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RoboStreet – June 24, 2021
End Of The Quarter Window Dressing Stokes Buying
Two market-moving scenarios are underway this week, Russell 2000 rebalancing and Q2 end of quarter window dressing by portfolio managers repositioning some assets in mega-cap tech stocks following the decline in bond yields. When FAANG plus MSFT, ADBE, NVDA, and TSLA can draw buyers, the major indexes will find their way higher.
There had been a strong commitment to the reflation leading up to and into the middle of June, but after commodity prices ex-crude sold off coupled with an accommodative Fed policy statement released last week, the market pivoted back into growth with vigor.
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.
The $SPY retested the all-time high level at $424. All sectors rebounded from oversold levels set last Friday. The technology stocks closed at a new all-time high. The reflationary stocks (energy, banks, materials, commodities, industrials) rebounded from the oversold levels.
The $DXY has broken above $90.60 resistance and has confirmed it break out. The next level of resistance at $93. The $TLT mirrored the price action in the U.S. Dollar and next level of overhead resistance is at $148.
The $SPY short-term support level is at $414, followed by $404. The SPY overhead resistance is at $425. Even if the $SPY is able to trade above the $425 level, the market can only make incremental highs.
I would consider rebalancing the portfolio at this point to be more market neutral. The second wave of the sell will continue for the next 2-4 weeks. Market corrections are never a one-way trade.
Based on our models, the $SPY can pull back 10-15% from the all-time highs in the next 2-4 weeks. If you are trading options consider selling premium with September and October expiration dates.
Based on our models, the market (SPY) will trade in the range between $385 and $425 for the next 2-4 weeks.
The financial sector has enjoyed a terrific year-to-date rally as the yield curve steepened from January to May. However, when bond yields pulled back, so did the leading stocks in the bank and financial sector. As such, attractive entry points for both the financial sector and individual stocks within the sector have been created. Shares of the Financial Select Sector SPDR ETF (XLF) offer investors a default ETF for playing the sector and is easily the most widely held and traded by institutions. The top 10 holdings in XLF are all well-known blue-chip leading names that comprise 55% of total assets.
Our proprietary AI platform tools are bullish on XLF. The AI-powered Seasonal Chart is one of our most precise tools for monitoring near-to-intermediate term price guidance. As per the image below, there are “Higher” probability readings for the next 20, 30, 40 and 50-day periods.
For those investors seeking single stock picks, look no further than JP Morgan Chase & Co. (JPM). As the leading mega-bank both in the U.S. and globally, JPM is the workhorse and bell weather for the sector. Their dominant presence in commercial and retail banking is augmented with the number one rated investment research division and a highly successful proprietary trading operation.
Shares of JPM topped out at $167.44 earlier this month and settled back down to $150 where it emerged from a two-month base. At its current price of $152.50 the stock is trading at a steep discount to the high. Additionally, our AI-driven Forecast Toolbox is just as bullish on JPM as the sector itself.
When we input JPM into the model, we get a 6-month target price of $218.92, implying an upside move higher of 43%.
It’s these kinds of forward predictions resulting from back tested AI crunching data that we can buy XLF and JPM with conviction in our RoboInvestor advisory service that boasts a phenomenal 91.45% Winning Trades Percentage.
This torrid track record is the result of producing trades in blue-chip stocks and ETFs that represent indexes, market sectors, foreign markets, commodities, oil, precious metals, currencies, interest rates, and volatility. There are few places our AI models won’t go to find profitable trades, which makes RoboInvestor very unique and a one-of-a-king service for retail investors.
At any given time, we manage a portfolio of 15-25 positions. They can be long or short, using inverse ETFs as our asset vehicles of choice. We email our members a bi-monthly newsletter with two new investment recommendations every other weekend that provides trades to act on come the opening bell on Monday.
When our AI indicators determine when we should start to exit out of a position, I will typically recommend selling 50% of the position, looking to squeeze any extra profit from the trade, and then closing the second half when the stock has run out of near-term momentum. It’s been a winning formula for over three years and continues to only get better with time as our AI platform is always learning, always thinking 24/7.
Put the power of cutting-edge AI technology to work in your portfolio and become a RoboInvestor today. Having a dynamic set of scientific algorithmic tools at your disposal and service to ferret out trades with the highest probability for profits is how one builds wealth today, tomorrow and for years to come.
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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