Upward market bias of recent weeks continued on release of tax reform plans

Upward market bias of recent weeks continued on release of tax reform plans by the Trump administration, something institutional investors have been waiting on since November.  Also helping was comments by the Fed that inflation is tracking lower than anticipated and not reason for rate increases to be more than minor.  Dow stocks did not rally nearly as much at tech stocks did – which led the Nasdaq Composite and S&P500 Indexes higher.

Just as “a rising tide lifts all boats”, broad-based buying activity by institutional investors raised prices of most stocks – including many of our recent long positions (but not necessarily all of our older long positions which have already moved up), our “underwater” positions but also many of our short positions.  Again, many new weekly highs for the week, and even a few new weekly lows. 

No large market decline took place in September this year, which is atypical.  October, however, is the next most likely month in which large declines historically take place.  Beginning to see more investment managers predicting a large correction soon – this bull market is over 8 years old, quite extended – but then again hard to predict since success – or failure – of tax reforms will have a lot to do with which way the market trends.  Either way, we will react to profit.

Highlights:  8 new weekly highs in long positions.  6 stocks with double-digit long gains:

     FIVN +13%                                                        BZH +48%   FMSA +58%             LPSN +92%    NEFF +136%           

     URBN +10%                                                             

                                

2 new weekly lows among short positions.  No stocks with double-digit short gains at this time.

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