why is beta not enough for the long run – 9,900 % in apple stock

i was listening to a wonderful IBD podcast. MarketSmith Senior Product Coach Scott St. Clair was candid, humorous, self-deprecating. The middle part of the talk focussed on human behaviors. (behavioral finance)

there were gems in it. One is the fidelity study.  here is the business insider article of September 2017 titled – Fidelity Investments Did A Study On Which Client Accounts Did Best And What They Found Was Hilarious

“They found that the best performing accounts were from investors who were DEAD! In second place were investors who had FORGOTTEN they had accounts at Fidelity.”

Scott says this (paraphrasing) : I had a client who died and the company policy was that i cannot touch – i cannot sell or add to his positions.

“He was stuck in all these great stocks, and he didn’t have me to get him out of them..wiggle him out because they were going up” (check the same interview of podcast at youtube here at 22:05)

thank you Scott for your honesty and humor.

Screen Shot 2019-07-06 at 10.36.37 AM

the red line is AMZN last 5 years. the blue line is TQQQ (triple NASDAQ 100), and the bottom is NASDAQ.

David Chung (@IBD_DChung)  from IBD says this says this “Judo masters begin not by learning how to throw, but how to fall. They practice this skill until it’s as natural as breathing. No matter how many times they’re flipped, they can rise to fight again.”

He goes on to say : “Highly successful stock pickers go through similar training: They must learn how to cut their losses short. This means selling a stock when it’s down 7% or 8% from your purchase price.”

 

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.

Screen Shot 2019-04-05 at 1.10.30 PM

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

Screen Shot 2019-04-05 at 2.00.38 PM

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

Screen Shot 2019-04-02 at 12.59.25 PM

Look at the chart below

Screen Shot 2019-04-02 at 1.15.15 PM

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!

Screen Shot 2019-03-30 at 8.00.22 AM

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

Screen Shot 2019-04-01 at 11.18.34 AM

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.

 

 

 

the stalling action in markets

If we look at the below chart we see the problem in the 2 and 1/2 month rally started in the first half hour on Friday March 22nd 2019., You see with

Screen Shot 2019-03-28 at 10.37.28 AM

the volume for 9:30 am half hour was about 3 times the average 50 Half hours volume.

TQQQ went down by -2.1 % compared to the previous days close !! that is – $ 1.25. i would have saved considerably money if i exited then. But alas, I did not.

Moreover look at the average trading range for 50 half hour periods. It is around 0.61. it lost double that during first half hour! Next on 3/25 Monday the volume grew even more to 5+ million and the price drop was close to 1 dollar!

Now look at the daily chart for TQQQ

Screen Shot 2019-03-28 at 10.43.01 AM

3 fantastic high volume declines in last 4 sessions!!

IBD says this “The market outlook was lowered a notch to uptrend under pressure last Friday, when the Nasdaq composite plunged 2.5% in higher volume. With the market uptrend under pressure, it’s perfectly fine to take some profits in some top performers, especially if a stock has rallied 20% or more after a breakout from a base.”

high volume selling or severe stalling is 6 on NASDAQ and 7 on S&P 500 in the last 25 sessions.

Happy waiting !!

 

 

Transition time????

Screen Shot 2019-03-21 at 10.52.43 AM

last 2 -3 days were very interesting. Yesterday S&P 500 dropped by 0.3 % but the number of S&P 500 stocks above their 50 days Simple Moving average (SMA). Last 5 trading days it dropped by around 9 points. Nothing serious but makes me cautious.

Russell 2000 closed below its 10 days SMA. It’s finding a touch resistance at 200 days SMA.

Let’s look at Heikin-Ashi chart for S&P 500 Stocks Above 50-Day Average ($S5FI)

Screen Shot 2019-03-21 at 11.03.42 AM

not good look – the number of stocks in S&P 500 are losing momentum and are falling below their 50 days SMA. about 21 percentage points from march 1st 2019.

Screen Shot 2019-03-21 at 11.11.28 AM

It’s in an amazing trend – not only there has been higher volume price increase in QQQ yesterday but volume increase was 50 percent above average!

lets look at 5 mins chart for NASDAQ composite

Screen Shot 2019-03-21 at 11.23.50 AM

just up and down and lots of volatility but the most important point is that the closing price of the day. Which is the most important price – its been going up since Friday of March 8th 2019 except for one day on 3/14/2019, which is last Thursday.

Screen Shot 2019-03-21 at 11.28.23 AM

Screen Shot 2019-03-21 at 11.34.10 AM

for the 3rd day in a row TQQQ closed above the 200 days SMA!Screen Shot 2019-03-21 at 9.29.20 AM

The only thing little bothersome is Russell 2000 has been falling in the last chart which is the ETF with volume

all the FAANG stocks are up – wonderfully yesterday. Netflix was a bumper. It went up 4.5%, up 16 + dollars !!!Screen Shot 2019-03-21 at 11.43.17 AM

So what is the conclusion? Price is the only true north star and it is up so I am long NQM19 and TQQQ.

Happy trading!!