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MARKET makes big bounce: bought IYT, XLE & XSD

The market bounced over 2% today in above average volume.  That’s a very good sign, especially since the past two trading sessions have been depressed by an onslaught of oppressive government policy uncertainty- Mexican tariffs & Big Tech anti-trust, to name a few.

But the short sellers got caught by upbeat headlines-

  • Mexico vows to “curb” migrants
  • Fed Chair says “ready to act”

Will this happy talk narrative be enough to grind the market up to a new record high?

One things for certain- low interest rates and easy monetary policy are extremely supportive to the stock market.  Say what you will about our Dear Leader’s negotiating tactics, but when it comes to lower interest rates, he’s getting exactly what he wants.  The 10 year Treasury is near a 20 month low and it’s about back to where it was the day Trump was elected.  All this at a time when unemployment is at historic lows and GDP growth is above trend.

Even the European markets seem to be bouncing and Emerging Markets have been up for the past 7 sessions.

So with the S&P500 back above its 100 & 200 day moving averages, I made some additional purchases in out-of-favor sector ETFs:

  • IYT Transportation
  • XLE Energy
  • XSD Semiconductors  (see chart: support at 200dma)

Will this bounce hold?  All I can do is wish you the very best returns.

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