Picks of the Day September 12, 2017

The Declines that Never Came!

The stock market opened yesterday at a gap up and didn’t look back! Hurricane Irma wrought disaster on Florida, but the fact of the matter is that not only did it fail to drag the market down but the S&P 500 climbed to a new historic high with gains of over 1%.

When considering that Hurricane Irma was less disastrous than expected, insurance stocks continued Friday’s rally. UVE soared over 12%, HRTG surging 21% and AIG tacking on 1.66%.

AAPL ended up 1.81%, a day before the expected launch of its new iPhone, giving both the NASDAQ and the S&P 500 their biggest push. Tesla (TSLA) soared 5.91% against the backdrop of news that China is exploring at what point it should prohibit the manufacture of traditional gas-powered vehicles. Teva (TEVA) soared 19% after the world’s largest generic drug maker finally succeeded in appointing a new CEO.

The best explanation for the market rally yesterday was the easing of tensions revolving North Korea, along with Hurricane Irma proving itself not as destructive as widely anticipated. It would seem like a perfectly logical explanation; the only problem is that these weren’t the factors that caused the market to fall last week! In essence, last week we spoke about how the market’s holding its own, proving itself robust despite the concerns engulfing it.

The market didn’t correct upwards yesterday – and that’s because it didn’t have to; it never fell! What’s moving the market isn’t what’s making headlines. It’s the same force that’s been driving the market for a very long time and that’s the almost uncompromising focus on price movement and the short-term technical market state. Don’t try to understand cause and effect here because that’s the last thing that drives price movement.

If you’re interested in successfully navigating this market you need to ignore most of the factors the bears are singling out. The only thing that’s truly important now is to try to continue to capitalize on price corrections, a strategy that hasn’t stopped working and churning out results. In effect, traders knew yesterday that if the market opened down, correction buyers would show up faster than kids at a candy store doling out free sweets. The strategy of buying corrections has been so dizzily successful that traders didn’t even have a chance to buy into a downswing; the market kept on rising yesterday, leaving traders no chance but to chase in pursuit.

The market has positive momentum at its back. You can’t fight the trend! There’s no other way about it. And for those looking for more complicated grounds to justify going against the market trend, we wish them the best of luck.

That doesn’t mean you have to be optimistic head over heels. Nor that we have to be euphoric. In effect, we’d be happy to see a more significant stock market price correction, not only because it would seem to be rather sensible at this point, but because it would create fabulous trading opportunities! But what we’d like and what the market does are two entirely different things. There’s no choice but to retain your bullish inclination for the time being.

About 6 billion shares traded hands on U.S. exchanges, above the 5.8 billion average over the last 20 trading days.

Tuesday: Apple is expected to reveal its new generations of iPhones. Apple indeed soared yesterday, but if we let history be our best guide, there’s a good chance the stock will fall from its current level. The big launch event will begin at 13:00 N.Y. time at the Steve Jobs Theater at Apple Park, the company’s new Cupertino campus.

Other stocks that are expected to react today to the launch of the new device are those in Apple’s supply chain: QCOM, ADI, JBL, MU, and GLUU.

Apple’s new device is expected to be its biggest upgrade in a decade, the price tag likely to be far-reaching, making buyers part with no less than $1,000.

Besides Apple’s big launch event, investors will focus on a number of economic figures to be released today. The NFIB small business optimism survey will come out at 6:00 N.Y. time and the JOLTS figures on the number of new jobs in the market – the Fed’s preferred employment reading – will be released at 10:00.

Tuesday’s Hot Stocks: AAPL, KR, EFX

IPOs: None

Have a great trading day!

Today’s Picks – Day Trading!

New York Strategy Swing

Today’s Picks – Swing “New-York Strategy”

 No.1 – CPB

Risk Rates: Normal – Regular size, High –Consider reducing size, Low – Consider increasing size