BENNETT S MARKET MINUTES

Transcription

1 Godel Trades LLC Volume 8, Edition 2 08/12/2018 BENNETT S MARKET MINUTES S&P 500 Overviewsdfjksdjfskdlsdfsdsfsdfjsdlkfjlfkjsdllk Last week the markets established a support base nearing the all-time highs previously established in January, however after a period of consolidation ended up following our corrective wave targets into the 2826 levels prior to the close of trading on Friday. We are still tracking two valid counts for the S&P 500, one which shows the highs for the year have already been established, and we are heading into a further correction, and another that shows a clear path to the 3,000 level prior to the end of December. We have many potential market catalysts ahead that should offer insight as to where the counts stand and expect clear validation one way or the other heading into or following the September FOMC meeting. I ll be keeping my eyes on potential sector rotations as we continue to see mixed sentiment in the technology sector (which has accounted for the majority of market gains). A bull-market consists of Financials, Technology, Consumer Discretionary and Consumer Staples. Those are sectors you must continue to focus on while we test key levels in the indexes. More recently we ve seen broader market strength with support in non-traditionally leading sectors, which could help further solidify our bullish chart count which supports a move to 3,000 in the S&P this year. Tariffs & Outlook sdfsdfdsfsddfsdfsdfsdfsdfsdfsdfsdfs Tariff concerns, trade negotiations and retaliations continue to impact short-term movements in the markets, sectors and individual stocks. Recently we saw Whirlpool take a heavy hit, down over -14% following earnings. In addition, investors in Caterpillar continue to express concerns over future tariff impacts which is reflected in the stocks movements, even following a very strong quarter posted on July 23 rd. I believe the final result will be benefit our country, however the path to clearly defined trade policies will likely be a bumpy and volatile road. Keep your eyes peeled on potential changes to the Emerald fund moving forward depending on trade negotiations. August FOMC Standings ddfsdfsdffsdfsdfsdfdf The feds opted to leave rates unchanged during the annual August meeting, which was as expected. The market is pricing in an 85% change of a rate hike at the September meeting, which will be a live news conference. The August fed meeting was the last closed-door meeting under current Fed Chair Jerome Powell. We ll be looking to see how the change to a press conference at every meeting might impact the structuring moving forward. Rate hikes will continue to be an area of great focus for investors, and I expect 2 additional rate hikes this year, with at least 2 in Keep your eyes on the DOT plot and how potential further tariff impacts might factor into the Feds outlook. Recently President Donald Trump criticized the fed for the rate hikes, which in my opinion is simply a ploy to artificially manipulate rates. We did see a reaction in the 2/10 spread following his remarks, however I don t anticipate his comments impacting the Feds decisions. Our next FOMC meeting will be held on September 25 th and 26 th. Key metrics to keep your eye on includes the DOT plot, and how the Feds opt to factor in tariff concerns. Market Outlook sdfsdfsdfsdfsdfsdfsdfsdfsdfsdfsdfsdfsdfs As we continue to trade over the 2800 mark in the S&P, I ll be favoring the bullish chart count which shows us targeting the 3000-point level prior to the end of the year. In addition, our Nasdaq 100 chart count also supports a significant move higher, which helps validate our S&P 500 sentiment and targets. More to come here once we have validation. 2/10 Spread & The Yield Curve dfsdfsdfsdfsdfsdfsdf. I ll be keeping my eyes on the 2s, 5s and 10s moving forward as we evaluate economic growth and market strength. We ve seen a jump in retail sales, exports and consumer spending, however investors appear to remain skeptical that this increase in growth is sustainable as longer-dated yields begin to once again fall. Many economists are anticipating a recession to take place in late 2019 or early 2020, and given our current yield curve, interest rate environment, tariff concerns and inflation risks, I believe it to be a very strong possibility. Typically, we see a re-steepening of the yield curve prior to it returning flat and inverting, which usually precedes a recession by approximately 1 year.

