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Saturday, May 13, 2017

Markets Near Record Highs, Open Gaps & 2400 Resistance Level

Market Update for Saturday May 13, 2017
  • The four major US markets I follow are up between 1.9% and 13.7% YTD.
  • The S&P500 and Nasdaq markets set new record closing highs this week.
  • The 2400 level continues to be strong resistance for the S&P500 while open gaps are cause for concern.
  • The New Rates for New and Old I-Bonds are out.
  • My Explore Portfolio continues to do well in 2017 after a great 2016.  It finished the week at a new record high!
  • Click images to see full size
This charts shows the major markets YTD performance.  The Nasdaq at up 13.7% YTD is doing the best while the Russell 2000 small cap index is only up 1.9% YTD, but that still beats cash and CDs!   (See Best CD Rates
This "Gap chart" shows open gaps in SPX, the S&P500, that can act as strong magnets for corrections.  Those magnets would lose some power if the market can push and close above 2400 with volume.
This longer term chart shows the S&P500 has had the smallest of the "healthy correction levels" (typically 3 to 8%) that I like to see before markets can surge to new highs. 
This long term chart of my "Explore Portfolio" performance shows it ended the week at a new record high.  I've taken profits in many stocks making record highs and used some of those profits to buy more shares of stocks that have significantly corrected even as the overall markets are at or near record highs.  To see how this works in a global sense, read my article: Make Money In A Flat Market With Asset Allocation & Market Volatility

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This chart shows the data in tabular form.  If your own portfolios are not up somewhere between 1.89% and 13.71 YTD and you didn't get double digit gains last year, then you should consider what you are doing wrong and look to make changes, perhaps with the help of a subscription to my newsletter
I cover I-bonds and a "better option for tax deferred money" in my newsletter but I also write many free articles such as this one: 

  • Attractive Rates for Conservative Savers.
  • Series I Bond Rates are 1.96% to 5.60% for the next six months.
  • New I Bonds issued for the next six months will earn 1.96%.
  • Unlike the BND ETF, Series I Bonds never lose money!
This is a very important article to read and understand:
If you would like help, then subscribe to my newsletter! 

Kirk Lindstrom's Investment Letter:
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Friday, May 05, 2017

New Record Closing Highs For Nasdaq & S&P500

Today the Nasdaq and the S&P500 indexes closed at new record highs.

The S&P500 closed at a record high that broke the last record closing high set on March 1, 2017 at $2,395.96 when all four major indexes I follow closed at record highs.

All four indexes set record highs on March 1, 2017.  :
On an intraday basis, the S&P500 failed to surpass its record high of 2400.98 by a whisker:

Treasury bonds still have very low yields on an historical basis.  This chart shows US Treasury rates and the Federal Reserve's Fed Fund's Rate back to 1993.

My "Explore Portfolio" also closed at a new record high today!

Kirk Lindstrom's Investment Letter:
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Monday, May 01, 2017

May Day Marks a Record High for the Nasdaq and My Explore Portfolio

New record highs were made today for the Nasdaq and my Explore Portfolio.

Most other markets are less than 1% from their record highs also.

Of course, I've been taking profits as my stocks make record highs and have bought back shares in a few that are "out of sync" and in correction mode as investors are chasing large cap Nasdaq names.

My hybrid 2CS model is suggesting caution soon.... Do you have your list of stocks to buy or add to when the market corrects?

Kirk Lindstrom's Investment Letter:
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My Core and Explore Performance vs Warren Buffett's BRKA:

Thursday, April 27, 2017

Final Fed Estimate of Q1-2017 GDP Fell to Only 0.2%

President Trump will not be very happy if the Atlanta Fed's final estimate for the first quarter of US GDP under his watch is correct.

Today the Atlanta Fed announced its last estimate for Q1-2017 GDP before it switches to estimating GDP for Q2-2017 on May 1, 2017 (next Monday).

Latest forecast: 0.2 percent — April 27, 2017 

  • The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.2 percent on April 27, down from 0.5 percent on April 18. 
  • The forecast of first-quarter real consumer spending growth fell from 0.3 percent to 0.1 percent after yesterday's annual retail trade revision by the U.S. Census Bureau. 
  • The forecast of the contribution of inventory investment to first-quarter growth declined from -0.76 percentage points to -1.11 percentage points after this morning's advance reports on durable manufacturing and wholesale and retail inventories from the Census Bureau. 
  • The forecast of real equipment investment growth increased from 5.5 percent to 6.6 percent after the durable manufacturing report and the incorporation of previously published data on light truck sales to businesses from the U.S. Bureau of Economic Analysis.

As you can see from the chart:

  • The Atlanta Fed's estimate was over 3% in early February but has plunged towards zero since then.
  • The "Blue Chip consensus" has estimates for Q1-2017 GDP in the range of 0.9% to 2.1%
The Bureau of Economic Analysis, BEA, will release their first official estimate of Q1 GDP tomorrow, April 28, 2017. (Schedule)

Kirk Lindstrom's Investment Letter:
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My Core and Explore Performance vs Warren Buffett's BRKA:

Wednesday, March 22, 2017

Market Decline Has Fear & Greed Index Showing Fear

CNN's "Fear & Greed Index" has fallen into the "Fear Zone" with the markets decline from their March 1 record closing highs.
(Click to view images)

Today Investors are skittish as:

Click for full size image
Click for full size image
My Core and Explore Performance vs Warren Buffett's BRKA:
Kirk Lindstrom's Investment Letter:
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Wednesday, March 08, 2017

CIA Hack to Get Window 8 For Free

As a Microsoft (MSFT)shareholder, I hope the company demands a full accounting of the CIA and NSA to make sure every workstation that has Windows software paid for the license.  
From a WikiLeaks tweet yesterday: 
"Don't want to pay for Wndows? The CIA's hackers have a pirate guide to skip product key activation"
"The default MDSN Windows 8 installation requires Product Key Activation in order to setup.  The following steps are useful in editing the MSDN iso to enable the Skip button during the install."
Hell, over 30 years ago when I was at HP and it was easy to get and install illegal, pirated software, having it on a work computer without the proper license was something that would get you fired and walked out the door.  
It is "interesting" as Mr. Spock would say that there is no warning on this hacked document that doing this is illegal.

