Stories of soaring prices and all-time highs keep filling the airwaves and chatrooms. Tales of epic short squeezes and SPAC moonshots entice Robinhood and its little Johns to abandon all caution (and their day jobs!) and take on the big boys. It must be a wonderful time to get into the market!
This type of rampant speculation never ends well and is actually an indictment of the sin of greed that lies deep in the human soul.
Additionally, bullish investor sentiment remains high making the market vulnerable to unexpected bad news (economic or geopolitical) which could induce massive smart money selling at any moment.
Having said that, the major stock indexes did pass a critical test last week by successfully holding price support at the 21 day (Nasdaq) and 50 day (SP500) moving averages. A breathtaking 6-day charge to new highs followed the test and eased many minds of pending doom but has reignited a thirst for equities at any price.
Our Current Market Outlook is still “Uptrend Under Pressure” with a yellow light. While this yellow condition has persisted longer than expected, the pullback/pause of two weeks ago served as a mini refresh and has extended the cautionary condition. The TPM “Core Four” internal indicators have moved back to 2 green, 1 yellow, and 1 red. This reflects a slight improvement in the “math of the market.” We remain defensively positioned in our strategies but have allocated a portion of the cash position into a few new ideas.
While new highs and growing account values are certainly something to make investors feel happy, a deeper look at some of the areas that have been attracting huge levels of buying should make a socially conscience investor (not to mention a biblically responsible one) concerned for their community and our national culture and feel very sad.
What is sad is that “pot” – efforts to legalize marijuana- and “online gambling” – DraftKings and the like- are hot growth areas right now. Heaven help us please! What have we stooped to?!?! This is “what sad is.” We are allowing/encouraging/teaching people of all ages (males for the most part) that it is A.O.K. to stay home and play video games, and gamble their money away betting on sports. And then after their team loses, and they lose their money, that it is A.O.K. to go out and get high on dope to cope with the loss of their money (and eventually their jobs and families, if left unchecked). WHAT HAS HAPPENED TO COMMON SENSE AND MORALITY?
These are not new investment frontiers that will improve society and free us from the difficulties of life. These are traps set by parasites that prey mostly on the young, the uniformed and naïve fellow citizens of our great land. We are called to be our brothers and sisters keepers and to rescue those who are perishing! Proverbs 24:11* says, “Deliver those who are being taken away to death, and those who are staggering to slaughter, oh hold them back.” And in James 2:8* we read, “If, however, you are fulfilling the royal law according to the Scripture, ‘You shall love your neighbor as yourself,’ you are doing well.” Loving your neighbor as yourself can mean warning them about addictions and voting “NO” to legalizing destructive drugs in your state! (By the way, pot is also smoke that is still bad for human lungs, not to mention the other serious physical and mental damage linked to its usage).
Shouldn’t we be giving these valuable souls something more meaningful to strive for? 1 Timothy 6:18-19*, “Instruct them to do good, to be rich in good works, to be generous and ready to share, storing up for themselves the treasure of a good foundation for the future, so that they may take hold of that which is life indeed.” Jesus says, “The thief comes only to steal and kill and destroy; I came that they may have life, and have it abundantly.” John 10:10*
That is “what joy is.”
What can an investor do now? Stay vigilant and rested. Do not become complacent; the market is a lot smarter and faster than most investors are. Keep monitoring the major indexes moving averages and stay alert for future price violations.
Have a Triumphant day! ®
New American Standard Bible 1995 (NASB1995) *
New American Standard Bible®, Copyright © 1960, 1971, 1977, 1995 by The Lockman Foundation. All rights reserved.
The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice.
©2021 Triumphant Portfolio Management, LLC.