A thoroughly uneventful, abbreviated mid-summer week suddenly ended on an upward bias as Friday’s surprisingly good employment report triggered some buying – extending the weekly down-up-down-up market trading pattern a fourth week. Stocks again unable to budge much in either direction as institutional investors do not share the same outlook – plenty of institutions interested in selling at highs, while others still holding and even buying to obtain one more nickel of per share gain.
This current market stalemate is exactly the conditions that begat the phrase “sell in May and go away” – professional money managers might as well vacation in the Hamptons as try to make headway in this stalled summer market (or is it because they’re away that the market is stalled?).
We do continue to trade this market because our weekly commitment of effort and time is a small one, and because among our stocks there are always some terrific moves we’d hate to miss, like the +57.6% long gain in CLVS in just 2 weeks (Level 2) and +69.4% first week long gain in new listing OMNT (Level 3).
Many of our stocks remain stagnant, however – with recent positions not yet having moved significantly and few weekly highs/lows currently – typical of mid-summer. As dull as this market is, all it will take is one international incident, one announcement of legislative progress on healthcare or tax reform or a “surprising” corporate earnings announcement and the market will roar to life one direction or the other, to which we will react as the institutional investors do – another good reason not to be lulled into inattention.
Highlights: 4 new weekly highs in long positions. 5 stocks with double-digit long gains:
TRUE +35% FIVN +46% LPSN +63% NEFF +80%
FRPT +45%
2 new weekly lows among short positions. 2 stocks with double-digit short gains:
FTK +26%
PIR +29%