An unexpected (and unexpectedly strong) rally into year
end? I believe we'll see one. I'll lay out the bull case.
(a) The global economy continues to grow.
Following one of the worst declines in global markets in 2008-9 + another
brutal decline in emerging markets in 2014-16, growth has returned in a big
way. How do we know? Global companies have been reporting strong
earnings!
(b) Maximum frustration-> My sense is that
most investors are under-invested and/or waiting for a pullback, and thus a
melt-up will result in more pain than a sharp decline.
(c) CAPE reversal. The widely-cited
Shiller CAPE (cyclically-adjusted PE ratio) is based on a ten-year average of
earnings, and will begin to look far more attractive as 2007-09 earnings begin to
fall off the radar. This will provide room for stock prices to climb
without having to listen to media noise re an excessively high CAPE
ratio. I prefer listening to media noise re Cape Canaveral for the global
stock market!
(d) (Speaking of earnings)- Earnings season begins
in earnest later this week! I expect a continuation of strong earnings
reports, strong enough to fuel a substantial rally.
(e) It's that time of year! October is the
month to buy. Technically, the time to buy (for those who sell in May)
has traditionally been the end of October. But 2017 has been anything but
conventional.
SPEAR dropped below my mental stop at $7, and so I just sold at $6.96 the trading position I opened at $7.20. No luck with this stock... But at least I am getting a good practice at stopping myself out at a small loss. :)
ReplyDelete(a) I opened a position in FXI (China 'A' Shares) premarket @ 45.50 (about a -1% decline from Tuesday's close). Now trading around 45.85.
ReplyDelete(b) I reopened a position in ASHR (China 'A' Shares) @ 30.10 (a 52-wk high). Not exactly sure why I'm bullish on China, but I sense a breakout in the Shanghai Composite. Currently ~ unchanged @ 30.14.
(c) VT (total world market) +0.27% to a new 52-wk high.
(d) EEM (emerging markets) keeps barreling head, up an additional +0.4% today to a new 52-wk high @ 46.24.
In case anyone's wondering:
Delete(a) I closed ASHR @ 30.02 earlier in the week. Reopened today.
(b) I reopened HIMX (too early) @ 10. Now 9.42. I"m not worried about this company.
(c) I reopened INTC (also too early) @ 39.5x.
(d) I closed VTWSX on Monday, only to reopen yesterday. A brilliant move that cost me -0.48% in gains.
Mark- How are you and your family holding up? My brother has two properties in Healdsburg, and he's a little worried.
ReplyDeleteFinally got stopped out of EMES today at $7.95 for the shares purchased at $8.20. Could have made a small profit on this entry many times over the past two weeks, but waited for it to rise to new highs, and here is the result...
ReplyDeleteInstead of losing money on crappy energy stocks, I figured I'd rather make money on biotech. :) So I have just reloaded at $7.82 the CBMX shares I recently sold at $8.
ReplyDeletePlaced a sell limit for these shares at $8.20
DeleteNo end in sight.
ReplyDeleteIf (as I believe) we're still in the early innings of the current bull, last week's consolidation sets the stage for the next leg up. Lending support to that view:
(a) Japan's Nikkei surpassed 21,000 for the first time since 1996.
(b) Both the Shanghai Composite and the Shenzhen Composite closed >1% higher on Friday. Shanghai appears ready to retest levels least seen in December of 2015 (just prior to the crash in emerging markets indexes in January 2016).
(c) Volatility has declined to historically low levels. There are many traders positioned for a reversion to the mean (probably a good bet, but timing is everything). My opinion is that Bears will be surprised to find that an increase in volatility will be paired with a rise in global markets->with a parabolic rise surprising most investors.
Hi All- Obviously are very difficult time here. My family is fine here in Petaluma, but many friends, co workers and clients have lost homes. So far, 5 homes I've built are lost. I might have lost 3 more, but can't get into that area still. Honestly, I have absolutely no idea how all of these homes will be replaced.
ReplyDeleteJust for bookkeeping, I sold 2/3'rds of my remaining SEDG in 2 tax free acct's. 30 was always kinda my target. I'll hold the other 1/3 into next year at least.
I'll try to chimne in more often.
Hey Guys- Sold all QQQ and AAPL.
ReplyDeleteBefore reading Mark's trade posted above, I have also decided to sell my ORCL trading position at $49.63 that I opened at $48.03.
ReplyDeleteAlso, AKS hit my sell limit at $5.9 for the shares I reloaded at $5.50, after selling them at $5.9, after reloading them... :)
ReplyDeleteXES has pulled back noticeably, while USO has not pulled back all that much. At the same time, the 1-year chart suggests that XES might be bottoming out. So I just sold some Dec $15 puts on XES at $0.70, so as to either buy it at $14.30 (which is a GOOD value, IMO) or make 30% annualized on the cash I set aside to guarantee these puts if they expire...
ReplyDeleteBTE made a higher low and a higher high since its June low. Placed a buy limit order for it at $2.5, which will be close enough to its previous late-August low at $2.35 so as to place a stop at $2.35 and have only a small possible loss (and a large possible gain)
ReplyDeleteDecided that the current price of BTE is good enough and bought the shares I wanted at $2.54. Placed a sell stop at $2.30.
DeleteHi Guys. Thought I would check in to see if you folks are all right what with the fire disaster. Glad to hear Mark is ok. Here in Illinois we don't have much to worry about weather-wise. I still do not trade anymore and have just abut sold all my stocks.
ReplyDeleteHey illini-
ReplyDeleteHope all is well with you!
Healdsburg escaped unscathed, and my brother is relieved. I'm confident the North Bay will rebuild and prosper the same way residents of the Oakland Hills did following the 1991 firestorm.
New post.