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2008 Libertarian Vice Presidential candidate
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Main | VRA Update: May to October Seasonality. Fearful Investor Sentiment Readings. Q1 Has Been Nothing Short of Sensational. »
Thursday
May102018

VRA Update: All Aboard. Buy Signals Galore. VRA System Review. Sentiment Update

Good Thursday morning all. It's finally happening. The broad market and key leadership sectors are breaking out of a downtrend. Bulls, as we expected, are starting to regain control of the narrative. The train is leaving the station. All aboard. 

If you've been joining our (brief) daily after-close VRA Podcasts, you've heard Tyler and I discuss the "many" signs of a market that was clearly bottoming. The VRA System was pointing to a positive resolution...the fact that the lows were being put into place, with each successive day of broadening, positive internals. You can join us each day, after the close, by signing up here: vrainsider.com/podcast (you'll receive email notification when the podcast has been posted). 

You should remember this chart from the last 3 weeks in. It was the chart that mattered most. 



The big-cap S&P 500 and the small-cap Russell 2000 are now breaking out of this three-month downtrend characterized by a series of lower highs (but higher lows). That is now reversing. We see it reversing in charts left and right. Highly bullish. Yesterday, when the S&P moved into the 2,680 range (as seen above)...the key breakout from that downtrend ...the market spiked. The S&P has now risen nearly 100 points, and the DJ more than 1,000 points, since Thursday's lows.

February, March and April were tough for bulls, as a series of weaker economic data, inflation concerns, and debates about "peak earnings" had bears on the ascendency. No more. The VRA is long and strong.

Combined with our "growth stock. story stock" positions I will be surprised if the VRA Portfolio does not put up (at minimum) a return of 50% this year. We've beaten the S&P 500 14/15 years....we had a very nice 37% net gain last year....and if I can be so bold; I know no one that finds grand slam stocks more frequently than yours truly (I say that in all modesty, Mr market...the investing gods are not big fans of bragging).

Bottom line; 2018 will see the Dow Jones hit 30,000. I see it at 28,000 by the mid-terms. And no, Dems have no shot at winning back either the house or the senate...thats not meant to be a political statement...I simply no longer know what Dems believe in, outside of "Russia Russia Russia" and "Impeach Trump". 

Politics absolutely matter to the markets...only investing novices believe otherwise. This is why I follow DC and global geopolitics so closely. You bet, who the president is matters...it matters a great deal.

Final points: yesterdays 52 week highs/lows was 578-240. Thats big, back to back days of a market surge, internally. We've now seen 13-18 days with positive internals. Thats BIG. The VRA System now shows 10/12 screens bullish. The highest in two months. 

We'll wrap this morning with last nights AAII Sentiment Survey. Bulls at 33.5%, bears at 25.5% and neutral investors at a big 41%. 

Folks, with the markets just a few % points below their all-time highs, this survey (that I have followed closely for 30 years) shows 66.5%of investors either bearish or neutral on stocks. Let that sink in. As contrarians, we know exactly what this means.

Until next time, thanks again for reading...

Kip

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