Travel Update:
This will be the only intra- week update this week because I am in Greensville, SC all week attending an annual BMW event. The facility is impressive and I’d like to thank everyone here for their wonderful hospitality.
Market Update:
The major indices continue to test the 50 DMA line which is nothing more than a psychologically important area of support that many people watch. The reason why it is important is because so many people watch that level. That, in and of itself, causes a big shift in psychology and, in turn, a shift in buying/selling. In physics, the term observer effect refers to changes that the act of observation will make on a phenomenon being observed. That is partially true with the 50 DMA line. If you back-test the 50 DMA line (just a simple strategy whereby you go long when the underlying asset closes above it and short when it closes below it), the results are poor. But the fact that so many people watch/talk about the 50 DMA line and use it as an objective reference point – has made it an important area of support to watch.
Busy Week:
The two big headlines that investors are watching this week are: Trump & Xi and Friday’s jobs report. Many people are “worried” that the Trump/Xi meeting will not go well. What if it does? Remember, the consensus is usually wrong and China and America both need each other to thrive. So there is a very high likelihood that it goes well and the market rallies. After this week, investors will be focusing on earnings.
Key Levels To Watch:
Once again, the major indices are testing the 50 DMA line. If that level breaks, in the short term that would not be healthy for the bulls. The market is getting a little top heavy here as it pauses to consolidate a very strong post election rally. Last week, we mentioned that other macro markets have already given back their post election rallies which means stocks could be next. Additionally, watch the Russell 2000 as it continues to under-perform in the near term and tends to lead its peers. A little defense is warranted until the Russell gets back above its 50 DMA line.
FLS Portfolio:
Thankfully, the FLS portfolio continues acting well. The service raised its stops again last weekend as the major indices remain somewhat choppy. Here is a snap shot of the portfolio as of Monday’s close:The service owns:
The service owns: ICE +3.06%, ADBE +16.65%, BABA +10.41%, HAS +0.25%, NVDA -1.45%
The service will exit: ICE @58.75, ADBE @ 119.57, BABA @ 103.36, HAS @ 97.17, NVDA @ 106.36
Working Orders:
| Status | Order | Ticker | Buy Stop | Protective Sell Stop | Risk From Entry |
| Open | Buy | GDXJ | 38.58 | 37.71 | -2.26% |
| Open | Buy | DPZ | 187.38 | 178.39 | -4.80% |
| Open | Buy | SPY | 236.62 | 231.47 | -2.18% |
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.
