alice

NFTRH; A Massive Boom in One Key Segment, Plus Market Notes and Stock Discussion

In the weekend report we noted that the SEMI Equipment book-to-bill data release was due on the 24th.  The report is out and it is, regrettably, the last one they will be publishing.  It is also a home run of a report, with both bookings and billings up big and a 3 month uptrend established in the key ‘bookings’ data.  Full report here.

semi

So the previous downtrend in this cyclical indicator has been replaced by a new uptrend and that is the information we’ll go with.  I still find the sector over done, although there could be individual opportunities here and there.  Personally, I am keeping an eye on Silicon Motion, as usual.  That’s a fabless chip maker, though the data above pertain to the likes of Applied Materials, Lam Research and other equipment companies.  But the health of the sector as a whole appears a-okay because the equipment guys are booking orders from the chip guys.

Per a subscriber’s request, here is a daily view of the PALL-Gold ratio, showing a lack of excitement.  This is the indicator we have used along with the SEMI data to project firm or weakening future economic signals.  This is flopping the day after SEMI knocked it out of the park.  This market sure does not make things easy, does it?  There will be disparities on any given day or week, but the trend is up in SEMI and per the weekly chart reviewed each week it is also still up in PALL-Gold.  But still, it’s worth noting…

pall-gold

In other news… Dow 20,000… woo hoo!  The target is actually 21,000 (2410 for SPX and 5500 for NDX per NFTRH 431’s weekly charts).

Sentiment is bound to become extreme but as we saw in 1999 and 2000, that can pack its own kind of power.  Every bear who fought it back then was killed until finally the last bear standing won.

My plan continues to be to diversify within different sectors that stand to benefit by (or at least not be overly antagonized by) the new presidential admin and its policies.  That includes letting other gold bugs do the cheering and/or obsessing on that sector while still holding a small core of quality items as part of the greater diversification (assuming the gold stock indexes/ETFs continue to hold key support and/or the channel breakouts).  We’ll update as usual this weekend.

I am still holding WAT, despite its ping of the 150 target yesterday.  I was not even looking when it went up that high and then flopped.  I still like the Medical Device sector for 2 main reasons covered previously, the 21st Century Cures Act and the prospect of easing tax burdens on these companies.

I finally added Asia (ex-Japan) via AAXJ and India via INDY back to the portfolio on Monday.  Still holding FCX, which has made a move.  Still holding AMGN, even as the sector gets antagonized by the political backdrop.  Also, there is Fanuc (FANUY) well on plan so far per our original NFTRH+ speculation.

Rather than getting too gabby about it, I’ll just pop in a couple screen shots of the portfolios.  This is of course subject to change at any time that I don’t like the look of the market, especially given its over bullish sentiment backdrop.  For now, bullish is bullish.  The two yellowed items, IYE and IHI, were added today.  There are a couple new items in there as well that I’ll try to talk briefly about in NFTRH 432.

brokerage

ira

Bottom Line

I see a lot of people putting a political spin on the market and as noted would be the case, I am going to mostly leave my own personal thoughts on a back burner and try to manage the market we’ve got.  What we’ve got is America getting great again… in the market’s eye.  Dow 20,000, Trump admin rolling back the previous admin’s policies already, and a sentiment extravaganza in the making.

This has probably been the preferred scenario all along and I tell you again that I am not the most comfortable guy in the world when it comes to managing momentum and euphoric sentiment.  This may sound demented, but I am more comfortable when people are miserable; at least when it comes to markets.

But I am trying to incorporate lessons learned and keep a hold of my own emotions and beliefs, take some profits, trade into other items on opportunity and all the while be sensitive to keeping cash balances up at acceptable levels.

Admin note:  I am wrangling with PayPal on a foolish issue that should not even be an issue.  But until I get it resolved, I will be a bit distracted.  I’ve also got a couple other balls up in the air.  So if I don’t see you with another update during the week I’ll see you on Sunday with NFTRH 432.