The Trump Rally Continues

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Markets continued to rise across the board this week, with the Dow Jones up 0.53%, the S&P 500 gaining 1.03% and the NASDAQ jumping 2.10%. The MSCI Emerging Markets Index also recovered 1.34%.

Big gainers in your Alpha Investor Letter portfolio included NVIDIA Corporation (NVDA), which moved 8.66% higher; Home Depot (HD), which jumped 5.29%; Albemarle Corporation (ALB), which gained 5.22%; and Liberty Broadband Corp. (LBRDK), which rose 4.16%.

Several positions moved back above their 50-day moving averages and changed to a Buy. These included First Trust US IPO ETF (FPX), Home Depot (HD), Albemarle Corporation (ALB) and Liberty Broadband Corp. (LBRDK).

Four positions hit new 52-week highs: Berkshire Hathaway (BRK-B), Vanguard Russell 2000 Index ETF (VTWO), Guggenheim S&P 500 Equal Weight ETF (RSP) and the Guggenheim Spin-Off (CSD).

What a difference a month makes.

In late October, the world had taken a Hillary Clinton U.S. presidential victory for granted, and pretty much expected the U.S. economy and stock market to muddle along sideways as it has for the recent half decade.

It took a surprise win in the presidential race by Donald Trump to shift the market’s mindset to full-on bullish mode.

Fast forward a month, and all of the most popular market indexes — the Dow Jones, S&P 500 and NASDAQ — each hit new all-time highs in the past week.

That said, the market has been schizophrenic. On several occasions in the past week, the market recorded as many 52-week lows as it did 52-week highs.

That’s because U.S. small-cap, banking and energy names have soared, while previously strong U.S. technology and emerging market stocks have pulled back sharply. That’s why you see positions like Berkshire Hathaway (BRK-B), Vanguard Russell 2000 Index ETF (VTWO), Philips 66 (PSX) and Guggenheim Spin-Off (CSD) rallying sharply, while previous tech and biotech high flyers like Intuitive Surgical (ISRG) and the iShares Exponential Technologies ETF (XT) lag by way of comparison.

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This is rather sudden sector rotation that has caught many investors flat-footed. I expect this shift to be temporary and for previous technology and biotech names to soon regain their footing.

Finally, I want to wish you and your family a happy Thanksgiving holiday. My parents have just flown across the Atlantic Ocean to celebrate their first Thanksgiving with their grandson, Victor, in what will surely be a memorable occasion.

Portfolio Update

Berkshire Hathaway (BRK-B) added 0.76% last week. Warren Buffett has a sizable position in Wells Fargo bank. Despite all of its recent troubles with unauthorized accounts, Mr. Buffett has held on to all of his shares. With the drumbeat of higher rates (possibly coming next month) and a pro-growth President-elect Trump, the financial sector has been super-charged over the past few weeks. Looking at a Wells Fargo chart, this stock has not only fully recovered from previous events, but just recently broke above its long-stubborn $151.00 price level. BRK-B is a BUY.

Vanguard Russell 2000 Index ETF (VTWO) rose 2.43% last week, more than doubling the S&P 500’s 1.03% rise. I’ve been recommending small caps in one of my other trading services, Bull Market Alert, and their performance has been quite strong. Typically one of the first horses out of the gate when markets turn bullish, small caps are a must-have holding in any portfolio — especially over the long term. VTWO is a BUY.

Guggenheim S&P 500 Equal Weight ETF (RSP) rose 0.95%. The most popular market indexes, including the Dow Jones, S&P 500 and NASDAQ each hit new all-time highs. Not surprisingly, RSP followed in its big brother’s footsteps, also hitting a new 52-week and all-time high. RSP is a BUY.

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Guggenheim Spin-Off (CSD) moved 1.08% higher over the past five trading days to hit a new 52-week high. CSD is a position that capitalizes on the action of spinning-off corporate entities. With most stocks rallying over the past weeks, it is no surprise that CSD would follow suit, as any company looking to divest itself of a business unit is more likely to do so during bullish times. CSD is a BUY.

PureFunds ISE Cyber Security ETF (HACK) traded nearly level last week, dipping just 0.43%. Data security is a never-ending and serious risk. Just ask Hillary Clinton about WikiLeaks and its effect on her presidential run. The online dating site FriendFinder also just revealed that more than 400 million user accounts were hacked — the largest breach ever reported. HACK is a BUY.

Home Depot (HD) jumped 5.29% last week as trading volatility continued to swirl around this home improvement name. Home sales figures jumped 2% last month to hit their highest levels since 2007. However, with an interest rate decision looming in December, buyers are seeing the writing on the wall and making last-minute home purchases before mortgages get more expensive. HD moved above the 50-day moving average last week and is now a BUY.

NVIDIA Corporation (NVDA) roared 8.66% higher last week to hit yet another 52-week and all-time high. By all measures, your NVDA position appears to be on track to deliver you a double-bagger for Christmas. A “double-bagger” is trader-speak for a 100% gain in a position. Remarkably, this has occurred in just five months’ time. With the fourth and first quarters historically strong, NVIDIA could be the gift that truly keeps on giving into 2017. NVDA is a BUY.

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