SPY wealth tracker as of May 31, 2017

May 31, 2017

SPY $241.44

SPY closed May still on a buy signal initiated March 31, 2016.

This makes 294 consecutive days in this trade…The model says take no action.

The 4,905 shares of SPY you held on December 31 @ $ 223.53 per share ( $ 1,096,415 ) are now worth $1,184,263….an increase of $ 87,848 ……. or 8.00% %. Add on dividends of 1.45% per annum.

Going forward, the case for this market moving higher rests on two assumptions.

#1 Assumption. That earnings yields will continue to be more attractive than fixed income ( bond ) yields.

#2 Assumption. That Donald Trump and the Republicans will continue to sustain a viable relationship.
This means, at a minimum, no nasty surprises ( criminal charges against Trump ) on the legal front.

The Republicans hold the key to Trump’s survival. Impeachment will not take place so long as criminal charges don’t overpower the lesser charge of inappropriate behavior. However, if the Republicans can’t turn their agenda into law, and blame it on the direction of the Trump investigation or his disruptive antics, they may consider it prudent to go after Trump rather than surrender their seats in 2018. But, don’t feel bad for Trump. He really is a Democrat ( without ideological portfolio ) who made a deal with the Republicans to hijack political power from them.

As of right now, only one piece of legislation has made it through the House, the Health Bill. Tax Reform, the Budget, Infrastructure, and Senate reworking of Health will have a major impact on whether the stock market will continue to be patient and await all the good things for business on which the Trump bump rests.

As bad as Trump is, in my opinion, the Republican ” promises” to themselves are worse. Their budget has been described as ” hateful ” and their assumption of 3% growth is grounded in fantasy according to some pretty knowledgeable lawmakers with deep budget experience.

So, the clock is ticking on jobs, jobs, jobs and all the other Trump promises because this market’s pricing assumes all will end well. If it doesn’t end well or begins to show cracks you can expect the market to let you know in no uncertain terms.

Working under SPY’s ” buy ” umbrella, I have sold Twenty QQQ put contracts @ $ 132 June expiry, Two Amazon put contracts, @ $840, expiry August and five Facebook @ $139, expiry June.

And, I have some long positions in the equities indicated below, none of which amounts to more than $10,000. Here, I am not following the SPY model… I following a BUY and HOLD and BUY MORE model when and if the market sells off heavily. CGNX, AMZN, GOOG, RTN, GS, WMT, COST, MSFT, NVDA, YHOO, MCD, WB, AAPL, HON, CRM, INTU, plus 2x larger long positions in ETFs ….RYH, ROBO,  TQQQ. I continuously monitor how QQQ relates to its 50 days moving average as separate from SPY and its 200 day support.

Richard Maurice Gore

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