2 Page 2 Bennett s Market Minutes Volume 8, Edition 2 Events on watch All times AM & EDT unless otherwise noted Monday Tuesday Wednesday Thursday Friday Survey of Consumer Expectations 11:00 NFB Small Business Index 6:00 Import Price Index Retail Sales Unit Labor Costs (Q2) Productivity Weekly Bill Settlement Weekly Jobless Claims Housing Stats Consumer Sentiment 10:00 Leading Economic Indicators 10:00 Industrial Production 9:15 Business Inventories 10:00 Philadelphia Fed Index Earnings Watch Home Depot sdfsdfsdfsdfsdfsdfsdfsdfs This week we have The Home Depot reporting earnings on Tuesday before the market open. We ve been consolidating near the daily 50 moving average and expect either a break towards the previous all-time highs, or a move back down to test the daily 200 moving average support. I have yet to work-up a current earnings model with projections on the reporting quarter, however I m planning on leaving exposure to $HD in the Emerald Fund until otherwise noted. Look for a potential change here only if we see vastly different metrics than expected. Given the significant gains we ve already accumulated from our August 2017 entry in Home Depot, I may look to book partial profits if I feel a change in sentiment for this company is underway, or analyst expectations are a miss. Current implied move for the week as of the close on Friday was $8.22. This week s earnings watchlist: sdfsdfsdfsfsdfsdsdfsdfs HD, CSCO, NVDA, JCP, WMT, DE Cisco sdfsdfsdfsdfsdfsdfsdfsdfsdfsd This is one of four stocks on all three major indexes (Nasdaq, Dow Jones & the S&P 500). The others include Intel, Apple and Microsoft. We ve seen some very mixed sentiment here reflected in the stock value as competition continues to grow in the space, with Amazon even announcing plans to enter the router & network infrastructure hardware space. I feel Cisco will remain a key player while maintaining significant exposure in the industry. There is far too much preexisting Cisco infrastructure, and I feel a shift away from their products would be a far-fetched possibility. Current implied move for the week as of the close on Friday was $2.03 into August 17 th. Nvidia sdfsdfsdfsdfsdfsdfsdfsdfsdfsdfs This will remain one of my top-investments for chipmakers heading into Although I ve liquidated my exposure in both the Emerald and Growth fund portfolios, I will absolutely be looking to put on a position later this month or early next month once sentiment in the sector is further established and earnings are released. Expected move is $16.43.

3 Page 3 Bennett s Market Minutes Volume 8, Edition 2 Nasdaq 100 Date Symbol Timeframe 8/12/18 NDX Daily Support Resistance Targets 7160, 7320, ( ) +(7549) Summary We are currently in the process of finishing our 2 nd wave primary degree correction. Our price targets for blue wave (3) were met, coming just shy of the forecasted level. Following that, we saw a beautiful 38.2% retracement in wave (4) of the advance seen in wave (3). Elliott Wave Theory combined with Fibonacci studies is our preferred method of technical analysis, and unlike traditional price-action indicators that are lagging, this form of technical analysis is forward-looking and helps you target key levels in the indexes while developing significant context as to the market health and potential. We ll continue to keep our eyes on the Technology components here (majority of the Nasdaq 100) following a major corrective move seen in Netflix and Facebook after earnings. Now, the key question among analysts included the possibility of our orange circle primary degree wave 1 sequence being the entirety of the overall 5 wave move, which would complete a much longer-term sequence and support the likelihood of further downside in the markets this year. Either way, even if we are tracking the count accurately with our current 5 wave move being of the intermediate degree, once both the S&P 500 and the Nasdaq 100 completes the projected cycle, we ll be in for some serious retracements to the downside which coincides with the economist who are forecasting a recession given our current yield curve standings, interest rate environment, tariff and trade negotiations, etc... Don t forget to visit the subscriber Portal on the website for potential updates during the week!

