Stock Market Forecast for Tuesday, 4/30/24
Predictive SOFIS Signal, Equity Signals, Risk Levels, and Portfolios
Previous Stock Market SOFIS Signal
******* For Monday, 04/29/2024 *******
SOFIS Signal: LONG for Monday
SOFIS Allocation Level: 100%
Use with futures: MNQM4 or MESM4 (best performance)
Use with ETFs: QQQ or SPY (lower gain but lower risk)
******************************
Commentary on Signal for Monday
For Monday, I had said: “We now have a 'Core' signal that is in the LONG state, but there are NO overriding SHORT Rules, thus giving us a 'raw' LONG signal from our Model. With an EZ Indicator value of +4, we have a rather weak LONG signal, and especially in view of the fact that our legacy SYSTEM6 S&P signal has just gone Short. However, with no significant economic releases due over the next few days, and with the end of the trading month on Tuesday, this adds an element of positivity that tips the balance and gives us a SOFIS LONG signal. For the prudent SOFIS investor, a reasonable approach is to buy 1/2 of the requisite number of MNQ (or MES) contracts at 0500pm CDT today (Sunday), and then add the second half of contracts after approximately 0910am CDT, but only if the tech futures are stable or rising at that time.”
It was not a good day to make money since the Market had essentially peaked at the Open and meandered up and down from there. It would have been best to go to Cash at the Open and thus end up with a clean profit, but of course there was no way to know this. Instead, it was necessary to keep leverage use on the low side so that one could hang on during the dips. Our SOFIS strategy worked to yield slight gains in the IBKR accounts, but the 4 Collective2 strategies ended up with a mixed outcome, with slight gains in the MES strategies and modest losses (-0.5% or so) in the MNQ ones. It is typical of the Market in the day or two prior to a Fed announcement to exhibit indecisive behavior with little net movement. But, since the S&P and Nasdaq 100 did make gains for the day, our SOFIS Long signal was indeed proven correct.
Note that the use of the Substack APP is highly recommended. I am beginning to insert Tables and Graphs into my Posts, and these Data Wrapper-generated inserts require the interactivity of the APP to show up correctly; they do not work as well in a Browser, and the Tables are generally truncated so as to lose the last ‘n’ rows.
The Tech 6 Portfolio
Our Tech 6 Stock Portfolio provides a list of the 6 strongest Tech stocks, in order of decreasing estimated strength, and all of which are in our BUY state. If there are fewer than 6 BUY-rated stocks, then fewer stocks will be shown — or even NONE at all. This is consequently not only a useful trading portfolio, but it also gives a sense as to how strong the Tech stocks actually are, and by extension how robust the overall Market is likely to be at the current time.
Our 6-Slot Tech portfolio is now 66.7% LONG, i.e., there is/are 4 suitable tech stock(s), thus filling 4/6ths of the Portfolio. However, it is advisable to heed the SOFIS Market signal (shown below) before investing in this slate of tech stocks. In other words, if the SOFIS signal indicates a Cash or Short state, then it is prudent to avoid holding any tech stocks on that day, nor should new ones be bought!!!
6-Slot Tech Reference Portfolio
Slot# Next Description
1 NVDA NVIDIA ORD D RD TIONS ORD RNAT
2 GOOG ALPHABET CL C ORD M REDEM SRS D
3 AMAT APPLIED MATERIAL
4 TSM TAIWAN SEMICONDUCTOR MNFTG ADR
5 *** CASH HOLDING ***
6 *** CASH HOLDING ***
!!! LONG PERCENTAGE (#ACTIVE STOCKS/6): 66.67%
Notes for 6-position Tech Stock Portfolio:
(01) A 'universe' of 18 tech stocks is used for this portfolio, thus limiting to the largest and most popular companies, and which are in the BUY state.
(02) The trading account should be roughly subdivided into 'n' (6) equal parts.
(03) Each "part" (slots) will then be allocated to a single tech Stock, or, left in Cash if NO SUITABLE stock is found for that day.
(04) Each "slot" will thus always be either Long or in Cash.
(05) Hedging is thus naturally achieved by the fact that a 100% investment will only occur when 6 tech stocks are found that are in a strong BUY state.
(06) There will then be times when the portfolio is totally in Cash (no LONG positions).
(07) The trader may also choose to FURTHER REDUCE the number of active positions whenever there is a 'Caution' issued for the day in the Daily Forecast, i.e., only filling 2 or 3 slots instead of the suggested 4, 5, or 6.SOFIS Signal and SUPER 8/SUPER 15 Stock Portfolios.
SOFIS Signal and SUPER 8/SUPER 15 Stock Portfolios
[The detailed Forecast for the next Market day is discussed below]
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