Credit: Shutterstock photoOne month ago today, the market opened with the world still shocked that Donald Trump had won the presidential election. Stocks were supposed to completely collapse should this unlikely scenario prevail…but instead they rallied and haven't really stopped since. In fact, this was the best week since the election.
The S&P and Dow each climbed by approximately 3.1% this week, while also finishing at new highs for the third straight day. The NASDAQ jumped by 3.6% over the past five days for a second straight session at a new record.
This unbelievable market has some of the editors wondering when the other shoe is going to drop…but it wasn't on Friday. The S&P was up 0.59% to 2259.5, the Dow advanced 0.72% to 19,756.9 and the NASDAQ moved forward 0.50% to 5444.5. The big news next week will be the Fed meeting. In the recent past, this would be enough to threaten the rally, but the odds of a rate hike are now more than 95%! As long as there are no surprises from Yellen & Friends, there shouldn't be too much of a disruption.
There were winners all over the portfolios today. CME Group is the gift that just keeps giving to Options Trader , which pulled another triple-digit profit from CME options on Friday as Kevin repositioned back into the name. Steve continues to believe that money is being made too easily right now, so he sold or trimmed three positions with double-digit gains in each. On the other hand, ETF Investor doesn't believe it has to be so defensive anymore, so it also had a double digit winner in the session. Meanwhile, Options Trader , ETF Investor , Value Investor and Zacks Counterstrike all bought.
Double and TRIPLE Digit Winners
→ CME Group (CME) came through again for Options Trader ! Kevin decided to pull his four March 115.00 Calls for an impressive profit of 235% in exactly 1 month! But the editor is not done with CME, which still hasn't hit the price he's waiting for. Learn about the repositioning in the highlights section below.
→ Steve's gut is working overtime these days. Yesterday, the editor of Reitmeister Trading Alert sold a couple of names because he feels that things are just too easy right now. He did the same thing today…but with even more stellar returns. He got out of Thor Industries (THO) completely for a gain of 30.4% and also sold all of SPDR S&P Regional Banking ETF (KRE) for a 29.8% profit. He sold part of Boyd Gaming (BYD) for 15.1%. The portfolio is now at 85% long, but Steve hasn't ruled out buying THO and BYD again at lower prices.
→ With the market rallying out 2016, there's really no need for the ETF Investor to remain so defensive. Eric swapped out two of his more guarded picks on Friday for solid returns. Specifically, the editor sold Pacer Trendpilot 750 ETF (PTLC) for an 11.9% profit and got out of PowerShares S&P 500 Downside Hedged Portfolio (PHDG) for a 5.5% gain. Check out the highlights section below for the two new buys that replaced these names.
Today's Portfolio Highlights:
• Basically, Kevin started balancing the Options Trader 's bullishness on CME Group (CME) (as it gets closer to his short-term target) with the exposure (which has grown as the portfolio's profits have increased). So he sold the four March calls for a triple-digit gain (as mentioned above), and then repositioned into two March 125.00 Calls. He's pulling approximately $3000 worth of exposure and going back in with just $500; thereby catching more of the future upmove with far less risk. Remember, he is still looking for CME to hit $125/$127.50…and doesn't think that $150 sometime in 2017 is out of the question. Learn more about today's moves in the complete commentary.
• After selling two picks for solid returns (mentioned above), the ETF Investor has a couple open spots to fill. One of the new additions is PowerShares FTSE RAFI US 1000 ETF (PRF), a unique fund that weights stocks through four fundamental factors: book value, cash flow, sales and dividends. The result is a broad market fund that's tilted a bit toward value. It's top sectors include financials (21%), energy (14.2%) and tech (12.8%).
For his other buy, Eric is betting on the 'Internet of Things' idea. We all know that this will really take off sooner or later, and the editor believes that it could be a hot market in 2017. So he picked up Internet of Things Thematic ETF (SNSR) for the portfolio today. For now, this is the only fund in town to play the Internet of Things, but Eric was also pleased to see it offer a consumer component and some decent international exposure. Get more specifics on these new buys in the complete commentary.
• The Value Investor already has two picks from the banking sector, but Tracey really likes this space and doesn't think it's overkill to add one more. Therefore, the editor picked up HomeStreet (HMST) on Friday, which is a small cap savings and loan. The bank handles commercial and consumer banking, which has been on an upswing. Shares are trading around the 52-week high, but it's still seeing upside with a raised earnings estimate last week. Its price-to-book ratio of 1.3 is well below Tracey's parameter of 3, so it's signaling value. Plus, this Zacks Rank #1 (Strong Buy) company is stationed in the thriving West Coast. Read the full write-up for more.
• Did you hear that China is going to crack down on Macau? A lot of people saw that headline and sold any gaming stock with exposure to that region. The only problem is that the rumor was completely FALSE. Jeremy saw an opportunity to make some money for Zacks Counterstrike as these companies recover from the rumor, and he decided on an 11% allocation in Melco Crown Entertainment (MPEL). This Zacks Rank #1 (Strong Buy) dropped 15% at one point yesterday and has yet to recover completely. Plus, it reported a solid EPS beat last month. Read the full write-up for more specifics.
Have a Great Weekend,
Jim Giaquinto
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
