It was an excellent week for my options and long term hold portfolio. I finished up $51k, or 7% this week and I am getting much closer to my $1 Milllion on the journey!! Thanks to all of you that are supporting and believing in me! It really means a lot and I will try to do all that I can to help you achieve your financial goals as well!
$NAIL +9% (Shares; Took Profit)
$COIN -6% (Shares)
$TASK +12.5% (Shares; Took Profit)
$DIS +25% CLOSED
$MS +27% CLOSED
$SOXL +8% (Shares; Took Profit)
$SQ +30% (CLOSED)
$PYPL -8% (CUT)
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I took profit on my $NAIL as it was up to +9% on a swing trade, not options. That was pretty good, even though I had to DCA once. I have conviction for this ETF, and will be getting back in when it consolidates more for another round.
$SQ did well for the LEAPS that I was holding this week, however it is approaching a resistance that it hasn't broken through a few times. Let's see if we can get in and out of a small put.
$TNA might trigger on Monday if it can hold support at the 180 MA. This one I'll just be DCA shares for a swing play.
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Summer Cool Down
You have probably heard me refer to this more than one time. Historically speaking, it is probable. I always try to incorporate data into my reports, research and trading. Let's take a look at some of the historical data provided by Trend Spider.
Here we can see that in the past 5 years, July has been 100% positive change for all major indices, and the months following they start declining with October being the worst performing. On Trend Spider you can also run the seasonality data over the past 10, 20, 30 or more years to really get a feel for how to format your investing strategy. We can also look at certain sectors:
Tech (XLK), Retail (XRT), Financials (XLF) and Real Estate (XLRE) also cool down after a hot summer, yet Materials (XLB) and Semiconductors (SMH) consolidate a little, but not as much. Keep in mind this data is only over the past 5 years and past data doesn't guarantee future performance.
Also the 10 year notably does the opposite. Getting the point now?
So what should we do? I am getting ready to take profits on longer term positions and move somethings around in preparation for a bigger dip in September or August that I've been writing about for some time now. July is traditionally the best month, as it is this year too. Data is powerful, and I would not be surprised at all if the same thing happens this years. Some interesting plays that I recommended before to park capital in after taking profit from your sectors that will be rotated out of, could be: $X, $SCHD, $XHB, $DG however, there are a lot more. It will depend on your own investigating and thoughts as to which is the bet fit for you.
Maybe $BTI, British American Tobacco, could be a perfect fit for you. Check out the detailed 8 page research report that I did on this highly undervalued stock. Remember, all of my Pro Stock VIP's get unlimited access to these more in depth research reports.
Overall, even though the markets will most likely pull back in the upcoming months, I don't think there is any need to panic; no crash is coming. Sector rotations are a sign of a healthy markets plus the 10 year treasury bond is under 1.3% currently. Even if you just sat on your hands in a long term buy and hold portfolio, like most do, it will be find as the markets start heating up going into the holiday seasons. Let's consider what sectors and companies do well during the holiday season and we then can know what we should buy next. On ProStockAdvice.com we will be discussing this more later on, but let's not get ahead of ourselves to much. After all, the stock market is only a tool to transfer wealth from the impatient to the patient.
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Announcements: I haven't forgotten the book study on "Margin of Safety". Most likely I will be continuing this in August or September when I have more time. I just launched the VIP subscription here and am busy on the research reports. Also, I'm writing my first book on stocks, options and value investing. I hope that some of my supporters will read it! Have an excellent weekend!
Disclaimer: The comments opinions and analysis expressed herein are for informational and educational purpose only and should not be considered as individual advice or recommendations. Prostockadvice.com is not responsible or liable in any way for opinions expressed here. This is not meant to be financial advice as we are not a licensed financial advisor.