Market Update: Pullback Begins
Look at the chart on page 4 of the weekend report. The Dow is 2,000 points above its 50 DMA line. That tells you everything you need to know about this pullback.
Looks like it was a very good move not to buy over the past few weeks as the market was extremely extended. Our patience is being rewarded. This week, the market is finally deciding to pullback after a VERY STRONG month. As of Friday’s close, the S&P 500 soared nearly 8% in January and the Nasdaq Composite vaulted nearly 9%! Historically, a 10% gain for the entire year was considered healthy so the fact that the market is starting to pullback now after such a STRONG advance (in a few weeks) is perfectly normal and healthy. The key now is to analyze the health of the pullback to see if it is another healthy pullback or if it turns into something more severe. So far, it appears to be a normal and healthy pullback. I welcome this pullback with open arms and look forward to buying the bounce after this dip runs its course.
The New World: 200-300 Point Swings In The Dow
It is important to note that on any given day the major indices can easily move 1%. Now, that the Dow is trading above 26k, a 1% move equals ~260 points. Furthermore, a “big” up or down day we could easily see the market 2% which would equal ~500 points. So, please look at the % change when the market moves, and don’t be scared or mislead by big headlines that say the Dow is up/down 100 or 200 points. That should be expected as we move forward. Finally, it is the end of the month and the market likes to rally into month end. Not always, but more often then not. Key areas of support to watch are the 10, 21, and 50 DMA lines for the major averages and leading stocks. Until the 50 DMA breaks, the bulls remain in control.
FLS Portfolio:
The FLS portfolio is off to a GREAT start to 2018 and once again outperforming the major indices. Here is a snapshot of the portfolio as of this writing (9:42am EST):
Positions:
The service owns:
ADBE +77.45%,
CAT +49.93%, ISRG +35.57%, RMD +28.69%,
MNST +22.20%, MELI +38.70%, BABA +11.75%, FB +1.64%, NVDA +17.82%
The service will exit:
ADBE @ 165.47, CAT @ 133.71, ISRG @ 359.64,
RMD @ 87.07, MNST @ 62.14,
MELI @ 310.94, BABA @164.15, FB @168.97, NVDA @ 204.91
Working Orders:
There are no new working orders today.
Disclaimer:
This analysis contains information from resources believed to be reliable but are not guaranteed as to accuracy or wholeness as of the date of this publication. Past performance is not necessarily indicative of future results. There is always a risk of loss in trading and investing. Opinions articulated are subject to change without notice. This analysis and any opinions expressed are intended for educational purposes only and should NOT BE interpreted as a call for engagement in any transaction involving the purchase or sale of any security or investment product or service. The risk of loss in investing and or trading can be substantial, and traders/investors should carefully consider the inherent risks of such an investment in light of their financial condition. The author, firm, associates, or the firm’s clients may have a position in any of the investments mentioned and their positions are subject to change without notice. Any reproduction or retransmission of any portion of this report without the express written consent of 50 Park Investments is strictly prohibited.
