Market Update: Bifurcated Market Continues
All you have to do to “see” the split tape is to look at the Dow, S&P 500 (laggards) and the Nasdaq/Nasdaq 100/Russell 2000 (leaders) over the past few weeks. Everyone is concerned about the possibility of a global “trade war” but so far it is much ado about nothing. Just a lot of talk, not a lot of action. The S&P 500 and Dow are more sensitive to global trade, hence their under-performance of late. I’m encouraged because the action in leading stocks (where I focus most of my attention) is strong. Additionally, I’m noticing some beaten down areas come back to life over the last few months which is an encouraging sign. Retail stocks have been in favor recently as they were beaten down and left for dead over the past few years. Now, I’m seeing some healthy action brewing in the biotech and health care stocks -which is very encouraging. As always, I want to see where the market closes tomorrow and will have a full report for you this weekend.
(In case you missed this section in Tuesday’s Pre-Market Update)
A Closer Look At Trade:
Earlier this week, President Trump said he’s ready to announce tariffs on $200B worth of Chinese goods. It is not that big of a deal for the US economy. The US economy is roughly $19T and currently, China only imports $130B of goods from the US so its response clearly will be somewhat limited from a tariff standpoint. Separately, the US imports 505B from China. Could they do other things to retaliate? Sure. But even if they stop trade altogether (which will not happen) $130B barely moves the needle for the US economy. So China clearly has more to lose than the US. Now, the ball is in China’s court. That’s why Asian markets are down so much more than the US right now.
FLS Portfolio:
The FLS portfolio continues acting very well. To protect our positions, all stops are/have been moved up to at least breakeven. ANET and EL stops are moved up to breakeven before Tuesday’s open. Here is a snapshot as of Wednesday’s close:
Positions:
The service owns:
ADBE +126.16%, ISRG +54.61%, SFLY +4.92%,
QQQ +7.61%, NFLX +29.80%, SQ +34.91%, ANET +7.85%, EL +0.83%
The service will exit:
ADBE @ 201.56, ISRG @ 379.77, SFLY @ 90.87,
QQQ @164.71, NFLX @ 321.09, SQ @ 50.10, ANET @ 263.09,
EL @151.81
Working Order
There are no new working orders
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.
