December 22, 2019 6:24pm PST
Weekly Rant
2019 Headlines: Inverted Yield Curve, Recession, Trade War, Impeachment!
Bahahahahaha! Noise. It’s all noise. Turn off the TV. Stop reading the news. The entire year “they” have been talking about the yield curve inversion signaling a recession, the trade war causing a contraction or the impending impeachment unleashing all kinds of nasty uncertainty. When will they get it right? I’ll tell you when…when it’s over, when it’s too late. They will be left stunned and speechless searching for hindsight answers to try and explain it all. It’s always the same; most everyone gets it wrong until it’s too late, until it’s over.
It’s kind of like what we used to say to fellow surfers when they arrived the day after the swell…”you should have been here yesterday”.
Broader Market Review
OK, rant over. Broader stock market price action is very strong. The broader market trajectory is steepening. The separation from the 22 month resistance zone is widening after a re-test earlier this month. Price is channeling up seeking higher and higher resistance levels. Dips are likely to be shallow offering opportunities to add. The Dow, S&P 500 and Nasdaq should ramp higher from here into summer. The broader market is now going up faster than a New York elevator. Did someone press Penthouse? Oh, I did. Check out the following charts with updated price projections for the Dow ETF (DIA), the S&P 500 Index ETF (SPY) and the Nasdaq 100 (QQQ).
DIA daily
SPY daily
QQQ daily
Surfing and Investing
As many of you know, I’m an old surf dude. I started surfing when I was about 14 and still manage to get my old body out there when I can. And, in case you haven’t noticed, I recently changed the landing page of my website to a beautiful photo from inside a wave. Ahhh. This is the view from the “tube”, the sweet spot, the green room, locked in and positioned in perfection. This is what surfers hoot and holler about. Cowabunga!
Conditions have to be just right for a surfer to get into this position. The swell needs to be from the right direction. The tide has to be just right. Wind speed needs to be either very light or offshore. Crowd size needs to be minimal. All the little pieces of the puzzle must fall in to place to get this view.
Investing is like surfing. Conditions have to be just right. Broader market cycle positioning needs to be evident. Expansion channel alignment needs to be confirmed. Sectors need to be positioned properly. Interest rates should be near neutral. Crowd size needs to be low. All the little pieces of the puzzle must fall in to place to get this view.
The current view from inside the charts is not unlike the view from inside the tube; positioned for perfection. Positioned for one of those rare rides. This is what I hoot and holler for. Cowabunga! Don’t dare let me say “you should have been here yesterday”.
Inside the Charts
The expansion is under way. The world is starting to break out. The bulls are running. I don’t know how to say it more clearly. The current view from inside the charts is like the view from inside the wave, simply beautiful. Come on in and have a look around. Step inside the wave and see the sectors, subsectors and individual companies that are set to start pumping during 2020. Grab your board and paddle out with me. Let’s go.
Just go to the Trade Alert page and scroll all the way down to Entries. There you will find my favorite ETF’s and individual stocks. Look at all the ETF’s from my November 11th post. Look at all of the financial and technology stocks. There are enough ideas there to build a portfolio of any size.
Weekly Chart Ideas
This week I am sharing just a few new charts. There are just so many great charts that it’s becoming difficult to monitor them all. Over the next two weeks I will be thinking about 2020 and what changes I can make to improve content and distribution so now is the time to offer any suggestions you might have. Don’t be shy as I value any comments you want to share.
I will, of course, be tuned in to price action over the next two holiday filled weeks but will be taking a one week break from writing a lengthy post in order to spend more time working on 2020 goals and ideas.
Chicken Soup for the Soul Entertainment Inc (CSSE)
This is a micro cap stock that looks good for a quick ramp to $12; a 40% gain. It should swing up fast if it can cross over the area where I drew in the little circle. Risk is any close below $7.00. Fun fact..I gave a eulogy for my father in law in 2003 and a Chicken Soup for the Soul author was in the audience. She must have liked my little speech as she submitted it to the Chicken Soup people and they published it in one of their books. Check out the chart below. Swing trade..higher risk.
The next two are technology stocks in the software infrastructure space. As I have mentioned previously, this is an area that looks poised to rip during 2020.
Appian Corporation Class A (APPN) daily..2018-2020
Bandwidth Inc (BAND) daily..2018-2020
Merry Christmas and Happy Hanukkah
I wish you a blessed, loving holiday season and I thank you for allowing me the opportunity to share my thoughts and charts with you throughout the year. I am grateful.
Cowabunga!