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RoboStreet – June 3, 2021
Market Faces The Test Of Seasonality
Sell in May and go away didn’t fully materialize this year, but will there be some gloom in June? That’s the question being asked about a market that has suddenly been hijacked by a handful of meme stocks, making headlines, but not doing much for keeping a semblance of normality in check for the investing landscape.
There are so many good developments occurring regarding the improving data for Covid and the economy that gets put to the sideline when Reddit, Robinhood, and Coinbase are the center of frantic trading. Stories of some cashing in big are dwarfed by the majority that has been slighted by the volatility of 20%-30% price swings in stocks and cryptocurrencies. It makes the commodities market look tame by comparison.
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.
In any event, there are some stocks that matter big to the direction of the major indexes, and when stocks like Apple Inc. (AAPL) and Amazon.com Inc. (AMZN) are stuck in neutral, then it takes a broad collective effort on the part of many other non-FAANG stocks to do the heavy lifting. Financials, industrials, materials, energy and REITs have taken up the torch to sustain the market’s gains, but without tech leading the way, any future gains will be nominal.
The $SPY continues to trade in the range between $410 and $425. The technology stocks and reflationary stocks fluctuated between gains and losses.
The $DXY is reaching oversold levels and due for a rebound. The $TLT continues to trade higher.
Short-term the $SPY key support level is at $403-$410. The SPY overhead resistance is at $423. Even if the $SPY is able to trade above the $423 level, the market can only make incremental highs.
I would consider rebalancing the portfolio at this point to be more market neutral. I expect the second wave of the sell off to restart as early as this week or next.
Based on our models, the $SPY can pull back 10-15% from the all-time highs in the next 2-6 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 $388 and $425 for the next 2-4 weeks.
One sector that’s not waiting for the market to make up its mind is the REIT space. Not only have REITS been on fire, but they are also building more momentum as the notion of inflation-hedged income draws huge rotational fund flows out of fixed income and into assets where rents, leases, and fees tied to inflation indexes take hold.
Literally, all the REIT sub-sectors are working in bullish fashion – residential multi-family, offices, malls, logistics warehouses, cell towers, healthcare facilities, farmland, etc. It’s a wholesale move higher for the sector that doesn’t receive very much media coverage but is outperforming the other 10 market sectors on a weekly basis. Of the ETFs that trade, the Vanguard Real Estate ETF (VNQ) is the most widely followed and owned by investors. The top 10 holdings account for 45% of total assets.
Shares of VNQ have only recently cleared their pre-pandemic high in what was a surge in buying interest during the month of May.
At the moment, VNQ is technically overbought, but should be purchased on the next pullback. This is where our AI tools are best suited for investors – timing the optimal entry and exit points. Our AI-driven Forecast Toolbox has a six-month Predicted Resistance price target of $519, representing a gain of 23.8% from VNQ’s current price of $419. Identifying the target and then buying it right is how we deliver excellent returns for our RoboInvestor advisory service that is built around our AI models.
We will also look into the top holdings of bullish ETFs to zero in on individual stock picks that standout. In this case, the stock of Crown Castle International Corp. (CCI) is in full-blown rally mode, pushing up and to the right at a steep angle, trading at new all-time highs on the strength of the 5G rollout for cell tower operators.
Our AI-driven Seasonal Chart is signaling bullish price action for the next 20, 40, and 50-day periods, but clearly sees the stock nearing a consolidation phase during the next month. So, we want to have our AI platform confirm when we should add CCI to the RoboInvestor portfolio using our short-term 10-day signals.
Making precision-based buy and sell decisions regarding investing is what differentiates RoboInvestor from other newsletter advisories. Our Winning Trades Percentage is a stunning 91.30%. Better than 9 out of 10 recommendations produce profits, going back over three years.
As the market rally matures, specific stock and ETF selection are so paramount to generating steady and consistent returns. Our AI system is unrestricted, meaning it can recommend blue-chip stocks and ETFs that represent major indexes, the 11 market sectors, sub-sectors in currencies, interest rates, foreign markets, precious metals, commodities, and volatility.
There are few places our AI system can’t find opportunities to work with, which is what makes RoboInvestor so special to our members. There are always investment opportunities and our many years of dedicated work to hone an AI platform that can think freely crunch data 24/7, and produce trades with a better than 90% chance of making money is not only very gratifying, it’s doing so with minimal volatility.
Take me up on my offer to join RoboInvestor and let’s build wealth together, one day at a time, month after month, year after year. Put the power of AI to work in your portfolio – and do it today!
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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