Nothing is as important to institutional investors as progress on tax reform

Major indexes rose to new weekly highs, an indication that nothing is as important to institutional investors as progress on tax reform, which occurred during the week.  Also encouraging was central bank actions and surprisingly robust retail sales.  The Fed rate hike occurred as expected.

Again, not all stocks are taking part in the tax-reform rally.  While a few of our stocks posted new weekly highs, and even fewer shorts posted new weekly lows, the predominant pattern was long positions sagging again, on selling pressure that began a few weeks ago.  Rises in major indexes aside, just not much price movement in either direction among most of our stocks.  So, perhaps a break-even week at best.

Although a Congressional vote on the joint tax bill is expected next week, and expected to pass, it will be interesting to see whether institutional investors remain in a buying mood with stocks having risen so much already and tax reform arguably already priced in, or whether more stocks will continue sagging on selling by investors wanting to lock in profits early in the event a high volume of capital gain-deferred selling takes place in early 2018, which would further drive down prices. 

Highlights:  2 new weekly highs in long positions.  6 stocks with double-digit long gains:

     FIVN +15%        CECO +26%                                                         URBN +52%       LPSN +74%                                                                  

     FMSA +11%      NCI +22%                                                             

Congrats to those of you locking in long gain of +59% in BZN (34 weeks).

     

2 new weekly lows among short positions.  4 stocks with double-digit short gains:

                               EVH +21%                                  CECE +43%

                               EVTC +24%    

                               TRUE +27%

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