Thread: MrJohnRoss' Account Talk

Originally Posted by limebalz

This is a great Christmas treat! Loving it

Yep. Thank you Santa.

Dat name tho... :toung:

Hahaha! Quite the visual.

Originally Posted by MrJohnRoss

I studied the long term (weekly) and short term (daily) relative strength charts for C, S and I, and decided that the tides are turning in favor of S. The daily chart shows S outperforming C since Dec 1st, and breaking the downtrend line. The weekly chart also appears to show that S is bottoming out and turning higher. So even though S is underperforming C today, I've gone 100% S.

Here's the daily relative performance chart of S vs C.


S vs C.png


When S is outperforming C, the line is moving higher. This year, large caps have been outperforming small caps, so the bigger trend has been downward.

That may be about to change. We're now entering the seasonally strong period for small caps. Most of the so called "January Effect" now takes place in the last half of December, and strongly favors small cap stocks.

According to the Stock Traders Almanac, over the last 27 years, using the period from 12/15 - 01/31, the R2K returned 4.2% compared to the R1K's return of 2.4%, or nearly double the return. Most of that outperformance occurred during the end of Dec.

Looking at the chart above, this December is favoring small caps, and the downtrend line from Oct has been broken. There is also a downtrend line from the July high (not shown) which has also been broken. The 50 day is beginning to turn up, and the RSI says we're not even close to being overbought.

Of course, nothing is ever 100% guaranteed with the stock market. But with a very strong history on our side, the odds certainly favor small caps at this time.

Good luck!

Originally Posted by MrJohnRoss

One of the stocks I see doing well during this downturn is a well known tech stock....

...wait for it...



Yep, I think FB is getting ready for a ramp higher. PPO, Stoch and RSI are all climbing, and it appears to be getting ready to break out of a consolidation phase. It's near 78.50 today. If it can clear the recent high of 81.16 (convincingly), then you may see it do very well in the near term.

*This is not a recommendation to buy, sell, or trade any security. For educational purposes only.*

FB stock trading alert: We now have a nice solid breakout above the 81.16 previous high.

fb.png

Picked up some Ambarella (AMBA) this morning at 50.25. Coming out of a nice little dip after hitting the 50 SMA. Once it clears 58, there's no overhead resistance.

IBD ranks it 99 95 99. I like the looks of the PPO, RSI and Stoch.


amba.png

Looks like Mr. Market added 40 bp to the S Fund and 38 to the C Fund today.

Hope we can clear the previous highs soon. I'm guessing early January.

Tomorrow 12/23 is another historically bullish day for the markets, with the Dow, S&P, and Nasdaq all up 71.4% of the time over the last 21 years.

Historically, since 1969, here's how the S&P has performed over the next six days :

+0.10%
+0.32%
+0.27%
+0.04%
+0.20%
+0.05%

The average Santa Claus rally from 12/24 - 1/3 has historically provided a nice total gain of +1.50%.

I'm sure Chief Heisenburg would agree with me when I say, "bring it on".

More stats: (for you stat junkies, like me )

Since 1987, had you bought the Nasdaq Index 3 days before Christmas, and held for eight days, you would have a 25/2 (92.6%) win/loss record, and your average return would have been 3.2% over those eight days.

Sounds like TQQQ should do quite nicely.

If only this was true. A +935% gain today...

JNUG.png

In reality, it's just a reverse split, and the historical data needs to be divided by 10.

Per CNBC:

The U.S. economy grew at its quickest pace in 11 years in the third quarter, the strongest sign yet that growth has decisively shifted into higher gear. But a separate reading on U.S. factory orders for long-lasting manufactured goods slumped in November, largely due to falling demand for military and defense goods. The Commerce Department on Tuesday revised up its estimate of gross domestic product growth to a 5.0 percent annual pace from the 3.9 percent rate reported last month, citing stronger consumer and business spending than it had previously factored in...

Drug companies taking a hit today. CELG and GILD are down sharply, which is dragging down the Nasdaq...

I'm looking at buying some more CELG on this nice down day if it goes a little lower.

I have been shopping recently and have begun to realize what a great buying opportunity that the bottom in October was.