Weekly Update (6/5/2017)

Memorial Week Surprise

The week started out with a bleak, slow grind downward in all the indices. This is pretty typical during the week of Memorial Day, as many market participants are out of the office and not deploying capital. During the dip, we noticed spikes in put option buying (people buying insurance for their portfolio), which is a key indicator that the market has more room to run up. Market tops tend to happen when investors get over-eager to buy these dips, not buy insurance; put-buying is actually an indicator of a market bottom. On Wednesday, all the big players came back from vacation just in time to send us to new highs.

This market action is in line with what we have been saying about the market moving higher, despite record outflows of funds. All the major economic news outlets are telling investors to move money from the U.S. to Europe and emerging markets when all the real action is happening here in the homeland. 

Enjoy the ride for now, but be wary of when this institutional money comes flowing back into the market with a serious case of FOMO. We'll keep you posted when we see any important metrics spike.

It's also worth noting how recent news regarding the Trump administration and various terror threats around the world have failed to shake up market sentiment significantly. Don't let click-baity media companies steal your focus from the data.

Short Term

With current market conditions, our focus is to identify trending stocks, and jump on when there is a quick dip or pause in the trend. These kind of bull markets have a hard time stopping for anyone, so we're here to help guide you through the noise.

What to Watch: 


In the last week, we've initiated some short term trades in CMG, AAPL, BZUN, GPRO, AMD, and ELF. 

 We picked up AAPL during this breakout and see potential for it to trade up to new highs from here.

We picked up AAPL during this breakout and see potential for it to trade up to new highs from here.

 CMG showing signs of a potential breakout in the next week.

CMG showing signs of a potential breakout in the next week.

Long Term

Energy:


We've talked about this before, but it's worth reiterating. Every energy chart that we look at is undeniable: oil as a long term investment is a win right now.

We like CHK as a play, but you can't go wrong buying an index like XLE.

 CHK is trading at the bottom of a range in a huge consolidation pattern over the last year.

CHK is trading at the bottom of a range in a huge consolidation pattern over the last year.

Industrials:


Industrials continue to coil up and get more and more appetizing every week. Commodities like copper and steel are close to bottoming; we see very little downside and possibly explosive upside in this sector.

Additionally, any new import taxes or trade embargoes imposed by the Trump administration could help this sector reach new highs.

Some of the classics here are AKS, X, FCX, and CLF.

 FCX is sitting at support levels near a multi-year low. Hard to not add this to your portfolio for the long term.

FCX is sitting at support levels near a multi-year low. Hard to not add this to your portfolio for the long term.

Happy Trading,

- The Minotaur Team