Weekly Cycle: Market Outlook for 06.18.2018

Weekly Cycle: Market Outlook for 06.18.2018

Each week, we review the stock market using a specific set of information sources in order to cut through the noise generated by media publishing attention grabbing headlines. Weekly updates give e the opportunity to play trends while not overreacting on a daily basis.

 

“Technology innovation is happening in all sectors of our economy and all parts of the world”

“We now have more angel and seed and venture capital being invested in startups every year than ever before. It took a long time, almost twenty years, to pass the go-go years of 1999 and 2000, but pass it we have and even though many see that as a sign that we are in bubble territory again, I am not one of them. Technology innovation is happening in all sectors of our economy and all parts of the world. I think the expansion of capital being deployed into startups can continue for some time to come.1

Rapid Experimentation
Fred Wilson AVC

 

 

Market Performance

Performance of a handful of macro indexes, as well as index and ETFs on specific sectors of particular interest. 

Observations:

  • SPY slightly down over last week.
  • Overall, seeing less volatility across major indexes
  • Emerging markets [$VWO] down nearly 9% over last 3 months.

 

Technical Indicators

Based on data and info from TradingView (Click for 30% off a pro subscription)

Scores based on the cumulative total of positive and negative technical indicators signals over three time horizons on Trading View. Scores are weighted by multiplying total as follows: daily (x 1) weekly (x 2), and monthly (x 3). 

Observations:

  • Tech remains strong [$QQQ, $HACK, $CQQQ]
  • [VFH] Financials weakened after one strong week last week
  • Worldwide indexes much worse than a week ago

 

OldProf’s Risk Analysis

Each week, at the Dash of Insight blog, OldProf takes a look at a variety of sources to gauge overall market risk on both a short and long-term basis. He tracks a handful of indexes, economic indicators from respected sources, and volatility indicators. His weekly updates include a discussion of events with potential to effect markets, as well as general insight. Highly recommended reading.

This week, OldProf writes in Weighing the Week Ahead: What is Working, and Will It Persist?

“Short-term trading conditions continue at favorable levels, much improved from a quarter ago. Also noteworthy is the reduced volatility.”

“My fundamental triad: Growth in expected earnings, low recession risk, and comparison of stocks with other easily purchased assets. I provide the ingredients every week. You need not read my entire post, although I appreciate those who do. You can just check out the indicator snapshot. And my secret sauce? I know enough to find real experts and then follow their lead.2

 

StockTrader Recap

Mark Hanna publishes a weekly Market Recap full of charts and insight on news and market trends at StockTrader.

This week, Mark writes in Weekly Market Recap Jun 17, 2018 – StockTrader.com

“Short term: The S&P 500 was quiet while the NASDAQ continued to churn up.”

“After two weeks of rallies, the S&P 500 mostly consolidated this week – except for Friday the action was very reminiscent of 2017 with almost no volatility at all intraday and modest gains or sideways action.3

 

Articles of note

“no guarantees that stocks will be up big over the long run [because] everyone has a different definition of.. long run”

Why Do Stocks Generally Go Up Over Time?

“The long-term track record of the world stock market is not perfect but it is quite compelling. However, long-term average returns are promised to no one because we don’t know what the future holds. In many ways, investing in the stock market is a faith-based exercise; faith in human ingenuity; faith in the capitalist system; and faith in other people wanting to improve their lot in life4

Buffett’s rule is absurd: “Anyone who has ever invested in the history of the world has lost money at one time”

The #1 Rule in Investing
Charlie Bilello pensionpartners.com

“In fact, the entire notion is absurd. Anyone who has ever invested in the history of the world has lost money at one time or another. Buffett himself lost close to 50% on two separate occasions.5

“a bad case by the government has led to, at best, a merger that was never examined for its truly anti-competitive elements”

AT&T, Time Warner, and the Need for Neutrality
Ben Thompson Stratechery by Ben Thompson

“The question is not what AT&T can do to increase the revenue potential of Time Warner content (which was the government’s focus), but rather what Time Warner content can do to increase the potential of AT&T’s services, particularly mobile.6

“constantly amazed at people’s ability to be completely blindsided by an unexpected event”

When the Unexpected Leads to the Unexpected

“There are things that happen in this world on a regular basis that are totally unexpected — natural disasters, accidents, terrorism, disease, tragedy, market crashes, geopolitical events and so on. There are certain things you can never really plan for in terms of when, how, and why they’ll happen.7

 

 

 

 

 

  1. https://avc.com/2018/06/rapid-experimentation/
  2. https://dashofinsight.com/weighing-the-week-ahead-what-is-working-and-will-it-persist/
  3. https://www.stocktrader.com/2018/06/18/weekly-market-recap-jun-17-2018/
  4. http://awealthofcommonsense.com/2018/06/why-do-stocks-generally-go-up-over-time/
  5. https://pensionpartners.com/the-1-rule-in-investing/
  6. https://stratechery.com/2018/the-need-for-neutrality/
  7. http://awealthofcommonsense.com/2018/06/when-the-unexpected-leads-to-the-unexpected/
  8. https://twitter.com/naval/status/1002106893265920000

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