Market Update: We Are Still In A Bull Market
The major indices are flirting with important support and the S&P 500 broke below its 200 DMA line on Monday. The Dow & Nasdaq closed above their respective 200 DMA lines. Yesterday’s damage caused the major indices to experience their worst start to the second quarter since the Great Depression! The crazy part is all this is happening while we are still in a bull market! What do you think the next bear market will look like??? Right now, defense is king as the bulls FIGHT to defend important support. If support is broken then odds favor we head toward bear market territory which will be a decline of +20% or more from a recent high. Right now, Feb’s low is the next important level to watch for the S&P 500 and the 200 DMA line for the Dow and The Nasdaq. After that, look out for Feb’s low for the Dow and Naz. Now is the time for the bulls to show up and defend support. I wouldn’t be surprised to see the market tease a little to the downside (shake out the weak hands), then reverse higher as we enter earnings season. If the market reverses and closes higher this week, that would be a very bullish sign. Conversely, if we don’t rally, look out below. Keep in mind, the next big catalyst is earnings season, which, as always, will be full of big gaps up and down. It’s never a dull moment on Wall Street. For now, defense is king.
FLS Portfolio:
The service sold CAT yesterday for a nice +33.21% gain. CAT was bought in June and sold in April, not a bad run, especially in this tape. Thankfully, we have held off and not added new risk recently and that has saved us a lot of mental capital (not having to get stopped out left and right). Eventually a clean trend will emerge and our patience will be rewarded. The good news is our protective stops are in and, as always, we will let the market guide us. In the interim we will let others have fun with this tape. Here is a snapshot of the FLS portfolio as of Monday’s close:
Positions:
A. The service owns:
ADBE +91.09%, ISRG +27.15%,
RMD +23.29%, MELI +26.46%
B. The service will exit:
ADBE @ 201.56, ISRG @ 379.77,
RMD @ 93.52, MELI @ 319.77
Working Orders:
There are no new working orders today
