Indices tend to correlate so today's continued strength in the S&P 500 and other indices should drag the NASDAQ-100 higher, despite the disappointing earnings from Apple Computer (AAPL). AAPL carries a 12.3% weighting in the NASDAQ-100 (reduced from 20.5%).
France and Germany agreed on a deal to expand the European rescue fund, and the Bank of England recently increased the size of its asset purchase program, financed by the issuance of central bank reserves, by £75 billion to a total of £275 billion. All of this means more quantitative easing is on the way. Signs are pointing to a market that can continue its move higher where junk stocks outperform leading stocks, perhaps in a similar vein to what occurred in 2009 when the U.S. Federal Reserve stepped in with its quantitative easing program.
The model has thus switched to a buy signal. Of course, keep in mind that other Euro-timebombs can go off so the model stands vigilant to reverse its signal if necessary.
Since we are still in a period of unusually high volatility, some members may prefer to pyramid into their position slowly, letting the price of their respective ETF(s) prove themselves before adding to their position(s).
IWM (Russell 2000)
SPY (S&P 500)
UWM (Russell 2000)
SSO (S&P 500)
TNA (Russell 2000)
UPRO (S&P 500)
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2020 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.