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 !

 

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 % !!

Screen Shot 2019-04-06 at 3.19.52 PM

what about sectors, How did they do ?

Screen Shot 2019-04-06 at 3.20.05 PM

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 !!

 

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.

 

 

 

Market weekend review week of Sept 17th 2018

Screen Shot 2018-09-22 at 11.04.58 AMScreen Shot 2018-09-22 at 9.57.30 AM

looking at the big picture of weekly chart we see that it is  good picture

trading what we see rather than what we think is key. the chart is explaining to us that the price action is good and majority of stocks are above their 50 days SMA in S&P 500.

1 red flags though. QLD daily in H-A price charts – it has a 3rd red volume bar on a green candle stick. but the volume is less than 1 million.

NASDAQ is down 2 % off its all time high. NYSE Advance Decline line A-D line, which is a breath indicator, is slightly below its all time high.

Market sentiment indicator is up for the week 56.9.

Decision : I am still long on QLD and NQ.