A New Sunrise For Mr. Market

Q1 2019 mid-quarterly Market Update

Looks like an anticipated and hoped for reset, rest and revival of Mr. Market’s spirits is underway in Q1 2019. Looking ahead to Q2 2019 could be very promising. Let’s review this week’s update and consider a selection of charts from this update. One thing apparent is that “long” ideas are clearly in the lead, outnumbering sell/avoid ideas by a ratio of roughly 5 to 1. It’s not last quarter’s market - an alien sunrise is greeting us.

Below is a summary table of potential long and “short” ideas, arranged in order of rough “trend age”, their last weekly closing price and a “risk per share”. Imagine that Idea “X” has a price of 100 and the “risk per share” is say 5/share. $100/$5/share works out to a potential initial trade size of 20 shares, with an initial stop loss of $100 - $5 = $95. This is very simplified and might be distressing for those who require complexity as a proxy for certainty and conviction. It’s very primitive old school price following and risk awareness being shared here. There are other things that can happen if idea “X” continues to run in a profitable direction, a trader can then add to that position, while also over time gradually adjusting a trailing stop loss. But this should be enough for most folks to see ideas, charts and be reminded that many of these ideas could eventually be stopped out (and hopefully with something to show for the effort).

This sunrise won’t be like past ones. The leadership could be different and therefore active speculators’ trading books will not necessarily resemble 2018 at all.