What the Results of the March Quarter Mean for the Direction of the June Quarter

A trader looks at a mixed financial picture

by: Chris Versace

The recently ended March quarter was one filled with all sorts of things, including harsh winter weather, political issues, the 2014 Winter Olympics, as well as weaker-than-expected guidance from a number of companies earlier in the quarter. All of that weighed on the stock market during the quarter, with most of the major market indices in the red in late January.

The market rebounded in February and March, but during the last few weeks, most of those market gains have been erased. As we closed the books on the March quarter and opened those for the June one, the Dow Jones Industrial Average was down, while both the S&P 500 and the Nasdaq Composite Index were up modestly. During this roller-coaster ride, several sectors, including housing and related industries, biotech, technology and healthcare companies, all took it on the chin.

One of the dangers individual investors face is being caught, if not trapped, in the headlines — and that often leads to paralysis.

Do I blame some of the talking heads that rain down fear or oversell bullishness? I do, but let’s remember that it is their job to attract viewers in order to drive their advertising-based business model. That means even though there is more noise than ever — broadcast and cable TV programming, the Internet, Twitter and other social media sources — you need to cull through and recognize the clear investing signal.

Along with using the recent pullback in select sectors, that’s exactly what I’ve been doing for subscribers of my investment newsletter PowerTrend Profits. My subscribers have added tactically to existing positions and entered into new ones that are poised to benefit from PowerTrends.

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As the impact of the harsh winter weather recedes, we already are seeing evidence that its effect was a temporary one. Snapshots from both Markit Economics and the Institute for Supply Management (ISM) on the domestic manufacturing economy in March painted an improved picture compared to those for February and January. Similarly, March auto and truck sales climbed compared to February, and I’d like to remind you that those sales were better in February than in January. I expect we will see the housing market rebound, as well, in the March data and strengthen further in the coming months.

Even as the economic data confirms what I have suspected, the stock market rallied this week, putting in another record level for the S&P 500. As I have shared with my subscribers, this disconnect between a new market high and improving fundamentals means you will need to be increasingly careful in making your investment decisions.

My subscribers and I will be using my PowerTrend investing lens, coupled with a food-chain approach, to make prudent investments that will generate big profits during the coming months. It goes without saying that you’ll want to sidestep the shares of companies that are being left behind. After all, picking one winning stock is great, but if you also pick up a poor investment along the way, it’s going to dilute your returns. PowerTrend investing enables us to see the winners as well as the losers.

Housing & Real Estate with United Real Estate Chairman & CEO Dan Duffy
Joining us this week is Dan Duffy, chairman and CEO of United Real Estate. We talk not only about why Dan is bullish on the housing market for the next 12-18 months, but how he and United Real Estate are using technology to transform the consumer experience and drive costs down, which is good not only for the company and its customers, but for its agents as well.

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With a strategy that is good for the customer and the agent, it’s no wonder that United Real Estate is growing by leaps and bounds in terms of markets served, number of agents and transaction volume.

Even so, Chairman and CEO Dan Duffy says they’re just getting underway. Is Dan worried about the recent winter weather and its short-term impact on the housing market? As you’ll soon hear, his answer is “not at all.”

Listen to my one-on-one conversation with
United Real Estate Chairman & CEO Dan Duffy

In case you missed it, I encourage you to read my PowerTrend Brief from last week about why cashless consumption is getting more important. I also invite you to comment in the space provided below.

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In advance of tomorrow's release of the government's monthly jobs report, stocks fell today, led by consumer and technology shares.

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