Published April 6th, 2018
We brought TimingCube to you almost 17 years ago now for the sole purpose of providing subscribers with access to a model that both protects our investible money as well as giving us the opportunity to profit whether the market is rising or falling. We realized we simply could NOT afford to suffer big losses when the market was falling; for NOT losing leads to us winning very BIG over time. After a few years of relative calm in the stock market where our approach to investing was unlikely to outperform the broad market, we are now in a period of very high volatility where we at least have the chance to flex our muscles and generate some above-market returns. Since the long Buy signal from last August 31st as the market has transitioned into a period of volatility, we are very pleased with the results:
The good news about this chart is that we popped higher as the market weakened – both in February and again in late March. That is exactly what we want to experience! We are now up +23% in that period while the market-leading Nasdaq 100 (QQQ) is higher by one fourth that amount. Obviously, we have no idea what the future holds and the market may very well catch back up to us. But for now, we are encouraged that the market downturn so far in 2018 has been an opportunity for us to PROFIT! We hope that is a trend that continues!
High volatilty continued to dominate stock trading this week. The small gains from the prior week were quickly wiped out Monday on a variety of catalysts: trade issues with China, President Trump’s volley of rhetoric regarding market leader Amazon (AMZN), and a sharp drop in recent leader Intel (INTC) on reports that Apple (AAPL) will internally source semiconductors for its products. The -2.2% slide kicked off the week with a sour tone. Stocks bounced back Tuesday on little new information other than a solid showing in auto sales and support for the S&P 500 at its 200-day moving average, a key reference point for investors. Heartened by that support, buyers came into the market to push stocks higher by +1.3%. Investors looked past some trade-related announcements Wednesday with new Economic Council advisor Larry Kudlow offering soothing words on the topic to investors. Homebuilders and consumer discretionary stocks performed exceptionally well on the day with large builder Lennar (LEN) posting better-than-expected earnings. Stocks added +1.1% to recover all of Monday’s downdraft. Stocks added a third straight win Thursday with a +0.7% advance on little new news. However, shortly after the market close President Trump announced another layer of tariffs on China sending stock futures quickly down -1%. Stocks dropped further during the Friday session as administration officials offered no conciliatory remarks to stem the trade-driven concerns. Stocks closed down -2.19% with the S&P 500 spending its 10th straight day inside a wide 100-point range between 2575 and 2675. A weak monthly employment report had little impact on the trading as the trade issues dominated.
Another very volatile week for stocks left the S&P 500 (SPY) still above its 200-day moving average albeit ever so slightly. The large-cap index gave up -1.30% while the Nasdaq 100 (QQQ) slid -2.19%. The small-cap Russell 2000 (IWM), considered less impacted by trade issues, nevertheless tossed off -0.97% for the week.
Warm wishes and until next week.