NASDAQ MACD & Stock Portfolio Updates: New Highs – Keep Holding By: Christopher Mistal | June 13, 2024 | Email | Print

 

Fueled by softer than expected CPI and PPI readings, NASDAQ continues to charge higher. As of today’s close, NASDAQ’s Seasonal MACD indicator remains positive and is trending higher. Continue to hold associated positions in QQQ and IWM. It would take a single day decline exceeding 846.72 NASDAQ points (–4.79%) to turn NASDAQ’s MACD negative.

 

 

When NASDAQ’s Seasonal MACD turns negative we will send an email to all active members. At that time, we will finish repositioning our Portfolios for the “Worst Months.” We do anticipate adding to existing bond ETF and cash holdings in the Tactical Seasonal Switching Strategy portfolio.

 

 

June is the final month of NASDAQ’s Best Eight months (2024 STA pages 60 & 150) and our Seasonal MACD indicator is working as intended keeping us in associated long positions established last October as NASDAQ continues to push higher and higher into record territory. As of the close on June 12, NASDAQ was up 5.2% with more than half a month of trading remaining. That performance alone is sufficient to rank this June as NASDAQ’s 10th best June ever. Should NASDAQ continue to climb, this June could quickly break into the top five or possibly better with 10 trading days remaining.

 

 

We have compiled the table above consisting of all positive Junes since 1971. At the bottom of the table relevant summary statistics for All Positive Junes, >5% Junes, and All Years are presented for comparison. Shaded years are past election years. The first observation about positive Junes is they have not frequently been followed by entirely smooth sailing for the remainder of the year as there is plenty of red throughout the table. It is also not surprising to see numerous down months during NASDAQ’s Worst Four Months, July through October with September and October performing the worst on average.

 

Compared to All Years, the biggest change following any positive June occurred in October with sharp drops in Average, Median, and % Higher figures. October’s average All Year gain of 0.7% became an average loss of 1.4%. Median performance fell from +2.2% to a loss of 1.1% and the percentage of positive Octobers dropped from 54.7% to 43.3%. September’s poor All Year performance remained nearly the same. July’s performance softened in All Positive Junes, but then strengthened in >5% Junes. August performance improved as did November, December and Q4. Full year performance improved as well especially following a >5% June.  

 

NASDAQ’s historical performance after a positive June is similar to S&P 500’s performance following a Down April with chop and weakness in Q2 and Q3 followed by respectable gains in Q4. Barring a major economic or geopolitical event, we continue to anticipate choppy trading through the Worst Months with no significant gains after NASDAQ’s Seasonal MACD signal triggers.

 

 

Over the past four weeks through yesterday’s close (June 12), S&P 500 rose 2.1% while Russell 2000 slipped 2.5% lower. Over the same period the entire stock portfolio declined 1.1% excluding dividends, interest on cash and any trading fees while the cash balance increased further. Within the portfolio, Small Caps were the only group to advance, up 6%. Large and Mid-Caps declined 1.3% and 5.3% respectively.

 

A significant portion of the portfolio’s total decline was the result of Super Micro Computer (SMCI) retreating from over $900 per share to $774.74 as of its close on June 12. SMCI is the largest stock position in the portfolio by value even after taking profits twice. Its volatility will impact overall performance more heavily than any other position. Bullishly, SMCI did gain over 12% today, nearly $100 per share. SMCI is on Hold.

 

Last update Mama’s Creations (MAMA) was a source of outsized gains. MAMA’s pace of gains has slowed, but not before triggering an automatic sale on May 30 when it traded at and above $7.18, double its original price. Per standard trading guidelines, noted at the bottom of the portfolio table, half the original position in MAMA was sold. MAMA shares have softened since reporting earnings on June 11, but this weakness is likely profit taking as we did. Reported revenues surged 29%. This is a solid number for a consumer staples stock. MAMA’s relationship with Costco also appears to be going well. MAMA is on Hold. 

 

After surging to new all-time highs in April, Reliance (RS) began to struggle as commodity prices began to soften and earnings missed analyst estimates. RS was stopped out of the portfolio on June 11 when it closed below its stop loss at $282.21. Excluding dividends and trading costs, RS was closed out for a 42.4% gain.

 

All remaining positions not mentioned above are on Hold. Please see table below for updated stop losses. Please note, the high level of cash in the portfolio is the result of market conditions and our seasonal based overlay we apply to the portfolio that is consistent with our Seasonal Switching Strategy for the major indexes. We are not targeting a specific percentage of cash allocation.