Stock market starts off October on the right foot. It recorded another new high. The climb is due to many reasons such as strong economic reports and GOP’s proposed tax overhauls. The impact from the Las Vegas shooting that involved hundreds of lives didn’t deter the market. Most of the indexes stayed green and gave more than 1% return.
The stock market showed super strength for the week. The ETFs for the market indexes displayed more than 1% gain. Micro cap ETF, IWC remains the leader with a gain of 1.98%. Even the worst performer, SPY isn't doing shabby either. It gave 1.25% for the week.
For 2017, technology-driven ETF, QQQ screams a strong return of 24.63%. The strongest amongst the six market indexes above. Could this year give double digit returns for all of them? We're at the start of Q4, a period where the bull tends to pick up its momentum run.
Based on the daily charts above, all of them are in an uptrend. Mid-cap MDY, Micro-cap IWC and Russell 2000, IWM seem to be resting and digesting their recent price movements.
It's too early to tell how SPY and DIA are behaving. For now, they're doing just fine with seven consecutive days of uptrend.
QQQ has more room to climb higher. It just broke from the old-high set in the early September 2017.
As for the US sectors, only XLU (utilities) and XLP (consumer staples) are showing persistent weakness relative to other seven counterparts.
XLY (consumer discretionary) and XLV (healthcare) are preparing to propel themselves higher next week. They might meet some resistance as they meet their old highs on late July.
XLE (energy) is taking a break after a strong price climb that began mid-August.
XLK (technology), XLF (financial), XLI (industrial) and XLB (material) continue to run higher. Only time will tell when their upward momentum will slow down.
Here's my current stock portfolio. A quick glance on their daily charts show than AVX, GENC, VRNS, SYX, APPF and RNG (in order of gain strength) are still marching upwards. POWI and OLED continues to move sideways in a range. Most probably, they are consolidating after their price plunge in late July and mid-Sept respectively. Click here to see my portfolio performance in numerical format.
Here are my picks for stocks to watch for next week:
Look at this Fear & Greed Index! I bet that there're two school of thoughts about the image above.
The investors are feeling euphoric and bullish with the current market condition. And this is clearly seen from the indicator pointing at 92. It's another jump from last week's score of 85. Who wouldn't be happy when there was a big concern about the performance of the stock market just a month ago. And it's reflected in the marginal score of 41.
However, the contrarian camp would say the opposite. Warren Buffett used to say 'Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.' His quote is spot on. How long can the market run-up continue? At a score of 92, it should raise concern for the bearish investors. They should be planning to short the market if this greed sentiment stays this way.
The bulls continue to push the market to propel higher. This strong rally spilled many stocks to break out from its buy point.
My advice for latecomers is not to chase the extended market. The cost to be in the current market is too high. It's best to wait for pullbacks that is overdue.
So if the market retracement does happen, be ready to keep your powders dry. And grab quality stocks when the opportunity appears.
And when that moment occurs, go greedy. Also, it's a tradition for the market to head higher from October until early January.
The consensus from top traders and investors are as follow:
"The action remains picture perfect as the great mini-rotation remains alive and well. Until heavy selling is crystal clear, the bulls deserve the benefit of the doubt. In a strong bull market like now, you should buy weakness should and, not sell them."