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VoSI Market & Report Watch List Review for the Week Ended November 15, 2019

Current Report Watch List
The VoSI Report Watch List is a compilation and reference list of stocks for which Pocket Pivot or Buyable Gap-Up Reports have been issued. Not all stocks for which a Pocket Pivot or Buyable Gap-Up report has been issued will necessarily be added to the list. It is not intended as a "buy list" or a list of immediately actionable recommendations. Stocks on the List may or may not be in proper buy positions, and investors should exercise discretion and proper judgement in determining when and where stocks on the List can be purchased. The following notes are intended to assist in this process. Please note that members can enlarge the List image by clicking on the body of the email and then holding the Control Key while pressing the "+" key until it is large enough to read.

General Observations: 
Major indexes continue to make new highs in a rally that has so far been led by large-cap alt-currency stocks of companies with established, reliable business models. The comparison chart below shows the NASDAQ Composite leading all indexes, ahead of the S&P 500 and the Dow, while the small-cap Russell 200 Index lags. This is why the Market Direction Model has been focusing on the NASDAQ Composite, Direxion Technology 3x ETF TECL, and the S&P 500 when it is on a buy signal. Note, however, that the Russell 2000 had a very steep move off the early October lows with greater acceleration than the Dow and the S&P. It has flattened out over the past two weeks as small-caps lag near-term.

The Market Direction Model (MDM) remains on a buy signal.

Apple (AAPL), Alphabet (GOOG), and Microsoft (MSFT) continue to do some of the heavy lifting for the major market indexes as they continue higher in persistent uptrends. Note the healthy volume levels on their daily charts below. Only MSFT has 20% or better earnings growth, while AAPL comes in at a tepid 4% and GOOG posted an earnings contraction of -2% in the most recent quarter. Nevertheless, these are established, reliable businesses that aren't going to disappear from the face of the earth any time soon, hence qualify as solid repositories of cash that piles into the market. Fund managers must be exposed to such companies to keep up with their bogies.

One of the oddities of this market is the tendency for highly bearish technical action to resolve bullishly. Note the chart of Lululemon Athletica (LULU), which only two weeks ago was failing on a recent breakout and breaking below its 50-dma on a steady stream of heavy selling. Instead of resolving bearishly in a continued downtrend, LULU simply shook out at the 50-dma and turned higher, marching right into new-high price territory on below-average volume. This is, however, consistent with two prior heavy-volume sell-offs that resolved bullishly. LULU has now broken out again, and the question is whether this breakout will meet the same fate as the last three, all of which failed. Note the highly contrarian nature of the uptrend, where breakouts are sell signals and action that is "Down Big on Volume" adds up to a buy signal. Such is the nature of a machine-driven, QE market.

Gold and silver have corrected, and both the SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) have posted undercut & rally moves as they move back above their prior lows from early October and late September, respectively. The GLD, below, has rallied back above its 137.80 low of October 1st which can be treated as a long entry signal using 137.80 as a selling guide. The SLV, not shown, has undercut its prior September 30th low of 15.83 and closed at 15.85 on Friday. It can be treated as a long entry signal using the 15.83 price level as a selling guide. Given the proximity to their prior lows based on Friday's closing prices in the GLD and SLV, one might also add another 1-3% to the downside when setting their stop to account for downside porosity.

Despite the correction and pullback in precious metals, gold-related stocks that we've reported on recently are holding up well. Franco-Nevada (FNV), which owns gold production streams rather than mining the yellow metal itself, posted a buyable gap-up after reporting earnings Wednesday morning. Gold miner Kirkland Lakes Gold (KL) posted a pocket pivot the week before and continues to hold up in is base.

This remains an odd, difficult environment where we see little big-stock potential in terms of big upside moves. Big-stocks are those that have top line fundamentals and technicals thus in more traditional markets, tend to outperform the rest. In today's QE-laden market, alt-currency type stocks as mentioned earlier in this report can, over time, be highly profitable as their charts so far have demonstrated, despite lacking the typical fundamental thrust (earnings, sales, etc) of big-stocks. Most of the more profitable activity seems to occur in stocks after they report earnings where high-velocity,  high-volatility moves can result in high time-value swing-trades. If and when we begin to see compelling situations emerge we will report on them as appropriate.
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. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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