SPY: New All Time Highs before Election Season?
In managed markets TA doesn't work as well. With that being said, I'm going to detail my tentative strategy for the upcoming year. But first let me outline the reasons behind my bullish thesis.
1) All banks are racing to zero or negative rates. - At zero banks are just printing money and handing it out. With yields dropping, banks/funds will borrow money and buy high quality stocks with dividends.
2) Trump administration is looking at minimizing dollar flow into Chinese equity. -If major players and funds are forced to sell Chinese stocks, they may reallocate into US equity.
3) We had massive stock buy backs over the last 10 years. - Since the over all supply of circulating stocks is reduced, this will make it easier to bid the prices.
4) Being the global reserve currency , the dollar may be perceived as a safe haven. - Emerging markets may flock to USD denominated assets if their currency weakens too much against the dollar.
5) Trump has deregulated massively and cut corporate tax rate significantly. - The American economy is the only economy with real legs behind it. The pro business policies may strengthen the impact of the rate cuts.
We basically had a dead cat bounce over the last day. I think there's a good chance we go lower before making all time highs. We have plans to meet with the Chinese in September, but I'm doubtful of any progress. The hard liners have taken over and I think they would rather shoot of their own noses off before capitulating. For example, despite the massive pork shortage in China, they're refusing to buy hogs from US (pork is the main protein in mainland). With every unfruitful meeting, I believe the market will dip. However, Trump and his administration will do everything they can to prop it up before the election season.
Plan:
I changed new 401k contributions to 80% stocks / 20% stable income fund(cash) . This means every paycheck, 80% of my 401k contributions will buy stocks, so I'm essentially buying the dip every paycheck. My current 401k portfolio allocation is 90% cash / 10% stocks. If we dip to 2700 I'll be changing that allocation to 80/20. If we dip to 2500 ish, I will strongly consider going 60% stocks/ 40% cash.
If I'm right I'll start converting back to 90% cash in small increments every month leading up to the election.If I'm wrong, I'll be happy I didn't go 100% stocks. Good luck everyone.
Follow me on Twitter for Crypto and financial news insights: twitter.com/CryptoOneStop1
Recently I've been more active on Youtube: youtube.com/channel/UCNgGAqSgBp8-qxY51u1-_MA
1) All banks are racing to zero or negative rates. - At zero banks are just printing money and handing it out. With yields dropping, banks/funds will borrow money and buy high quality stocks with dividends.
2) Trump administration is looking at minimizing dollar flow into Chinese equity. -If major players and funds are forced to sell Chinese stocks, they may reallocate into US equity.
3) We had massive stock buy backs over the last 10 years. - Since the over all supply of circulating stocks is reduced, this will make it easier to bid the prices.
4) Being the global reserve currency , the dollar may be perceived as a safe haven. - Emerging markets may flock to USD denominated assets if their currency weakens too much against the dollar.
5) Trump has deregulated massively and cut corporate tax rate significantly. - The American economy is the only economy with real legs behind it. The pro business policies may strengthen the impact of the rate cuts.
We basically had a dead cat bounce over the last day. I think there's a good chance we go lower before making all time highs. We have plans to meet with the Chinese in September, but I'm doubtful of any progress. The hard liners have taken over and I think they would rather shoot of their own noses off before capitulating. For example, despite the massive pork shortage in China, they're refusing to buy hogs from US (pork is the main protein in mainland). With every unfruitful meeting, I believe the market will dip. However, Trump and his administration will do everything they can to prop it up before the election season.
Plan:
I changed new 401k contributions to 80% stocks / 20% stable income fund(cash) . This means every paycheck, 80% of my 401k contributions will buy stocks, so I'm essentially buying the dip every paycheck. My current 401k portfolio allocation is 90% cash / 10% stocks. If we dip to 2700 I'll be changing that allocation to 80/20. If we dip to 2500 ish, I will strongly consider going 60% stocks/ 40% cash.
If I'm right I'll start converting back to 90% cash in small increments every month leading up to the election.If I'm wrong, I'll be happy I didn't go 100% stocks. Good luck everyone.
Follow me on Twitter for Crypto and financial news insights: twitter.com/CryptoOneStop1
Recently I've been more active on Youtube: youtube.com/channel/UCNgGAqSgBp8-qxY51u1-_MA
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