Sell the news before others sell the news?
Pretty much that, don't you think? On top of that is the fact that the Nasdaq's been up for ten straight weeks, the most since 1999 -- and we know what happened after 1999.
Look, I get it. We've been trimming for Action Alerts PLUS for what seems likes ages, although some of that is our annual distribution of capital gains and income that we are required to do, as would any charitable trust of this nature.
The difference?
We are trimming to buy the "sell the news" dip -- not sell it, as I think that the negativity regarding this entire move has been insanely out of touch versus what is happening.
Again, rationally, you could say we are almost back to where we were before the October 3-4 back-to-back bouts of hawkishness by first Jay Powell and then Vice President Pence against the economy and China. Therefore, now that the Fed has switched to being more dovish and the President might have a trade deal, we could be ready for a victory selloff.
But I say that view leaves no room for the upside that comes from trajectory change of a different sort.
If you go back to where the selloff started, we were dealing with a Fed that was going to raise three times this year. Now the intellectual parlor game is to figure out if the Fed will raise at all. That's a lot more bullish than October 2, the putative day before all of this pain began.
On October 4, we had a ratchet up of the tensions with China that made ti sound like the U.S. didn't want a deal, it wanted some sort of regime change. Now we are talking about doing more trade than ever.
They simply aren't comparable. Where we are right now is MUCH better than where we were before we sold off into that miserable fall and the bear market of December.
Or to put it in a different way, consider the possibilities for just these five positives -- and the stock associated with them, which I do not believe are "in" the market and give you pause to BUY not sell, if they go down this week.
- American Express (AXP) is a couple of points off of its high. It had a good last quarter. It has been trying to crack into China for ages, both on its own and with a partner. It has had no luck. The possibility that it could happen has increased dramatically, as it is a showcase of how China could capitulate with no real harm to its system. (I think Visa (V) and Mastercard (MA) are a bigger threat to the Chinese entities who control 6.7 billion cards, but it's possible.)
- Boeing (BA) sells one in every four planes to China. Everyone knows that. What I think isn't known is how hard Boeing's been working to make it so China isn't nearly as important, something that's been aided by Airbus (EADSY) incompetence. I think that China would have to place a bunch of orders just to stay in the queue.
- United Technologies' (UTX) stock has been stuck in the mud, not tracking Boeing. I believe this is because of fears that its Otis division, heavily dependent upon China for growth, is weighing on the split up among Climate Controls, Otis and aerospace. You extrapolate pre-trade-tension Otis, and you get a much higher stock price.
- A giant contract with Cheniere Energy (LNG) would assure that there would be a ready market for all the natural gas we want to export, which means that the myriad plants being constructed and the pipelines needed to fill them are most likely going to need to be built. That's fabulous for everyone from GE (GE) and Caterpillar (CAT) to United Rentals (URI) and DowDuPont DWDP, which should be a winner in its own right from its ag division.
- Micron Technology (MU) , Broadcom (AVGO) , Skyworks Solutions (SWKS) , Nvidia (NVDA) and Intel (INTC) and a host of other semis can both be more acquisitive and less inhibited in their Chinese inroads, something that's been a continual theme until we started fighting back in the trade war. Broadcom's assimilated CA Technologies, and is probably ready for a deal. Micron's DRAM prices might stabilize. Intel would like to be bigger in communications. Perhaps gaming can reignite for Nvidia. Skyworks will be viewed, once again, as a 5G play.
There. Five ideas filled with stock that will sell off today and the next few days that could be opportunities. And I didn't even include Apple (AAPL) as a positive, because I am convinced the quarter is bad for a host of reasons and don't want to get even the most remote hopes up that the case is otherwise.
