Markets Digest the Trump Rally

Nicholas Vardy

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

U.S. stock markets treaded water this week, with the S&P 500 up 0.08%, the Dow Jones rising 0.51% and the Nasdaq pulling back 0.12%.

After the recent strong Donald Trump-inspired rally in the markets, a couple of warning signs are flashing yellow, if not red.

First, market sentiment has reached risky levels. The CNN Fear and Greed Index is firmly in “greed” territory. As a contrary indicator, this is negative.

Second,’s spread between “Smart Money Confidence” and “Dumb Money Confidence” has hit a level that has consistently led to subpar returns in stocks over the short- to medium-term.

Some weakness in the markets is already bubbling up. Small-cap stocks, as measured by the Russell 2000, finally ended their streak after a string of 15 positive days — one of the longest streaks in its history.

Surprisingly, similar positive performance by small-caps did not signal a sharp pullback for the sector in the past. In fact, over the course of the next month, small-caps tended to shine.

Overall, it is worth emphasizing that we are in the middle of what is almost always the best six months of the market, between Nov. 1 and May 1.

Combine that with the fact that the seven-quarter earnings recession in the S&P 500 is about to end, and it seems the bears are in the backseat for now.

Portfolio Update

Starting this week, I am changing the format of the weekly Alpha Investor Letter portfolio update section.

This new format — in the form of a table — provides you with an improved overview of the weekly performance of your Alpha Investor Letter recommendations.

Exclusive  Five Stocks to Purchase for Double-Digit-Percentage Dividend Increases

In column 1, you will find the latest closing price of your position (“Last”).

In column 2, you will find your position’s performance over the previous five trading days (“5D % Chg”).

In column 3, you will see whether your position is above or below its current 50-day moving average (“50D MA”).

Recall that the general rule of thumb in the Alpha Investor Letter is that a position is a BUY if it is trading above its 50-day moving average  and is highlighted in GREEN.

A position is a HOLD if it has dropped below the 50 day moving average and is highlighted in RED.

Finally, in column 4, I am including your positions’ performance over the past month. (“1M %Chg”).

Click here to view the Portfolio Update table.


Nicholas Vardy

Nicholas A. Vardy

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