Monday, April 9, 2018: Stock Market Rebounds, Trade War Talks Ease







Down on Friday, Up on Monday?

Here’s an interesting thought. I’ve noticed several times that the markets usually tank on Friday, then rebound on Monday. I don’t know if this would be a good strategy or not, but it’s worth following to see if this Down-Friday-Up-Monday continues to occur.

For those trading stocks on a more short term basis as in Swing Trading, it’s important to look at patterns in the stock market, as well as those stocks bucking the trend.

In 2018, we’ve seen a total contrast to the gentle uptrends of 2017, with plenty of volatility in day-to-day shifts, to week-to-week shifts of up and down movements.

It’s difficult to buy-on-the-dips because the markets are still downtrending, and have been since Trump’s SOTU address in late January 2018.

We’ve seen times when the NASDAQ and the S&P 500 have been in the negative for the year (YTD).

In summary, we’re in some choppy waters right now, so it’s best to tread water carefully.

My Portfolio Strategy?

  • Hold Onto Winners: My current strategy is to hold on to the big winners in the portfolio, which for me is BA, CAT, ISRG and RTN. Once the markets truly bounce back, these stocks will push upward to new highs. These are great companies, so there’s no reason to think they will totally fail.
  • Hold Onto Cash! It’s important to keep as much cash as possible when the going gets tough. And this puts money aside to sit on the sidelines. I know most portfolio managers will tell you that there’s too much cash drag on the portfolio if you have too much cash on the sidelines. But, in a volatile stock market, I think this is a smart move. Definitely don’t risk it all, and keep cash available for when the markets begin to truly rebound.
  • Do A Little Swing Trading. Although I keep this to a minimum right now because the markets are tricky. With Trump pushing his Trade Wars agenda, and all sorts of negative news affecting the stock market, I have been very careful, although I’m sitting on some losses from my Swing Trading attempts. Once again, it’s safer to sit it out. If anything, losses are only paper losses and not real losses until you sell for a loss. Like Warren Buffett has repeated, you have to hold for the long run and let the losses smooth out.

This Morning’s Watch List

I’ve been looking at stocks that are bucking the trend, and for the most part, on a general uptrend when viewing the 1 year charts. These stocks include: EL, BZUN, STOR and RTN

Estée Lauder (EL)
finviz dynamic chart for  EL
Baozun (BZUN)
finviz dynamic chart for  BZUN
Humana (HUM)
finviz dynamic chart for  HUM
Raytheon (RTN)
finviz dynamic chart for  RTN

Disclaimer: The content provided here is for information and entertainment purposes only. It’s not intended as an offer or solicitation to purchase any investment. And this material should not be taken as investment advice. Investing in equities is subject to extreme volatility.
Trade at your own risk.

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Carlos Rull

Carlos Rull is a musician living in the San Diego area. His interests include Yoga, Eastern Philosophy, Zen Buddhism, and Gardening. He plays drums, piano, and composes New Age & Ambient music, and his albums are available on iTunes and Amazon.com.

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