Special Bulletin: June 23, 2021

“If the Market Doesn’t Do What It is ‘Supposed’ to Do, It Ain’t Gonna”

As a result of new price highs on the Nasdaq and S&P500 indexes and a reduction in the Distribution Day count due to time, our Current Market Outlook has been upgraded to “Market in an Uptrend” with a green light at Wednesday’s close. Our “Core Four” stands with 3 green and 1 yellow light now (see above).

Many years ago, a close colleague of mine and I coined that expression (see title) and used it regularly to help temper our expectations for the general market indexes and individual stocks. We found that people’s opinions – the collective wisdom – was always trumped by actual market action.

That fact remains true today. 

In this business, it pays to be flexible and remain open-minded to new information that can/will alter an outlook.

Demand for equities continues to be stronger than the desire to sell equities… at least for now.

Continuing as a positive market tell, the CBOE Volatility Index (VIX) remains under its all-important 50-day moving average (mav). Watch to see if that index moves violently higher in the next few days. If it does, be very careful.

What should investors do now? Beware of an up-opening that leads to a big negative reversal close in the main indexes. Continue to freshen up your watch list and commit new capital only to your best ideas that are confirmed with a significant volume increase on price breakouts. Keep monitoring the US 10-year note rate as an immediate inflation gauge. Be on guard for a vertical violation. Will the financials participate? If so, that would be a positive “tell.”

Have a Triumphant day! ® 

Ps. We have closed our Twitter and Facebook accounts. Read about our decision here and here.