• Market Insight

FLS Holiday Update: Bulls Gobble Up Stocks… 11/22/2016

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Housekeeping: Happy Turkey!
The market will be closed on Thursday for Thanksgiving and it will close early (1pm EST) on Friday.  Due to the shortened holiday week, this will be our only intra-week update. As always, we will have a full report for you this weekend. 
 
Market Update:
The major indices continue acting very well as the Dow jumped above 19k and the S&P 500 jumped above 2.2k, both “round numbers” and psychologically important levels to watch going forward. The small and mid caps are also acting well and continue making new highs. In the short term, the market is very extended to the upside and due to pullback. We are in a seasonally strong period for the market and clearly the bulls are in clear control right now. Just be careful chasing anything if it is extended. 
 
A Note Of Caution: A New Passive Bubble
There’s a massive shift occurring in the passive investment space. I’m seeing a ton of people leave active and move into passive investments. That’s OK for now, because we are in a bull market, but when we enter a bear market, this massive passive bubble will burst and it will get ugly – fast. I’m also noticing a little optimism/little euphoria slowly returning to the market which could set the stage for a big blow off/climax run. Not sure exactly if that happens but that’s what happened in other market tops, with the two most noteworthy examples: 1999-2000 and in the late 1920’s. The 2007 top was different because people piled into one area and that bubble popped but the euphoria from 2000 was not as strong. If the market continues to rally from here, we are more than ready to continue catching more winners. 
 

FLS Portfolio:

Thankfully, the FLS portfolio is acting well. 
Here’s a snapshot of the FLS portfolio as of Tuesday’s close,
 
A. The service owns: SMH +22.10%, MU +10.03%
B. The service will exit: SMH @ 65.96, MU @ 17.94
 
 
Working Orders:

Status Order Ticker Buy Stop Protective Sell Stop Risk From Entry
Open Buy HACK 28.23 26.97 -4.46%
Open Buy CME 117.9 113.44 -3.78%
 
 
 
 
 

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 Sarhan Capital is strictly prohibited.

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Adam Sarhan

Host Of The #SmartMoneyCircle Podcast, Founder and CEO of 50 Park Investments. Adam provides weekly market updates to ChartYourTrade.com readers. He is a FORBES Contributor and is a frequent guest on all the major financial media outlets.

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