4 Page 4 Bennett s Market Minutes Volume 8, Edition 2 S&P 500 Date Symbol Timeframe 8/12/18 SPX Daily Support Resistance Targets 2804, , (2800) +(2898) Summary Above is our current bullish chart count reflecting the path to 3,000 in the S&P 500. For those of you who have been trading with us under our full-service subscription, you ll see we advised this count early in the week in our Chart Center anticipating the move down to the level. Typically speaking a wave 2 correction is steep, retracing as much as 78.6% of the previous wave 1 move (minor degree, green wave 1 in this example). W ended up breaking our initial target of the 38.2% retracement at 2836 (advised as a minimum corrective target for Friday last week) and ended up finding support *just* over the 61.8% retracement (another typical wave 2 corrective target). We also maintain an addition bullish count, with a slightly different structure, however it also reflects the move towards 3k. Moving forward, and unless otherwise noted I ll be looking for a move into green minor degree wave 3, with a price target just shy of 2900 into Septembers FOMC meeting. Once we have confirmation of both counts, I ll be looking to compile my newsletter portfolios. With the NDX and SPX reflecting two very different short-term chart configurations, it supports the possibility of sector rotation out of the usual tech names and into more diversified stocks and ETFs in August. During the January highs, 38% of the S&P 500 component were at or near all time highs, while this last week only 4% were!

5 Page 5 Bennett s Market Minutes Volume 8, Edition 2 S&P 500 Sector Overview Sector Market Cap 1-Year % Change Consumer Discretionary $5.83 T % Consumer Staples $3.25 T -3.95% Energy $3.96 T % Financials $7.56 T % Health Care $5.50T % Industrials $4.21 T +7.62% Information Technology $9.79 T % Materials $2.09 T +8.34% Real Estate $1.22 T +1.37% Telecommunication Services $1.71 T -4.70% Utilities $1.23 T -1.73% S&P 500 Index % Year % Change

6 Page 6 Bennett s Market Minutes Volume 8, Edition 2 S&P % Of Large Caps Stocks Over Key Moving Averages Sector 50 Day 100 Day 200 Day Consumer Discretionary 50.00% 52.50% 56.25% Consumer Staples 78.12% 53.12% 40.62% Energy 41.93% 64.51% 64.51% Financials 45.58% 44.11% 50.00% Health Care 71.42% 76.19% 69.84% Industrials 67.14% 58.57% 62.85% Information Technology 65.33% 66.66% 72.00% Materials 45.83% 33.33% 29.16% Real Estate 66.66% 90.90% 78.78% Telecommunication Services 65.21% 73.91% 73.19% Utilities 89.65% 93.10% 79.31% S&P 500 Index 61.18% 61.98% 61.38% % Of Large Caps Over Key Moving Averages Sector 50 Day 100 Day 200 Day Dow Industrials 73.33% 63.33% 56.66% Dow Transportations 60.00% 70.00% 70.00% Dow Utilities 86.66% 93.33% 73.33% Dow Composite 72.30% 72.30% 64.61% Nasdaq % 63.10% 73.33% Russel % 62.09% 63.29%

7 Page 7 Bennett s Market Minutes Volume 8, Edition 2 Newsletter Portfolio Standings Emerald Fund Ticker Entry Date Entry Price Exit Date Exit Price % P/L Qty AMZN 09/26/ /19/18 1, % 2 ABBV 08/18/ /19/ % 2 AAPL 09/25/ % 2 BKNG 08/11/17 1, % 2 BRK.B 08/11/ % 2 CAT 08/11/ % 2 COST 08/11/ % 2 DIS 09/26/ % 2 FDX 09/26/ % 2 GOOGL 08/21/ % 2 GS 08/11/ % 2 HD 08/21/ % 2 HON 08/21/ % 2 JPM 08/11/ % 2 MCD 09/27/ % 2 MSFT 08/11/ % 2 NVDA 08/11/ /19/ % 2 SCHB 08/21/ % 2 WMT 09/26/ % 2 V 08/11/ % 3 VTI 08/29/ % 2 VXUS 08/29/ % 2 VGT 08/29/ % 2 Current Standings: %

