Remain defensive but be prepared to act decisively this week and especially in the week ahead. Complete your watch list of great companies that exhibit super fundamentals with solid technical support, and plan your investment steps now during this calm before the storm of activity. Your action plan should also include defensive steps to take in the event that the news is NOT good.
While the “news” seems scary currently, in time, this situation will pass too and positive trends will ultimately re-emerge. There are three major news events coming this week that may be market moving. The three potential catalysts are: 1) Fed Chairman Powell will be speaking tomorrow in New York regarding the future direction of interest rates, 2) recent Fed minutes will be released at 2pm on Thursday, and 3) the G-20 meeting in Argentina starts on Friday where our President is expected to meet with the Chinese President to discuss trade war issues on Saturday.
For now, our Current Market Outlook remains “Uptrend Under Pressure” with a yellow light. The general stock market’s internals continue to flash signs of weakness. While the S&P500 and the Dow Jones Indust. averages barely cling to the rally attempt they started on 10/30, which was confirmed by a follow-through day on 11/07, the Nasdaq actually undercut its rally low on 11/20 and has moved back into a correction mode. (Note: The Nasdaq is officially on day 4 of a new rally attempt, which has not yet been confirmed by strong market action, eg. a follow-through day)
Other internal indicators continue to show deterioration under the markets surface and remain at elevated levels, most notably the number of stocks hitting new 52 week lows each day on the NYSE. Simply put, this market is technically still not healthy and is at an important juncture that will tip one way or the other in the very near future.
While a big rally into year-end on positive news is possible, our strategies presently remain heavily allocated in cash, short-term securities and/or utilities, along with a few select core positions. We are prepared to reinvest the capital back into the market appropriately when our signals confirm a new uptrend is underway and the market is technically healthy again. (i.e. a green light)
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.
©2018 Triumphant Portfolio Management, LLC.