Congratulations Mr. Discipline

February 14, 2021

Weekly Market Outlook

By Keith Schneider


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It was a good week for the Markets and with an NFC win (Tampa Bay), past information states that the markets tend to do better with a National Football Conference win.  Foolish?  Not really, with 74% winning odds of the NFC predicting a positive market the remainder of the year after a win. Wall Street wanted a Tom Brady win and got one.

Superbowl Yearly Indicator Forbes

What we at Market Gauge were most impressed by and have heard non-stop anecdotes about it, is the DISCIPLINE Tom Brady has in his life.  Any surprise that a 43-year-old can still be an effective quarterback in a young’s man league?

According to good sources including his friends, trainers and NFL commentators, Tom Brady has more discipline than most athletes.  He gets up early, trains, watches his diet, trains more, spends time doing flexibility and balancing activities and hits the hay at 8:30 during the season.

Tom is a disciplinarian, and it shows in not only his ability to continue playing long after others have been able to, but also his history of breaking statistics and his unprecedented 7 winning Super Bowls.  Discipline pays off and Mr. Brady is the best example we have seen in quite some time.

Why is discipline so important to us?  When we first started to convert our floor trading success to off the floor trading and then ultimately to our subscribers the most important part of our mission was to teach rules (a disciplined approach that will work well over time).  They include:

  • Consistency of following patterns, charts, various inputs, and our proprietary technical indicators like our Trend Strength Indicator (TSI) Real Motion and Triple Play
  • Having a plan before we recommend buying any security (stock, ETF, and Index) which will include the price to enter, the targets and the stops to mitigate risk
  • Never question or override the key decision factors so that we interject our opinion or personal political beliefs
  • Remember the two most important rules: 1) mitigate our exposure to losing money; 2) remember rule number 1
  • SELL without question when we get to target and need to peel profits off (we have seen these turn quickly against us) and SELL without question when a sell STOP is activated; no matter what we think of the ETF or Stock
  • We believe in concentrated portfolios in conjunction with superior risk control because that is the best way to exploit a critical statistical edge that has exited forever in the investing world

There are other rules as well, but these are the most important ones.  This has allowed us to do way better than any buy and hold strategy.

We agree with Mr. Brady’s approach, it takes hard work, toughness, being unemotional and strict discipline.  The difference is there is only one Tom Brady, but our motivation and intention is to turn all our subscribers, friends, clients, and followers from good to great investors.

Follow us and our different services and we think you can become the Tom Brady of the investing world. Use our successful formula and DISCIPLINE to capture more profits and more importantly, when the time comes, be risk averse and keep what you have made.

We are honored and privileged to work on your behalf.  Thanks for being part of the Market Gauge family.

Here are this week’s latest highlights:

  • Risk Gauges remain in full bullish mode with all key intermarket relationships gaining strength
  • The large caps within the Dow Jones Average (DIA) had an especially good week and there were 4 days of accumulation; we wouldn’t be surprised to see short-term consolidation begin.
  • Long bonds (TLT)have increased pressure, hitting highest yields since early 2020.
  • The rise in interest rates, food, and energy (especially at the pump) has created a dampening effect on Utility, Consumer Staples, and Consumer Discretionary stocks all vulnerable to higher interest rate and consumer costs
  • Grandpa Russell (IWM) led the rally in equity indexes, up +2.6% for the week and almost 16%c YTD
  • Utilities (XLU) and Consumer Staples (XLP) both safety plays were down on the week confirming the bull move in equities
  • Transportation (IYT) and Energy (XLE) also did well confirming that markets are expecting a reopening of the economy
  • Semiconductors (SMH) a key equity market barometer roared once again as chip demand is on a tear and many companies, including General Motors commenting that they are hamstrung from building cars because of a shortage in semiconductor chips for automobiles
  • Market Internals as the McClellan Oscillator remains on a positive footing, but the number of stocks hitting new highs has slowed down.
  • Volatility (VXX) retreated yet again and another close under 20 will confirm risk on and that the veil overhanging the market is being lifted
  • Growth stocks (VUG)have held its leadership position over Value (VTV) which is status quo and bullish
  • Gold (GLD) sold off once again flirting with recent low while crude oil (USO)rallied hitting levels not seen since early 2020. This may be the effect of a stronger dollar and speculative interest in Cryptocurrencies which is pulling investment dollars from the Gold bulls.
  • Emerging Markets (EEM), an inflationary play continues to lead the US benchmark the S&P 500

Have a great week.

 

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