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RoboStreet – April 15, 2021
Earnings Drumbeat Should Be Loud And Impressive
Already in the first formal week of the first-quarter earnings season, we are seeing some standout top and bottom-line results coupled with solid forward guidance. The big banks always lead off and Goldman Sachs (GS) truly put up some heady numbers that bode well for financials with high exposure to IPOs, M&A, and proprietary trading.
Granted, most leading stocks have rallied strongly in front of the reporting season, so it should come as no surprise if there is some selling on the news. There is a fairly consistent pattern of when tech is up value is down and vice versa. At some point, both camps could rally together in that it is hard to argue with the prospects of each. It’s all pretty bullish as long as the stimulus money keeps flowing in.
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.
From a technical standpoint, the $SPY is currently trading in a narrow range. As long as the $SPY is trading above the $397 level the path of least resistance is to the upside. Technology stocks sold off this past week, with the exception of a few mega-cap tech names, and the economy reopening trade was back on.
Our model projects the $SPY reaching the $415-$420 level by the end of April. The $DXY continues its move to the downside. The TLT continues to trade in the range.
I would consider raising cash at this point as the best part of the recent rally is behind us. Based on our models, the $SPY can pull back 10-15% in the next 2-6 weeks. Based on our models, the market (SPY) will trade in the range between $388 and $420 for the next 6 weeks.
While equities are garnering most of the investor attention, there are two trends that deserved to be monitored and taken into account as to how they can influence the current market landscape. The first is the strong rally in commodities and the impact higher soft and hard commodity prices are having on producer prices, which jumped in March to the second-highest reading since being tracked. The Invesco DB Commodity Index Tracking Fund (DBC) corresponds closely to the price movement of the CRB Index. For investors, this is a nice inflation hedge to own, and for traders, DBC is liquid and has a very active options chain to work with.
The other trend is somewhat of a two-edged sword, and that would be the downward trend in the dollar. Two months ago, the Dollar Index (DXY) found support at 90.0 and traded up to 93.5 as yield on the 10-yr T-Note rose to 1.75%. Historically, the dollar trades higher when bond yields rise, and tend to decline when yields fall, especially if the Treasury is issuing hundreds of billions of dollars in new debt.
For investors looking to trade the dollar from both the long and short side can do so by utilizing shares of Invesco DB US Dollar Index Bullish Fund ETF (UUP) and the Invesco DB US Dollar Bearish Fund (UDN). Both ETFs have liquid options chains for trading and hedging and are highly correlated to the DXY.
The AI-driven platform that we employ for our RoboInvestor advisory service, is confirming the current downtrend for the dollar. When we plug in UDN, the bearish dollar ETF, we get no less than three “Higher” probability readings for the next 20, 30, and 40-day periods. When the dollar loses ground, shares of UDN trade higher.
Our AI system has put our RoboInvestor members in current winners like PayPal Inc. (PYPL), Amazon.com Inc. (AMZN), and Apple Inc. (AAPL) that we are holding through earnings season. At the same time, our indicators have been signaling for us to sell into the market’s strength, and we booked some heady profits in Goldman Sachs Group Inc. (GS) and Freeport-McMoRan Inc. (FCX) this past week.
My proprietary AI models have been developed over many years, and they are always learning, crunching data 24/7 and generating incredibly valuable data everyday that we apply to RoboIvestor for the benefit of our subscribers and myself. I invest in every trade recommended within the service and on the journey of wealth creation with you.
Our track record in the table below is a reflection of just how accurate our AI-based investment platform is a strong ally in not just this market landscape, but every market landscape. Going back over three years, our Winning Trades Percentage is 91.71% and is a performance record that would be hard to find anywhere in the marketplace for advisory services that even comes close.
My #1 recommendation today is for every reader of this column to take the initiative and put RoboInvestor to work for your portfolio A.S.A.P. RoboInvestor recommends blue-chip stocks and ETFs that cover market sectors, currencies, commodities, interest rates and volatility. We make money in both up and down markets and so should you. Don’t delay and sign up today. I look forward to welcoming you aboard.
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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