Gut Feeling

Gut Feeling

It’s June 25th and the last week while on vacation with my family I had the urge, if you’re a mom you’ll know exactly what I’m talking about.  I had the feeling I was nesting.  I had to consolidate all my accounts, get my 401(k) options in order so that when the time comes, I can as Marty Schwartz said “Going for Gold”.  This last week while at the Beach house, I prepared and began to anticipate the inevitable “Correction” or impending Bear Market. 

Don’t freak out but the last time I had this feeling was the Summer before the Housing Crisis.  Don’t get me wrong, I don’t even look at the Housing Market which tells me it’s not over heating.  The Dow and S&P seem fine.  Hell, even the other day the talk was all about the Dividend Aristocrats.  When the Mass Media talks about Dividends, I don’t really feel the need to sell everything and run to cash. 

HOWEVER, something gives me that feeling again.  It’s not like Oil has led this Bull Market to the heights it has already reached.  If Oil and the general sector had lead this market to where it is and it was cracking like (a Pharmaceutical company from Canada, 😉), then yes, I would feel confident about scaling down.  Yet, that’s not the case. 

The Dow is going higher in a normal, lock step manner.  The S&P is climbing the stairs at a respectable, almost hypnotic pass.  The NASDAQ however, as usually and as advertised is a little bit more erratic.  AMZN, blockbuster acquisition, disrupt the grocery store /food industry.  AMZN, trying to take over the clothing/retail industry and the thing that concerned me the most; the IPO market is getting heatedThank you Market History for this one.  Refer to my post on the evolution of Entrepreneurs in America and why the U.S. is the best place in the world to invest.  Also, take the time to subscribe to my free investment course.  It’s 2017, you don’t need professors or talking heads on TV to tell you how to invest.  Learn here!!!!

 

IPO’s and Market History.

The majority of Bull Markets come to an end when everyone and their mother start s to go Public.  I was watching CNBC the other day, (waiting for the kids to finally get dressed for the Beach) I always find time to look at the quotes, LOL.  The tease to sit through the commercial was how crowded and busy the IPO market was getting.  (Pro Tip:  Pay attention when everyone gets excited about how many IPO’s are coming to market)

A day or two later, a new CEO for a new IPO was being interviewed on CNBC and I don’t think he answered a single question.  I couldn’t understand a single thing he was trying to say.  Now that I think of it, there was another CEO on the next day that sounded the exact same way.  I realize this may be a bit petty and insignificant but I’m not bragging when I say this; I’ve been around the block a few times and have had the pleasure of making most mistakes anyone could ever make.  I’ve learned the hard way when I haven’t listened to my gut.

Timeframe?

I’m not calling this market, I’m just saying I’m getting my house in order for when the time comes, and it will come, I’m ready.

This market has been a Bull since 2009 and from my previous posts and my courses, you well know that the average Bull Markets last 3 ½ - 4 years.

Remember, I think the Market is showing strength, but the Nasdaq 6/9 was down 1.55% on major volume.  This is the classic definition of a distribution day.  The very next day, the NASDAQ was down another .90% on even higher volume which would lead some people to the conclusion that it was distribution day #2.  Look closer and you will see that it didn’t end the day at the low and it bounced off its 50 DMA.  The very next day, the index explodes up on even bigger volume yet.  1.84% up on 131% greater volume.  Again, this is extremely Bullish.

The S&P seems tired to me.  It moves along at a sluggish pace but it does keep creeping higher.  I know, I’m impatient and requesting fast money but it is creeping.  The S&P first exploded and hit the invisible psychological ceiling of 2400 back on March 1st.  the market then consolidated these gains and migrated back to the 50 DMA until mid to late April.  The Market then jumped back up the 2400 level again and every once in a awhile peaked its head above this psychological level a few times before giving in to the Bears and driving the index back down below the 50 DMA in dramatic fashion.  Fear happens faster than Greed (Future post).  The Market immediately rallied back with so much buying power and Bullishness that it propelled us above the 2400 market for good, well, for the time being.  All that being said, the market has responded extremely well after breaking through this level and seems to be gathering strength.  The Market has up volume on up days and lower volume days on down days, this is exactly what you want to see in an upward moving market.

 

The Dow on the other hand seems to be on the same trajectory, headed North.  I am so desperately trying to find undervalued Dividend payers to complement our incomes and I keep coming up with one.  There are 50 Aristocrat Dividend payers and they are all over valued, extended in price or just plain too expensive to add to that portfolio.  This is the conflicting information we get as investors.  The general markets are going up but the stocks we want to buy are too far extended.  This is why I am getting nervous.  I say here that I continue to hold, look for good buys but am quick to be a skeptic.

 

I love my ETF’s and index funds because as long as the Markets continue the monotonous climb higher, I make money.

My individual stocks that are growth opportunities continue to wane.  The last good buy I had was NVDA and now its ~60% HIGHER FROM THE LAST TIME THE PUNDITS SAID IT WAS A SHORT. LMAO.  The dividend stocks I talked about are all over valued and I cannot wait for the market to take a break.

Moral of the story, when it seems like all you have to do to make money is buy the dips, get focused, a change of trend is coming.  I wish I could tell you when but I will be ready.

 

Be the smartest investor in the room.

Welcome to the Nerdery,

Chad