Written by: Mike Simonato, Ontario Presenter: “Investing for the Long Term, presented to the Feb. 6, 2021 International Online Forum, you can watch by CLICKING HERE.
I hope everyone is staying safe and enjoying time with family and friends.
Let me be clear right out of the gate, this week’s 2 cents is my opinion from what I see and nothing more. I truly hope that I’m 100% wrong and all turns out better than ever.
First with Covid (which affects markets in so many ways). As things open up, the numbers are rising once again, leading to many lockdowns and serious crises around the world. Many parts of Asia that did well up to this point are now in survival mode. This is important because this area provides the world the chips for car/ truck mfg, phones, bank cards etc. Anything that requires a chip, so this could lead to extreme supply chain disruptions ie Apple’s guidance (and they make their own chips)
Covid cases affect the workforce. Nobody can find anybody willing to work and the ones who show up are of little value in a lot of cases. My mom fell and broke her neck a week ago so needs 24-hour care for the next 2 months and yes no one is available to help at all. I talked to a really good carpenter, and he said all the trades he knows have quit and even I’m saying ‘not interested’ more than ever. I’ve had it with bullies and people who think disrespecting others is acceptable conduct.
There are differing views regarding inflation whether it is here to stay or will end soon. For now, the cost of living is high and people are in dire straights financially. As I said in a previous email, a big name financial planner said, “The gap between the haves and have nots is rising at a rate he’s never seen before”. A friend of mine says a grocery ad shocked her. It was for Ungraded Strip Loin Streaks out of Mexico for $9.99 lb. Last August when I recommended getting your house in order so you’re ready for what comes well I’m BBQing top quality strip loins I got for $5lb.
Do you hear the Canary singing? In my Feb International Forum presentation, I highlighted some good quality companies that have and should continue to stand the test of time. These companies continue to do everything right ie Apple $21 Billion in profit and a 50% jump in iPhone Sales. Amazon 3 quarters in a row of $100 Billion in revenue. This week Amazon started a brilliant ad campaign supporting Black-owned businesses. People are still shopping online in record numbers and paying largely with Debit and Credit, yet look at the week they had (See attachments) How about the mkt etfs how did they do (See attachments)
A Big-time Pro Trader once told me that when you see good companies being sold off during earnings season especially when the numbers are good, get ready for a correction.
For me, I see the storm clouds building.
Covid numbers soaring once again (affecting the supply chain and labour mkt)
Numerous weather-related events (BC worst air quality on the planet)
Govt and Individual Debt levels (Highest on record)
Attitudes of people and mishandling of so many key issues
Number of Bullish advisors soared this week while consumer confidence ie weakening
We are setting up for perhaps the worst Global Depression ever (I really hope not) or a New World where those who are willing to adapt will enjoy a Business climate and Quality of life we could have only dreamed about. Only time will tell how this plays out. For now, have your house in order, Be safe and be Very Smart and Cautious with any trading we are doing. Also, Read the Views. Amazing info every week
As always nothing more than my 2 cents and I hope it’s of value and interest.
Now for the Markets
DOW JONES: Price and RT are struggling at resistance lines
NASDAQ: Looked like it was going to soar but had a really bad week
S&P 500: Again failed at a resistance line for the last 3 months
MKT TIMING: Stuck at resistance as well
READ Views and Strategy
PTSE: Continues to fail at resistance RT Failed to get back into the channel
VENTURE: Respected the 200 SMA and had a good week with RT also rising but until we get a sustained break above the 79 SMA I’ll leave it for the nimble swing traders
MKT TIMING: Struggles at Resistance Indicators moved up this week
Read Views and Strategy
AUSTRALIA: Read Views and Strategy
BRITAIN: Read Views and Strategy C/UP Thurs C/ DN lasted 10 days
EUROPE: Read Strategy