A bull case for 3500 in S&P plus weekly review

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Not bad for 74 days, eh?

the source for this article is delta market investment newsletter Screen Shot 2019-04-13 at 11.10.57 AM

Delta continue : “For the market to return to its previous high, it will advance about 1.7% from current levels.  This is hardly a compelling upside story.  Is there a case to be made for the S&P 500 index to run materially higher than 2,940 in the next year?  The bullish price action of the stock market year-to-date suggests there is upside to consensus earnings and growth estimates.

One simple, time-tested rule of investing is the Rule of 20.  The Rule of 20 says the S&P 500 Price/Earnings (P/E) multiple equals 20 minus inflation.  The Federal Reserve currently measures inflation at 1.4%.  20 less 1.4 equals 18.6.  If we apply the 18.6 P/E multiple derived from the Rule of 20 to the consensus S&P 500 2020 earnings forecast of $187.42, we arrive at a price target of roughly 3,500 on the S&P 500 about one year from now.  That is 21% upside from current levels.”

IBD says this : “Leadership in the stock market is still centered on software, electronics, computer and chip sectors. They are showing no signs of weakness.”

Fidelity Weekly Ending Friday April 12th 2019barchart weekly Ending Friday April 12th

even for this week, except for health care and energy sector, all other sectors ended the week at the top of the trading range

Happy trading !

 

Bears just can’t catch a break.

IBD says this “For the seventh day in the past eight sessions, the Nasdaq and S&P 500 closed near session highs Monday. Bears just can’t catch a break.”

It continues “The Nasdaq composite rose 0.2% after wiping away an early loss of 0.6%. The composite has been rising smartly since it made a six-month high on April 1. At that time, the index put away the latest of several hiccups in which indexes have sold-off sharply, only to get back on their feet quickly.”

just a word of caution – The century figures! NASDAQ is at 8000 level, and S&P is at 2900 level.

But having said that – nothing beats this

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Else where in India – the Nifty 50 which is akin to NASDAQ-100 hit all time high

from Deccan chronicle : Foreign portfolio investors (FPIs) pumped in Rs 33,980 crore in March—the largest monthly inflow in the market’s history. And in the first five trading sessions of April, they have pumped in Rs 8,634 crore more into the markets. Indian stock market is at all time high.

1 year ago in April 2018 EUR USD was 1.2280 , Now it is at 1.1267 a drop of 1000 PIPs or 10, 000 dollars!

It has nicely bonded back and made a 10 day high yesterday. But it is in a fantastic down trend. Shorting opportunity.

What a stock market rally so far? Weekly review for week of April 1st – April 5th 2019

How do you know that the stock market is doing well so far?

Let’s look at the general market picture below

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we see the advanced decline line nicely surpassing the previous all times highs in the last one week!

what would some other sign be?

In the worst week for the top performing industry group (Software Group), it lost less than 1 % !!

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what about sectors, How did they do ?

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there has been nothing down – no sector was in the negative last 1 month and last 3 months !!

I am long on NQ and TQQQ

Have a wonderful weekend !!

 

the strongest group in the current rally

Since December 26th 2018 the boom in Software sector has been fantastic. The software sector and industry groups have been fantastic so far.

Let’s look at the following chart.

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So till wednesday it grew around 32 % !

they have been sell offs on March 4th and March 22nd and then yesterday April 4th 2019. But yesterday’s sell off was different.

On March 4th and 22nd there was market wide sell off. But yesterday there was just unloading of the top performing software stocks by Institutions for other pastures.!

lets look at 3 months performance of the sectors

Screen Shot 2019-04-05 at 1.16.03 PM

Information technology sector – went up 28.3% in three months – the next nearest one Industrials was about 6 % points below it. The sector went down by 0.44 %. an insignificant amount.

look at yesterday’s performance of Industry groups within Information technology Sector

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So all is well so far when it comes to non Computer sector/Software sector

Happy trading

i am still long on TQQQ and NQM19

 

what a bang to start the 2nd Quarter in the market!

Screen Shot 2019-04-02 at 12.31.11 PMScreen Shot 2019-04-02 at 12.33.33 PM

IBD 50 index  is an index of 50 top performing growth stocks in the world with high spectacular momentum and top line (top 1%) of fundamentals.

As the market is picking up steam growth stocks lead it – and IBD 50 Index has been picking up. it just cleared its 200 days SMA and has been going up steadily last 3 days.

One positive yesterday is the OBV for TQQQ

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Look at the chart below

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the OBV is approaching very close to the the march 2019 high – and this is just 1st day of trading for 2nd quarter of 2019 !

I am long on NQ and TQQQ!

happy trading !

happy traveling also !

 

Weekly review of the stock market, for the week ending Friday, March 29th 2019

wow travelers and traders, wow. what a 1st calendar year quarter it has been!

Major stock indexes closed out the first quarter with good gains Friday, capping a strong quarter that saw the Nasdaq composite rise 16.5%. The S&P rose 13.1% in the first quarter, its best quarterly performance since the third quarter of 2009. (source : IBD)

IBD says this “While the market remains under pressure and investors must remain cautious, the market showed some improvement the past few days. Indexes closed near the week’s highs, and some buying is reappearing.”

That is a good sign!

Back in October 9th 2018 NASDAQ closed at 7738. The next day, 10/10/2018, which was a Wednesday, the floor fell of and NASDAQ dropped 316 points and then it fell 1550 points till December 24th 2018 !

last friday the market closed at 7730. So we are right there. Now at this current time about 2 am EST, the futures are up 76 points or little more than 1 %. It appears we are going to start off the week with a bang!

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last week from the above table industrials, materials and Consumer discretionary have taken a lead. which is good because the participation is very broad in this market rally!

Look at the table below for 3 months sectors performance

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everything except financials are closing at the top in the first quarter of 2019!

the information technology sector is on the tear. IBD’s enterprise software group rallied 31% in Q1, easily outperforming the major stock indexes

iShares Expanded Tech-Software Sector ETF (IGV)n grew by 30 %. TQQQ triple NASDAQ-100 grew by 72%.

I’m planning on getting back into the market on the first day of trading this week.