Revenge of the Turds
Suddenly, stock market laggards are leaders
Sungarden Live! 2 Upcoming Sessions.
Wow, Monday’s live session on YARP dividend investing was great. At least it was for me, since I truly enjoy the opportunity to speak live to our subscribers. We covered dividend investing (my approach to it), current market conditions and I put out a few updates on where we aim to head with the 2 services we offer, ETFYourself.com and SungardenInvestment.com.
As you can see below, there’s another live session tomorrow, and we have another one in a couple of weeks. Just click on the link to sign up for to each one you plan to attend. As we did yesterday, I’ll cover the suddenly fast-breaking market conditions as well as doing a primer on my “meat and potatoes” approach to options.
These events are free for all ETFYourself.com and SungardenInvestment.com subscribers, but you do need to register in advance. See you on Zoom soon!
Date, time and Focus Topic
all times Eastern US; Click the topic to register
Wednesday, July 17 at 12PM: Using options to protect and grow
Tuesday, July 30 at 4PM: Technical analysis - the market’s “story”
This week’s commentary
I showed this chart last week, and commented that:
To me, this is still a market where ROAR (return opportunity and risk) favor controlling the latter, because the upside, while always there, comes with a bit too much baggage for me to be more than short-term excited (at best).
Now, here’s what that same chart looks like at today’s close:
That, my friends, is a technical breakout. But this one is more vivid, and is one of several I see occurring now. The charts above showed that the “average stock” with the S&P 500 (portrayed by ETF symbol RSP) is pointing toward busting upward.
The one below is DIA, which tracks the Dow Jones Industrial Average. That chart is a daily version, so it zeroes in more than the weeklies of the RSP above. In the DIA below, the past few days, and especially today, would normally indicate that something good is happening. And so that’s how I will play it.
But for now, the parts of the market that were performing like “dung” are suddenly the market leaders, while QQQ struggles a bit. You might remember “Revenge of the Nerds”, a very funny movie.
This is the market’s version of when the weak suddenly become the mighty. Or as I have referred to it in the past, revenge of the turds.
Importantly, this is the signal so many have been waiting for: that the rest of the market starts to levitate, not only the Magnificent 7 stocks and selected others. But as I will discuss in the premium section below, even when it starts to get “exciting” in the stock market, risk-management is always my priority.
To that end, I will share with subscribers below what I see in different parts of the market, and in a “special section” today, I’ll comment a bit on how I am using options and even leveraged ETFs to try to exploit this likely temporary burst higher in stocks, while managing risk at every step.
The latter part of that balancing act is where I have seen so many self-directed investors go from “I can quit my job and trade for a living!” to “I am never investing in stocks again, the market is rigged!”
We will talk about this in tomorrow’s free live session, which focuses on options but as attendees will see, I don’t use them in isolation. They are just another type of tool in the tool box. And right now, they are the shiniest tool in the shed.