The “Big V is for Victory” stock market tour has continued almost unabated. Since our last post, the S&P500 has soared in the face of Covid and social unrest, and scored its best 50 day period gain ever! Thank you Mr. President, Chairman Powell, Secretary of the Treasury Mnuchin, and Congress.
You may be asking yourself, “victory over what?” We’d like to suggest that the stock market is saying that a return to “normal” is already underway, and that the economy will have victory over the avalanche of unemployment claims, the fear of Covid, the unprecedented (and largely unnecessary) lock-down steps taken to arrest the virus, and even tragic riots.
Our Current Market Outlook remains “Market in an Uptrend” with a “green” light. Three of our Core Four indicators are green, while 1 has turned RED (see Core Four above), barely leaving a net green condition. (A green and a red offset each other and make 2 yellows to go along with the remaining 2 greens)
The market is getting overheated (sentiment) and extended (price) and a few internals are beginning to flash early yellow & red warning signs. A pullback to the rapidly rising 21 day moving average by the main indexes is a strong possibility by early summer.
We have heard many times recently that “science is the answer” or that “science is how we get back to normal.” We respectfully disagree. After all, wasn’t it “science” (a lab in Wuhan) that created this pandemic problem in the first place?
While we understand the need for a vaccine, and for testing and other scientific measures, science is not the only answer. Nor is it the best answer, in our opinion, for returning to normal. God is.
The Creator of Heaven and earth, the Lord God Almighty has been our nations best answer for hundreds of years and through many far worse threats than what we are currently facing. There is power in prayer. A life, a community, a nation surrendered to Him can and has accomplished much. God is our only answer and when He decides it is time He will grant a discovery, a breakthrough in science, and channel it through mere mortals. Turn to Him, trust Him.
One final market comment. While almost nobody saw the markets torrid and amazing rebound coming, we are delighted with how our Core Four and our Current Market Outlook caught the recovery early by following the footprints of money and studying the math of the market. (See our April posts) We also acknowledge Fundstrat Global Advisors Managing Partner & Head of Research Tom Lee. His comments early on were very insightful. Additionally, we recognize the excellent work of the team at Investors Business Daily, who through the use of William O’Neil’s disciplined market timing approach, nailed the “follow-through” days in April and helped investors stay optimistic through this historic period.
What to do now? Nothing goes straight up. Be aware of the Core Four subtle change. Stay focused. Tighten stops and take profits in extended positions. Hold off on new buys. Pray & enjoy life.
Have a Triumphant day! ® Ps. Happy 3rd birthday Henry!! 🙂
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.
©2020 Triumphant Portfolio Management, LLC.