets higher.
Here is a YTD listing of Global ETFâs I follow, Brazil leads, clearly this is because of the Olympics
YTD Global EFTâs
Our Metals&Mining ETF is tracing out a beautiful cup w/handle, breakout point is 25.50, we are still a dollar below that so I will be closely watching this one. XME is my top ETF this year, up 63%, with the all time high at 96.00 set back in 2008 , this has a whole lot of upside potential. Plus this is a fund that can keep going up when major indexes decline
look at the volume, that is not uncle Joe and Ante Betty buying
When it comes to trends there has not been a better one over the last 7 years then Consumer Staples, normally a boring sector where fund managers will park money during economic down turns. Buying on pullbacks to the 40 week moving average has been the play. Compared to other EFTâs this one is more Bear resistant than most
What if you had bought the S&P500 on the first trading day of each year going back to year 2000, accumulating shares and never selling. Well I back tested this and came up with some very nice results, in my back test I took the opening price in each year for the SPY ( S&P500 ETF), and bought $10,000 of the ETF rounding down so not to spend more then $10K , the first purchase was for 67 shares at $148 per share, on years when the market was down like 2003 and 2009 my $10K bought 112 and 110 shares, on years when price has up like 2015 and 2016 my $10K only got me 48 and 49 shares. when I completed the back test I had made 17 purchases ( 2000- 2016) , accumulated 1300 shares, total cost basis $168,586 or $129.68 per share average cost. , shares appreciation based on todayâs SPY price of $211.76 was $275,288 , giving me a profit of $106722 or about 63%. This does not include the 2% dividend which I estimate would add another $50K to the profit line. The S&P 500 has a long history of rewarding buy and hold investors and should be a part of every investors long term strategy. If you canât beat the returns of the S&P in your trading then you should not be trading,
Here is monthly chart of SPY, the 17 circles are the points that I bought for the back testing, all 17 years of purchases are in the money, that makes the record for this strategy 100% successful
This âback testâ has a self-serving bias unfortunately and isnât reliable.
- Indices (by mere design) will always have an upward sloping trend
- '03 - '08 Youâre coming out of the âdot comâ market crash + China GDP ramp up benefited American consumers
- '09 - '16 Youâre selecting trades during unprecedented market conditions (FEDs QE1, QE2, QE3 - essentially QE infinity)
Roughly 15 of the 17 years in your sample are on the heels of black-swan-type events.
Not sure where you are getting a self serving bias, the S&P and DOW 30 have historic long term up trend, here is the S&P, this chart shows had I included 1980 through 2000 the results would have far exceeded that of 2000 through 2016 . The Dow you can go all the way back to year 1900 and the Dow has always recovered from any selloff, These two indexes for the buy and hold investor will net about 5% a year over any 20 year period
We cannot get a break with this market as we selloff to end the weak, the strongest sectors YTD are holding up the best
I am dropping the ball here, these are closing numbers from last Friday
