Market Direction Model - Model switches to BUY on June 1, 2020

Published:

1 Jun 2020 09:26 ET

MDM has switched to a BUY signal. Limitless liquidity continues to provide a firm floor for any setbacks, economic or otherwise. Markets continue their relentless, but choppy/noisy, gap-down-prone uptrends. That said, expect second and third order demand shocks and other issues to hit the market. Such sell offs are likely to be entry points in stocks and ETFs, but of course, the depth of the sell off will be determined by the severity of the second or third order effect. Some examples that could worsen:

=Trade Wars: U.S. vs. China trade wars along with COVID-related embargoes plus the escalating situation in Hong Kong.

=The Economy: Reports falling short of projections.

=Various looming crises: 1) pensions, 2) mortgage defaults, 3) commercial retail, 4) restaurants, 5) airlines... among others.

Nevertheless, the massive flow of printed capital has to go somewhere. Stocks, bonds, gold, real estate, and bitcoin have been and will continue to be recipients until the sovereign debt bubble blows apart. But that could still be a few years off. The dollar is still deeply ensconced as the world's reserve currency, plus technologies growing at an exponential rate remain in evolutionary overdrive. That creates actual wealth over time.

Suggested ETFs (Note: Many members buy the standard ETFs or their preferred ETFs. This list serves as a guide as to which ETFs we think may outperform, but the key point is to be on the right side of the market regardless of which ETF or ETFs one chooses.)

1-times

SPY (S&P 500)

QQQ (NASDAQ-100)

2-times

SSO (S&P 500)

QLD (NASDAQ-100)

3-times

UPRO (S&P 500)

TQQQ (NASDAQ-100)

TECL (Direxion Trust Technology)

NOTE: This is a suggested list. Investors may wish to become acquainted with the full range of available ETFs, and should make an effort to understand how these ETFs are created and what their components are, as well as being aware of the downside risks involved, especially with leveraged ETFs. Certain ETFs may be more appropriate depending on one's risk tolerance levels. Typing in keyword 'ETF' into the FAQ keyword search bar or going here https://www.virtueofselfishinvesting.com/faqs/search?p=1&q=etf and visiting this site https://etfdb.com/ can be instructive.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.