Market perspectives from Muffett investments and sectors we are interested:
As pointed out in the weekend analysis, the market has been in consolidation for more than 2 months. In May the semiconductors were strong and peaked. Then from the middle of Junes, we are seeing the financials and the MAG7 stocks starting to show strength while the semiconductors are being distributed. Since the MAG7 and the XLF are big sectors, the all manipulation of the market down is a buying opportunity until new highs are made. This is just our own personal view.
If you watch the market closely you will notice on the downdays, IGV, MAG7, XLV and XLF are rising whereas during the up days the semiconductors are rising. What is actually happening is during the down days, the market makers are accumulating these stocks. we will illustrate in the chart below.
Since the middle of june, Nasdaq 100 has not gone anywhere but the sectors which were underperforming ( they are below the us 100 line) have started to rise. This is could an indication of subtle accumulation for the next move higher and we think that these stocks are primed for brekouts. And when the MAG7 and the Financials break out, then we can see big moves higher and the bots chasing momentum will push the market even higher.
This clearly is a risk but the US government wont be bothered as their outlook is only short term. And capital gains taxes from the stock performance mean that they are able to balance the deficit. They really need this. Although many people are looking for hyperinflation, until the very last phase, the hyperinflation will be limited to the stocks. A strategic outlook is needed to balance the risk vs the benefit of following momentum vs value and if we dont need to show performance on a quarterly basis, then we buy the stocks that are quality and showing underperformance and we wait. It is very frustrating indeed to watch the other stocks racing while yours dont. But if we stick to this the stocks will recover and the bots will chase iti. Our job is to find the quality stocks and then wait for the momentum to shift. Let the guys wiih complex algorithmic bots do the job for us.
In the members section of the website www.muffettinvestments.com, you will see the performance of the sectors and the sectors showing relative strength over others. The cost of becoming member has been kept very high to limit the number of members so that Muffett can concentrate on producing value.
You can also find a list of stocks in the Nasdaq 100 showing the most relative strength. You can see this below. And you would be surprised that the top 2 stocks here are in the IGV sector. We also have TEAM rising fast and Illumina in the biotech space showing strength. I think that soon you will see some of the MAG7 names in the list. META which we dont like will be on the list soon. If you have positive outlook then you cana look into this.
This is the Nasdaq daily chart. We aare in a range but we have ahd a purge which we have marked on the chart on the sellside. so we can expect a purge on the buyside. Equal highs have been made in advance of this. Can you see the equal highs within the range. so unless proven otherwise( price goes below the purge) at Muffett investments, we only concentrate on the longs to target the equal highs above and maybe we may even break out of the range.
For this to happen we need to see moves in the MAG 7 , XLF and IGV move up when the markets are going up. Then we know that we are going to an explosive rally.
Finally some stocks on XLF showing increasing momentum. We like blackrock, blackstone and KKR. We have added some of these stocks in the momentum portfolio
Analysis done in good raith and not investment advice.
May the Lord God Bless you and keep you in Peace.