Perhaps  Microsoft will get a huge revenue boost by going after the CIA and NSA to get paid for the stolen software.... This could be a nice, special dividend for us shareholders!

Monday, March 06, 2017

China Lowers 2017 GDP Growth Target

According to the Financial Times article, "China targets economic growth of around 6.5 per cent," China lowered its annual economic growth target to "around” 6.5%, compared to last year's target range of 6.5% to 7%.

Do you believe these numbers?

This lower target was announced "on Sunday morning by Premier Li Keqiang in his annual “work report” to China’s parliament, the National People’s Congress. "

Other comments in the article of note:
  • "Reflecting Beijing’s caution, Mr Li said the government’s fiscal deficit target would remain unchanged at three per cent of GDP; last year it came in at 3.8%."
  • "Retails sales growth is also expected to moderate slightly to ten per cent this year."
  • "In his work report, Mr Li also predicted that fixed asset investment, a key driver for the world’s second-largest economy, would increase nine per cent. Fixed-asset investment grew only 8.1 per cent last year, below the government’s initial target of 10.5 per cent."
Note: You may have to enter "China targets economic growth of around 6.5 per cent" into a Google search window to get a direct link to the article.  

Monday, February 27, 2017

Warren Buffett's Top Holdings for 2017 - Berkshire Hathaway BRKA

On Saturday February 25, 2017 Warren Buffett released his 2017 Annual letter to shareholders for his Berkshire Hathaway (BRKA) performance through December 31, 2016.  I wrote a detailed article about this for Seeking Alpha you can read at:
Buffett Listed 3 stocks of note with prices within 6% of his average purchase price.
He did not add to two top holdings that went down in 2016, an up year for the market.
Apple was a new position for 2016.
Any short-term market pullbacks to the average price Buffett paid could be a buying opportunity to do better than Buffett.
Holdings as of 12/31/16 from 2017 Shareholder letter:

Holdings as of 12/31/15 from 2016 Shareholder letter:

My Core and Explore Performance vs Warren Buffett's BRKA:

Kirk Lindstrom's Investment Letter:
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I'll use this article to add additional charts people request in comments here.

2/27/17 4:01 PM PST Update
  • According to Jim Cramer, on CNBC this morning Buffett said he now owns 133 million shares of Apple, making it equal to his holdings in Coke!  
2/28/17 7:09 AM PST Update:  
  • Doc Hopey wrote in the comments section of my article: "I am often impressed about the confidence regarding the depth of a moat. "Apple has a much bigger moat than IBM". How can you be so sure? I'd remember a lot of stocks in the tech business, that I guess I'd thought having a strong moat. Blackberry, Nokia, Kodak, Polaroid, Yahoo... Most of those have been (nearly) gone long before I started investing. Nonetheless in the rearview mirror all of those brands lost their mojo for technical revolutions. (Mostly) All of those consumer brands are gone and I am not sure if I would have gotten that right. Not so IBM."
Apple vs Sony Graph

Saturday, February 25, 2017

Market Update - Eleven Straight Days of Dow Records

Market Update for Saturday February 25, 2017
  • The Dow closed at a record high for 11 days in a row!!! 
  • Sentiment via my CPC and 2cs charts is getting extreme
  • It is nice that when you take profits you can get up to 2.38% in CDs (See CD Rate Survey) and 1.25% in savings (See Savings Account Rate Survey) 
  • Click images to see full size
This chart shows closing values for the markets by day.  Note how I highlight the numbers if they made a new record high.  
Led by the Nasdaq, this chart shows the markets are up between 2.76% and 8.59% YTD:

Long-term Dow & S&P500 charts:

The Russell 2000 small cap index is up over 46% in just over a year.  
These two short-term timing charts suggest caution now.
Do you have a list of stocks and ETFs you will use new cash or profit taking dollars for buying any major declines?

Some of the stocks I bought back a year ago when we had the last double digit decline (like FDX & LRCX) have done VERY well and I've taken profits to lock in huge gains.
Some Emailed Buy Alerts to my Subscribers Last Year
Kirk Lindstrom's Investment Letter:
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Friday, February 24, 2017

Tesla Double Bottom Breakdown with Next Five Support Levels TSLA

Tesla Double Bottom Breakdown - Support levels, listed below, range from $60 to $241.
Stock markets YTD graph also.

Support Levels:
  1. MA(50) = 50-day moving average at $240.11
  2. MA(200) = 200-day moving average at $216.58
  3. PNF Point & Figure blue support line at $188
  4. Lower dashed red support line at $155
  5. Open Gap around $60

Kirk Lindstrom's Investment Letter:
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 Stock Markets YTD

Kirk Lindstrom's Investment Letter Performance

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