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RoboStreet – July 9, 2020
Alert! Golden Goose Lays Another Egg
Cross-currents are forming within the market internals that have traders and investors are having to factor in and weigh out. Earnings season is just around the corner with literally 80% of all S&P 500 companies offering no guidance, the $600 per week federal assistance checks run out at the end of the month, there is no clear-cut consensus for additional Congressional stimulus and the dollar is sitting on key support.
On the flip side, China’s market has broken out to the upside, emerging markets are in full rally mode, employment and housing data is topping estimates, big-cap tech and biotech are providing strong sector leadership and the death toll ratio related to the surge in COVID-19 cases are declining with more effective treatments as the healthcare industry races to produce a vaccine.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
The SPY traded in the narrow range this week, fluctuating between gains and losses and looking for direction. Value stocks (Industrials, Financial, and Transportation sectors) continue to underperform the market. The short-term bottom is at $293 and potentially can be retested in the next two weeks.
SPY longer-term overhead resistance is at $323. The market has started the July correction phase and can retest $293 level in the next 45 days. At this point, I do not think the market will break $293 level as China, semiconductors, and Work From Home stocks continue to outperform. Earnings season will start next week.
I expect the market volatility and the two percent daily market moves to persist. SPY top is set at $322 and the market can potentially retest this level in the next 1-2 weeks. The market can overshoot support and resistance levels when VIX is elevated. My strategy is to buy 5-10% market corrections. Based on our models, the market (SPY) will trade in the range between $293 and $330 for the next 4 weeks.
The market is trading right up against the level where it sold off by 7% on June 11 and makes for a good level book some partial gains. This week, for our RoboInvestor Portfolio, we did just that in our DR Horton (DHI), iShares China Large-Cap ETF (FXI), and Square Inc. (SQ) positions.
We recently added Fortinet Inc. (FTNT) and Workday Inc. (WDAY) that are sporting big gains as the market rivets its attention on big-cap software stocks. And we’re getting solid upside momentum from Cisco Systems (CSCO) and Target Corp. (TGT). So, there is plenty of opportunities, as long as one has the right AI tools to work with. And we do.
As the investing landscape takes on a more convoluted tone, the allure of owning gold as a hedge is gaining broad popularity. The price of gold topped $1,800 per ounce this week with analysts seeing $2,000 as the next stop. This would be especially true if the Dollar Index (DXY) breaks near-term support at 96.00 per the one-year chart below
Unrelenting fiscal stimulus by the Fed is putting downward pressure on the dollar, which naturally attracts buyers to gold. We’re long the SPDR Gold Shares (GLD) in the RoboInvestor Portfolio, but I’m leaning toward upping our exposure to the yellow metal by adding the VanEck Vectors Gold Miners ETF (GDX) as another hedge trade.
Applying our AI-driven Stock Forecast Toolbox, we see that shares of GDX carry an “A” Model Grade rating that bodes very well for the near-term and intermediate-term trend for the stock. Such a strong reading indicates investors and initiates adding to positions on down days – and I’ll be looking to alert our RoboInvestor members about this trade when all my signals tell me to do so.
Make sure you don’t miss out on this upcoming trade and all our future trades that involve only the best-in-class stocks and ETFs. Our Winnings Trade Percentage is a staggering 88.44%. Translated, we’re booking profits on roughly 9 out of every 10 trades we put capital at risk.
And even when some of our positions will trade below our cost basis, because we aren’t 100% perfect, with a modest degree of patience, our positions sharply recover and we exit them on snapback rallies. We have a streak of 21 winning trades going back to March 12 and I plan to keep it going!
The question is whether you’ll be along for the ride. Join up today and make RoboInvestor your system for printing steady profits and growing wealth the most cutting-edge AI technology available to investors today. It’s my life’s work and my AI platform is always learning, always thinking, and always making money.
“I’m investing my own money in each and every stock as my AI platform identifies.”And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
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