My Top Five Buys Right Now
I'm adding to a few positions today...
Last week I told you it was a good time to exercise patience.
And that was good advice, as the stocks driving this bull market - particularly Nvidia (NVDA) - had a tough week. In fact, the best performing stock in the market - which I called earlier this year - has lost $500 billion in market value in the last five trading days.
While I told you I wasn't buying anything last week, I did note now is an excellent time to get your "shopping list" together.
And that's exactly what we're going to do today...
...as we review every position in the portfolio.
Core Portfolio (SPY, QQQ)
I mentioned last week that markets were extended and due for a breather.
That's happened, as the markets continue to grind sideways at a historic pace. In fact, the S&P 500's worst day this month has been -0.25%. The index hasn't had a month in which its worst day was -0.25% or better since August 1965.
So by all measures, we're in the midst of a "lull" or "boring" period for stocks. There is no way to tell how long this will last, however volatility could come back if the market's top players stop cooperating.
For instance, both the S&P 500 and Nasdaq 100 keeps rising to record highs, but few stocks are coming along. More and more of its member stocks are hitting new lows across time frames, and fewer stocks are holding above their moving averages. The divergences are the widest in the index's history.
When only a handful of stocks are driving stocks higher, it's risky because if those same stocks (i.e. the Magnificent 7) begin to struggle, the indices will struggle. Investors are also growing complacent, evidenced by short interest on the S&P 500 and Nasdaq hitting their lowest levels in five years:
That said, the technical picture for both the S&P 500 and Nasdaq remain in strong uptrends. And the "overbought" conditions on the 14-day RSI we discussed last week are being worked off.
With that in mind, I will add to my SPDR S&P 500 (SPY) position in my retirement account as I do every month.
New Members: Allocate 5% of your portfolio to a long position in the SPDR S&P 500 ETF (SPY) and 5% of your portfolio to a long position in the Invesco QQQ Trust (QQQ).