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RoboStreeet – September 24, 2020
Bulls Groping For A Bottom As Rough September Plays Out
History has rarely been on the side of the bullish camp in regards to market performance, and 2020 has been a genuine page out of the history books. The prevailing negative tone is rooted in some fluid factors that include Europe facing the possibility of more lockdowns, flu season aggravating a resurgence of coronavirus cases, the 2020 election, and further tensions with China.
Volatility is running high. The technology sector was able to bounce back from the 15% correction level on Monday, only to give it all back and then some on Tuesday. Values stocks (Energy, Banks, Transportation, and Industrials) underperformed as the result of the strong performance of the U.S. Dollar. The markets are oversold and due for a bounce in the next week.
On the downside, I still expect the technology and the SPY to trade near the 50-day moving average this week. However, the bottoming process has started today as AAPL seems to be finding support and the markets are near its bottom.
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 TLT and the DXY continue to trade in the range and do not show any signs of the market reversal. The DXY is trading near key overhead resistance $94-95. Short-term, the SPY overhead resistance is at $342 and will trade between $318 and $342 for the next couple of weeks.
The SPY new top is now set at $360 and potentially can be retested again only during the first two weeks of October. SPY short-term resistance is at $342. I would be a buyer using any short-term corrections and use a dollar-cost average to accumulate positions at this level. I will short the SPY once it approaches $360.
Based on our models, the market (SPY) will trade in the range between $318 and $360 for the next 4 weeks. 
The tech sector suffered a pullback that was almost twice that of the broader market with the Nasdaq sliding about 15% off the recent peak. It stands to reason that mega-tech stocks will re-engage their leadership role once the current correction has run its course. Being the most heavily-weighted market sector by a wide margin, the success of the stock market depends on the performance of big-cap tech.
Technology companies are a fairly agnostic sector, being less subject to political influence, commodity pricing risk, government regulatory risk, labor shortages, and wage risks. With several secular trends in place – 5G, cloud computing, big data enterprise, IoT, edge computing, AI, autonomous driving, mobile eCommerce, robotic automation, it’s only a matter of time before the tech sector rears back up charges forward.
The Invesco QQQ Trust (QQQ) illustrates just how concentrated the biggest stocks are in controlling the direction of the Nasdaq. The top ten holdings in the QQQs occupy 58.18% of total assets, up from 52% just a month ago. So, the market as it pertains to the tech sector is getting narrower.
As Apple Inc. (AAPL), Amazon.com (AMZN), and Microsoft Inc. (MSFT) go, so goes pretty much the rest of the Nasdaq. However, the rest of the line up is also the crown jewels of their respective sub-sectors where revenue and sales growth are very robust during the current pandemic economy.
Such efficient and powerful execution of their business models during such challenging times will only bear even more fruit in the way of earnings growth when the domestic and global economies normalize post-coronavirus.
When applying our proprietary AI tools to the QQQs, we are getting a strong buy signal that makes for a bullish addition to our RoboInvestor Portfolio in the near future. When our internal indicators coincide with a reversal in the intermediate-term market trend, we’ll be looking to put the Qs to work for RoboInvestor subscribers.
The Seasonal Chart below is flashing four “Higher” probability readings for the next 20, 30, 40, and 50-day periods. The data has been back-tested to 1999, so it’s been stress-tested through the dot.com meltdown, the Great Recession, and everything in between and after.
I’ve spent more than a decade fine-tuning our AI models, resulting in an investment platform that is delivering a Winning Trades Percentage of 89.31%. 
Here’s a table of some of our recent closed trades illustrating the quality of the companies we work within the RoboInvestor Portfolio. Only the best blue-chip stocks and ETFs are employed for our investment purposes. 
We haven’t booked a loss since March 12 with a string of 34 winning trades during that time. Some of our current positions include Amazon.com (AMZN), Abbott Labs (ABT), CSX Corp. (CSX), Kimberly-Clark Corp. (KMB), and Microsoft Inc. (MSFT). We’ve also been active in shares of the SPDR Gold Shares ETF (GLD) that has served us well.
As the road ahead for the market is going to be certainly bumpy and precarious, I want to encourage all readers of this column to take me up on my offer to guide your portfolio through the next few months and the year ahead by joining as a member of RoboInvestor. Take the guesswork out of asset selection and put the power of AI to work today in your portfolio with RoboInvestor.
“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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