Weekly Perspectives August 30, 2020 – Firing On All Cylinders 🏎️ 🚀

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Weekly Perspectives August 30, 2020 – Firing On All Cylinders 🏎️ 🚀

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Here is your weekly newsletter — perspectives on trading and financial markets.

Click here for the previous edition.    

 

Firing On All Cylinders 

Last week’s newsletter was titled, “Enjoy The Bull Market”, and as we enter into the final trading day of the month, the markets now appear to be firing on all cylinders.

It’s hard not to sound like a broken record but week in and week out the buyers have stepped up and bought each and every dip and we have now seen 5 consecutive months of higher high in the QQQ’s and 4 consecutive months of higher highs in the SPY.

Said another way each and every dip has been buyable for the past 5 months.

The markets are clearly trending to the upside and unless we see a major shift in the current market narrative it would be hard not to see higher prices for the remainder of the quarter.

In other words, the sellers have a lot of work to do to turn the current trend around. 
As the old adage says, “the trend is your friend until the end”.

The understanding of this means having the fortitude to stay with the course of the trend and having the courage to give back profits at the end of the trend and getting out only when the markets tell you to get out and not because of biased beliefs or prejudices.

In this week’s video I discuss:

  • The earnings calendar and economic calendar for the upcoming week
  • Why this past week’s weak jobless claims # was good for the markets
  • Playing small and trading scared
  • The VXX trade on Thursday and putting together pieces between price action, timeframes, and market structure
  • Trade ideas for the coming week


Now watch this week’s Weekly Outlook video to see the setups and levels we’ll be watching as well as the technical outlook for the VXX SPY QQQ IWM DIA EEM TSX TLT GLD MGC BTCUSD EEM and more for the week of Weekly Market Outlook For August 31 – September 4, 2020.

Feel free to drop any questions into the comments and hit the subscribe button to receive notices of our weekly market analysis videos.

 

The Difference Between Amateurs and Professionals

I came across this article several years ago but it has got to be one of my favorites around the different mindset between amateurs and pros.  

There are a host of other differences, but they can effectively be boiled down to two things: fear and reality. Amateurs believe that the world should work the way they want it to. Professionals realize that they have to work with the world as they find it.

 

These Stocks Have the Most Concentrated Hedge Fund Ownership

Interesting article from II naming the 10 beaten stocks that have the most institutional ownership and why it matters. 

Goldman recently pointed out in a report that since 2001, the strategy of buying the 20 S&P 500 stocks with the most concentrated hedge fund ownership has outperformed the broad index in 61 percent of quarters, with an average quarterly excess return of 155 basis points, or 1.5 percent, per quarter. 

Here they are in order of institutional ownership:

  1. LB
  2. EXPE
  3. TDG
  4. UAA
  5. XRX
  6. INCY
  7. TIF
  8. HLT
  9. LKQ
  10. NLSN

 

Blockchain, the amazing solution for almost nothing.

I’m somewhat of a Bitcoin maximalist.  

It’s my opinion that given enough time probably 80% of crypto/blockchain projects will fail.  

Blockchain technology is an amazing innovation however to this day blockchain remains a solution in search of a problem.

 

Trump’s ‘Very Good Track Record of Hiring Excellent People’ 

I am not American nor am I interested in politics so take this bit of humour for what it is.  



Source:  Daily Beast

 

Stay strong, and happy trading!

Houston

PS – Were you forwarded this email? Subscribe here.

PPS – Don’t forget to join us on our Facebook Group and exchange trading ideas between meet-ups – https://www.facebook.com/groups/montrealtraders/

 

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Weekly Perspectives August 30, 2020 – Firing On All Cylinders 🏎️ 🚀

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