Astute Strategist Blog

Market Context
Good day,

Was it really only 1 week ago that we were looking at the S&P 500 (SPX) trended lower and possibly testing the support level of 2700!? A week ago on March 8th, we saw a low of 2722 in the SPX, fast forward 5 trading days and we are looking at a closing 100 points higher at 2822. What was the catalyst? There were no real positives coming out of the China trade talks. Is it the age-old saying, “No news is …bullish!”

More and more this market seems to have less fear as seen with the Volatility Index (VIX) closing at 12.88% for the week. The moments that there are countless buyers or where market participants are overly bullish is typically when the market surprises everyone and the rug gets pulled. Are we in such an environment? Time will tell, but until that is revealed where are we putting our monies? On March 8th to subscribers, I had stated that Apple Inc (AAPL) looked to be holding up quite well, and given the amount the market bounced off the lows, I would be getting long AAPL, it was trading around the 170 level. At the time of this blog post, AAPL closed the week at 186, that’s a 9% move in a week!

Often I am told by investors and traders, “I am waiting for the pullback, then I am going to buy this market” or “I am waiting for “the crash” because I want to buy lower”, while those can sound great in theory, how many times are the followed upon? For example, when the SPX was at a low of 2346 in December 2018, was that enough of a pullback or “crash”? Jessie Livermore said it best, “Markets are never wrong, opinions often are”. Wouldn’t it be a beautiful thing to see you have stock, and not need the market to cooperate and still come out ahead?

Let me give you a quick example. In our Astute Millionaire Course, which we get long stock and use options to hedge downside. We bought Southwest Airlines (LUV) at 56.25, it is since trading at 51 and now we own 4% more shares for no added out of pocket investment. How!? Let us show you, all for less than a cup of coffee a day – Click here!

As for the market and the upcoming week, the trend is your friend and given the market has closed above the 2820 price level, the next level of resistance looks to be around the 2840-2850 level. It would not surprise me to see a pause in this uptrend and a test of support at the 2800 level before resuming.