(Please enjoy this updated version of my weekly commentary from the Reitmeister Total Return newsletter).
Stocks were about to have their 6th straight session in the red on Tuesday. At the darkest hour on Tuesday the index got all the way down to 3805. Then in a seeming blink of an eye we were back into positive territory closing the session at 3,881.
What the heck just happened?
And what happens next?
Let’s discuss all that and more in our weekly commentary.
If you didn’t join our RTR members only webinar yesterday, then you missed a lot. Here is what we covered.
- February Rewind- what is causing the volatility?
- State of the stock bubble
- What happens after we hit 4,000?
- RTR trading strategy update
- Portfolio position review
There is a part of me that wants today’s entire commentary to simply be
“Watch the above webinar”.
That’s because it is loaded with everything you need to know to get your mind wrapped around the current market environment. And how to carve a path to future outperformance.
Everything beyond that is just more of the same. Meaning there is simply nothing but bullish information being given to investors.
More stimulus on the way.
Jobless Claims 15% better than expected.
Redbook Weekly Retail Sales up +4.9% year over year.
ISM Manufacturing surges to a searing hot 60.8. New Orders shockingly good at 64.8. And finally the employment component is joining the fun at 54.4 (up from the tepid readings of the past).
This is all impressively bullish on top of one of the best earnings seasons in a long time. So the bull party continues.
But Reity, why did stocks keep tumbling over and over again in February?
Like I said, watch yesterday’s webinar and get the answers. But if you demand that I type it up for you now and risk incurring carpel tunnel syndrome…then so be it 😉
Because stocks don’t go straight up!
And every now and then you need to see a round of profit taking. Like a modest move down to the 50 day moving average at 3,805. That’s all that really happened, which is why we so quickly and easily bounced higher on Monday to start March.
The more interesting discussion is what happens after we hit new record highs at 4,000. That topic was also discussed in the webinar.
Lastly, lets tackle an interesting topic about our successful interest rate trades poised by fellow RTR member, Joe.
Joe Asks: What’s going to be a trigger that will cause rates to stop rising leading to a shift out of our 2 interest rate trades?
Let’s start with the big picture. The historical average rate on 10 year = 4%. So that is a long way up back to normal.
So the only thing that stops that train is another negative economic event that causes a lowering of inflation expectations and Fed to aggressively crush rates. Barring that, then the reversion to the mean train is chugging up towards 3-4% rates. We will be taking some profits on the way up at logical rest areas. But hard to sell any before 2 to 2.5% which should be a given in next 12-18 months.
Even with increased volatility the past week we kept our head well above water. That shows up in tidy gain of +1.56% while the S&P ended -0.28% in the red.
Pulling back to the bigger picture, here is an updated view of our year to date lead over Mr. Market.
+3.04% S&P 500
+16.88% RTR portfolio
I gave a pretty hearty review of all 14 portfolio positions (11 stocks and 3 ETFs) in yesterday’s members only webinar. So you can skip ahead 18 minutes in for the details.
Now let’s dig in with some insights on our individual positions (the rest of the commentary is reserved for Reitmeister Total Return members).
What To Do Next?
Right now my Reitmeister Total Return portfolio is well positioned for where the market’s headed in 2021. And that is a VERY different playbook than what worked in 2020.
Gladly we have been reading the tea leaves well which is why our portfolio is solidly ahead to start the new year.
If you would like to see the current portfolio of 11 stocks and 3 ETFs, and be alerted to our next timely trades, then consider starting a 30 day trial by clicking the link below.
Wishing you a world of investment success!
…but everyone calls me Reity (pronounced “Righty”)
CEO, Stock News Network and Editor, Reitmeister Total Return
SPY shares fell $1.32 (-0.34%) in premarket trading Wednesday. Year-to-date, SPY has gained 3.25%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...
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