Day 92: It's A Setup


The Mother's Little Helper portfolio was up today (+0.86%) for a gain of +$5,718.43. Overall gain to date: +$90,516.94 (+15.50%). 36 stocks are now in the black, 10 are still in the red, 1 was sold out in a merger. According to CNN Money the S&P 500 is up +5.35% Year To Date.

I said before that the rally we're seeing in the markets is not due to Trump, it's all about a strong underlying economy. Trump feeds the sentimental traders who trade on sentiment. The economies fundamentals feeds investors. By the way, we're investors here. Today was the inflection point.

Rarely do we get to see such a terrific setup in the markets, and this is usually when all the naysayers, doomsdayer's and bears really get ferocious with their dire predictions. Put on your ear muffs and avoid the noise. Consumer confidence hit 125.6, the highest level since December 2000. The Schiller home price index was up at 5.7% vs. 5.6% estimated year-over-year. The advanced good trade deficit shrunk (good thing) to $64.8 billion in February, analysts had expected a decline but only to $66.4 billion. Preliminary wholesale inventories rose 0.4% month-over-month in February, well above analysts forecasts of 0.2% increase. The biggest surprise today came from the Richmond Fed Manufacturing Activity Index; which moved further into expansion territory (expansion is above 0), jumping to 22 for March. That's the highest since April 2010, from the 17 posted in February, and versus expectations of a 15 reading. Read that again!!!! A 15 was expected, once again the analysts got it wrong, big league, by a huge 7 handle! U.S Treasuries finished the day lower, with the 10-Year note at 2.41%, a pull back from my dooms day number of 3.03. We were at 2.6% not too long ago. And just to sweeten the deal a little more the Federal Reserves Vice Chairman Stanley Fischer said today, "two rate hikes seems to be about right". That's a lot of confidence in the economy from the Fed, and two not three more hikes suggesting that there will be a lot more growth this year while interest rates will remain historically low. That's equivalent to Richard Petty saying, "I don't need no brakes".

There will be more up and down days ahead, that's normal. For the time being just visualize the DOW, S&P and NASDAQ sitting atop a coiled spring and the hair trigger that's going to release it is just ahead.

Stay Invested,

Clay Baker

Disclosure: I am personally invested long in these stocks that appear in the MLH portfolio and may purchase or sell share withing the next 72 hours. I am also invested in other stocks that do not appear in the MLH portfolio: BA, BRK.B, CELG, CSCO, CTXS, CVX, DOW, DVAX, FB, IBM, NTES, NVDA, OMER, PFE, PG, RDHL, SCHW, THO, TWX, VEEV, VZ, XLNX, XOM

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.

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This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice.
This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.

© 2016 by Clay Baker all rights reserved