This is a rally that you rent….not own.

Since the June 16, 2022 lows, the Nasdaq 100 has rallied 19%.

Some stocks have soared 25% or more.

My articles between mid-May and mid-June wrote about the troughs and lows that I’m seeing in various markets.

In fact, my May 24th, 2022 newsletter collated a host of the articles written highlighting these oversold buying signals.

https://mailchi.mp/karriasset/buy-signals-appearing

Over the past few days, I’ve been divesting selected positions which are exhibiting ’selling tendencies’.

This doesn’t redefine my investing style and strategy as a ’trader’.

And the emphasis is on selected holdings.

This note written 5 days ago was a preview to my current selling thoughts.

I have been asking myself if the stocks in portfolios are ones that I’m ‘dating’ or ‘marrying’…..

and I remind myself to not confuse fortuitousness with any type of genius.

A 15%-20% return within 4-6 weeks is more than adequate.

Heck, it’s 2 years worth of return when comparing to a normalised, long term average and we are facing lower growth in the economy.

Over the past few days, I’ve been divesting selected positions which are exhibiting ’selling tendencies’.

Such ’tendencies’ and a rising probability of a ’trading peak’ is shown in the Nasdaq 100 Index as seen in the 2 charts below.

The Daily chart shows the Nasdaq 100 trading up to 2.5 standard deviations above its daily mean and back to (above) its 100 day moving average. To compliment the case, it is within a whisker of being overbought on its daily RSI indicator.

The weekly chart shows the NDX rallying to its rolling weekly mean and coincidentally touching its 26 week moving average.

Beyond this, the ’set-up’ in my other indicators just don’t marry up to suggest an extension of the recent rally in certain securities or indices,

hence, I’m only renting, not owning.

August 5, 2022

by Rob Zdravevski

rob@karriasset.com.au

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