Major indexes rose ever so slightly after passage and signing of the favorable tax reform bill

Major indexes rose ever so slightly after passage and signing of the favorable tax reform bill – much of the upward price movement had already occurred in prior weeks, on anticipation.    Otherwise, a slow week for stocks, typical for the pre-holiday.

With one final holiday-shortened week to go, 2018 is going to be seen as having been a very productive one, not only for traders like us (as usual), but even for some passive investors who held some specific tech-related stocks, blue chips or S&P500 index funds all year.  Even with major indexes posting good numbers for 2018, there were many stocks that tanked during the year, so real returns for passive investors depend on which, if any, good gainers they held, and how many calamities they avoided.

U.S. stock market is closed Monday, Dec 25 in observance of Christmas Day.  Expecting another quiet week to finish out the year, as is typical for this shortened holiday week, barring any unusual events internationally. 

Analytics:  It is time to deal with a few stocks in which our positions were found to be opposite of what revised analytics suggested when implemented in early fall.  Some of those positions were held through the counter-trend and have recovered or are recovering (CYBE, NPTN).  A few, however, only worsened for unusually significant losses and it makes sense to exit them this year for a capital loss, which can be used to offset otherwise good capital gains for tax purposes.   In Level 1, this includes FTK, HNRG and SNE.  These stocks will remain on the list, however, as they would have been productive throughout the year had the revised analytics been in place all year. 

In the future, should an analytic revision suggest we are holding a contrary position, our standard procedure will be to reverse that position immediately, rather than holding through as we did, so as not to fall into the trap of “holding losers long-term” which is often the undoing of many investors.

Highlights:  3 new weekly highs in long positions.  6 stocks with double-digit long gains:

     FIVN +16%        CECO +22%                                                         LPSN +61%                                                                    

     FMSA +14%      NCI +22%                                                             URBN +61%

1 new weekly low among short positions.  2 stocks with double-digit short gains:

     EVH +17%         TRUE +26%

Congrats to those of you locking in short gains of +40% in CECE (7 weeks) and +20% in EVTC (13 weeks).

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