July 31, 2019

 07-31-2019 BL

The HCM-BuyLine Alpha is still strong, as you can see from the chart above. We see the market moving higher in Q3 and Q4, and any dips should be seen as a buying opportunity. We expected the Fed to drop rates a quarter of a point today because they have been signaling such a move for a few weeks. Bonds are in a nice uptrend as you can see on the chart below of the HCM-BuyLine Alpha overlaid on the bond market.

7-31-2019 Bonds

I was on the radio show “Straight Talk Money” this morning, with the host Chase Robertson of Robertson Wealth Management, a firm out of Houston Texas. Chase is a very astute manager and private equity advisor who strongly believes in risk management. He is always working to protect his clients when the next bear market takes hold. We were looking at the S&P 500, which is setting up a very nice cup and handle pattern as you can see from the chart below. This chart pattern has a strong track record of running higher in short order if it breaks out. If it does break out, and I believe it will, we could see 3250 on the S&P 500 by year-end.

07-31-2019 SPY

  • According to the initial, or “advance,” estimate of the gross domestic product, the economy grew at an annualized rate of 2.1% in the second quarter.
  • The first quarter saw the economy expand at an annualized rate of 3.1%.
  • The deceleration in the second quarter is due, in part, to downturns in domestic investment (-5.5%) and exports (-5.2%).
  • Within domestic investment, business investment fell 0.6% in the second quarter.
  • Consumer prices for goods and services increased by 2.3% in the second quarter compared with an increase of 0.4% in the first quarter.
  • Disposable (after-tax) personal income increased 4.9% in the second quarter, after growing 4.8% in the prior quarter.
  • Consumers spent more in the second quarter, as the personal consumption expenditures index rose by 4.3%, following a 1.1% advance in the first quarter.

For the week ending on July 20, there were 206,000 claims for unemployment insurance, a decrease of 10,000 from the previous week's level. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ending on July 13. The advance number of those receiving unemployment insurance benefits during the week ending on July 13 was 1,676,000, a decrease of 13,000 from the prior week's level, which was revised up by 3,000.

This week’s HCM Optimized Trend Indicator (OTI) stock of the week is Akamai Technologies, Inc. (AKAM). Yahoo Finance says “Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. It provides cloud security solutions, including Web Application Protector to safeguard Web assets from Web application and distributed denial of service; Kona Site Defender, a cloud security solution; Bot Manager to identify bots and categorize bots based on business or IT impact; Fast DNS, which translates human-readable domain names into numerical IP addresses; Prolexic Routed to protect Web- and IP-based applications; and Client Reputation that assigns risk scores to malicious IP address and enables customers to take action on individual clients.” As you can see from the chart below the OTI has done what we think is a fantastic job with this stock. The sell signal in July 2015, the sell in early 2017, and the two most recent buy signals are all particularly impressive recommendations. AKAM is trading up today around $88/share, and it doesn’t look to be slowing down. Way to go OTI!


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