8 Page 8 Bennett s Market Minutes Volume 8, Edition 2 Newsletter Portfolio Standings Growth Fund Ticker Entry Date Entry Price Exit Date Exit Price % P/L Qty AMZN 09/26/ /19/18 1, % 2 AAPL 09/25/ /19/ % 2 ADBE 08/11/ /19/ % 2 BABA 08/11/ /19/ % 2 FB 08/21/ /19/ % 2 GOOGL 08/21/ /19/18 1, % 2 INTC 08/21/ /19/ % 2 MU 08/11/ /19/ % 2 NFLX 08/28/ /19/ % 2 NVDA 08/11/ /19/ % 2 Total Returns P/L: 63.27% Portfolio Notes The Growth Fund portfolio was liquidated in its entirety to secure the incredible returns we saw during that 11-month exposure window. Expecting further upside in most of these names, however given the very mixed market sentiment and sector rotations, I felt it was imperative to secure profits on the exposure here. Being as the Growth Fund for the year was highly concentrated around primarily one sector, combined with the fact we ve seen heavy outflows in the sector lead me to secure profits here and close the portfolio all together. Look for our Growth Fund soon! A few of the stocks liquidated in the Growth Fund remain in the Emerald Fund, mostly due to the highly-diverse nature of the Emerald Fund. In the event we see our bearish chart counts take precedence, I ll be looking to set a fixed 30% P/L stop on the Growth Fund. Pending Positions (Still conducting due diligence, look for an overview of each company in next weeks newsletter) $IQ, $SQ, $DE, $CRM, $ABMD, $NKTR, $SGMO Please visit our Subscriber Portal or Portfolio Room on the Platform for real-time updates!

9 Page 9 Bennett s Market Minutes Volume 8, Edition 2 Week of 8/06/18 Alert Performance Overview Number of Alerts Winning Trades Accuracy % Average Winner Average Loser Average Return 235% 36% % Week of 8/06/18 Alert Recap 70% Accuracy, % Avg. Return Monday August 6th, 2018 No Trades Tuesday August 7th, 2018 L4 BTO NFLX 10 AUG (Swing Trade) L4 BTO AAPL 10 AUG (Day Trade) 140% 56% Wednesday August 8th, 2018 L3 BTO FB 10 AUG (Swing Trade) L3 BTO GOOGL 17 AUG (Swing Trade) L3 BTO CAT 10 AUG (Day Trade) /CL Crude Oil (Day Trade) 30% 57% 22% 18% Thursday August 9th, 2018 L3 BTO AMZN 10 AUG (Swing Trade) L3 BTO AMZN 10 AUG (Day Trade) 1,039% 28% Friday August 10th, 2018 L3 BTO FB 10 AUG (Swing Trade) L4 BTO CAT 10 AUG (Day Trade) 307% 60%

10 Page 10 Bennett s Market Minutes Volume 8, Edition 2 DISCLAIMER We are not financial advisors, and this is not financial advice. Our services are intended for informational purposes only. Consult with a licensed investment or financial advisor before making any investment decisions. We do not advise you follow our trades, instead use them to analyze potential movements in the market. See our terms of service for more information. We accept no responsibility for your use of the information provided to you. Your continued use and access to the Godel Trades LLC site and services constitutes your agreement to and compliance with the terms of service provided to you upon subscription and outlined on our company website at Users of this service acknowledge that all information presented is solely for informational and educational purposes, and not intended to be used for personalized investment recommendations. Our results are only indicative of the profit potential. Furthermore, users acknowledge that there may be a delay between trade alerts and our trade execution. By accepting our services users acknowledge that 'Godel Trades LLC is not registered as an investment adviser. Thank you once again for being a subscriber of Godel Trades! Follow us on -Bennett Tindle Founder, Market Analyst Godel Trades LLC