Investor Focal Points To Start 2021

Welcome to another trading week!! In appreciation of all of our daily readers of content, we offer the following excerpts from our Weekly Research Report. Our weekly report is extremely detailed and has proven to help guide investors and traders during all types of market conditions with thoughtful insights and analysis, graphs, studies, and historical data/analogues.

Research Report Insight #1

For the week that was, the best performing sectors proved a mixed bag, but largely with a defensive slant. Utilities (XLK) led the way with a 2.43% weekly gain, while Consumer Discretionary (XLY) still managed to carry its momentum into year-end.

In our December 13, 2020, Research Report, I discussed the Utilities sector ETF relative performance, suggesting there may prove some further outperformance when compared to the S&P 500 near-term. Ideally, this isn’t really what we want to happen, but for the sake of identifying some probable market rotations during an increasingly overbought market trend, it’s always useful to maintain appropriate market expectations.

Here is what I offered previously:

“The reality is that Utilities have been relatively weak for quite some time. This past week’s outperformance may have legs near-term, if not into year-end.

The Utilities/S&P 500 ratio is bouncing at 20-year support levels for the second time this year. The long-term relative performance is nothing worthy of admiration, clearly, but if you’re looking for a “rental ETF” this may fit the bill. Remember, everyone hated Energy and Financials, until they didn’t.

Research Report Insight #2

Recall my touting of the 2020 markets’ potential rebound, given the likeness off of the 2009 March lows (tweet/chart above). I identified the potential rebound as early as May 2020 and promoted, followed, and updated the 2009 analogue for members since May. As I continued with the likeness through August 2020, I also recognized that if the full extent of the 2009-analog was to play out in 2020, the S&P 500 would achieve 3,761 by year-end. I don’t think I need to say anything further with respect to knowing your market history. I don’t think I need to encourage investors further with respect to always maintaining an optimistic outlook on markets, but rather extending one’s time frames for returns when drawdowns arrive. I don’t think I need to restate that bear markets typically provide investor education, and should be engaged for that educational value at least. So without thinking any further, I’ll simply say that history has proven a useful tool for investors, once again, and bear markets are typically like Amazon “flash sales”; they should be viewed for the value they deliver!

Research Report Insight #3

With the aforementioned in mind, I will offer this: The last time we witnessed a similar yearly candlestick end like that of December 31, 2020, while still in an uptrend, was in 1982.

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