Day 6 (10:30 AM Update) Day 6 of a potential new rally attempt is all the market has so far for the bulls. The market continues in a correction that has now been exacerbated by the admission of a revenue shortfall from Apple yesterday after the close. This revelation has caused reverberations across the technology sector. Currently the Nasdaq is off almost 200 pts or nearly 3% and the Dow is down over 600 points.
Prudent investors are still waiting for a “follow-through day” before beginning to recommit significant amounts of capital back into stocks. According to the excellent work of Investors Business Daily, the best follow-through days typically happen between days 4 to 7 of a new rally attempt. They can come later too. This current rally attempt, which began on December 26th, is technically still in process and will be as long as the indexes do not undercut the price lows of that first day. So, day 6 and hope of a nearing follow-through day is all the bulls have so far. Cash is still king and our light is still “red”. Our current cash and/or cash-fixed income allocations in our strategies are 60, 70, 76, 77, 80, & 100%.
While this market is still “technically” sick and the chances of a recession are rising, market bottoms usually come when investors least expect them. Keep an open mind for positive catalysts. A few various internal indicators are beginning to hint at an oversold condition. Watch for a “retest” with a higher low in the key indexes. Also keep building a watch list of sectors (and the leading stocks within them) that are holding up well and displaying excellent relative strength, since history shows many of those companies become market leaders in the next uptrend. Wise investors allow the “math of the market” to dictate their decisions, not emotions, and respond positively to when a signal of renewed institutional demand emerges. It will take time for the market to repair its damage, so be patient and stay engaged.
Happy New Year and… Have a Triumphant day! ®
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. ©2019 Triumphant Portfolio Management, LLC.