August 20, 2017
Good Day Traders,
One of my goals for the Active Trend Trading service is to continue refining my processes of providing excellent information to all members. To achieve this objective providing a correct balance of actionable information in both written and video format is important. Moving forward all members will have access to this update that will include editorials from Mike’s Macro Market Musings, the Art and Science of Active Trend Trading Updates (replacing weekly Report).
Actionable Intel, including trigger and alerts will be provided via On the Radar and Final Hour weekly Webinar’s and Videos available to Premium Members. Premium Members will also receive Text and/or Email Alerts on all trade orders used for the 3 Strategies of Active Trend Trading. Plus, mid-week Premium Training on Wednesdays.
Art & Science of Active Trend Trading Update – More on Overvaluation
One of our longtime ATTS members forwarded an interesting article about Overvaluation that goes hand-in-hand with Mike’s article from a few weeks ago. Here’s a few snippets from the article which a can be found at: https://stockcharts.com/articles/chartwatchers/2017/08/market-is-very-overvalued.html
The Market is Very Overvalued by Carl Swenlin
The market has been rising ahead of earnings for over two years, and it is very overvalued. Nevertheless, bullish investors seem unconcerned. The chart below shows the S&P 500 Index (black line) in relation to where it would be if it were undervalued (P/E 10 – green line), fair value (P/E 15 – blue line), or overvalued (P/E 20 – red line). The current price is far above the overvalue side of the range, because the S&P 500 has a P/E of 24.
Earnings growth through 2018 Q1 will bring the P/E down to 21, but only if price goes no higher. If the bull market advance continues, overvaluation will continue to be a problem…
…The market can stay overvalued for years, so market valuation is not a timing tool; however, it should be a consideration when making investment decisions. Currently, valuation is unfavorable.
As Carl says, the market can stay overvalued for years–our objective: Trade the System and let the charts tell us which way to go!
Running List & Strongest Fundamental stocks on the IBD 50 for August 18th
Look for more earnings excitement next week as other leading growth stock report. Will the market continue to demonstrate a mixed behavior? we shall see!
Running List: 170 growth stocks have appeared on the IBD 50 in 2017. Only RHT was added to the IBD 50 this week. Here is the total In and Out list, download the full list here: Running List 8-18
Additionally, when the new IBD 50 list comes out twice per week I conduct a fundamental sort which results in the top fundamental IBD 50 stocks being identified. The top fundamental stocks for this week are: NTRI, ATHM, ANET, BABA, YY & NVDA. This sort is provided at: IBD 50 8-18 Sorted
Lastly, to sign up Free Webinars for this week:
After Market Monday Webinar: GO HERE
How to Make Money Trading Stocks & ETFs Webinar: GO HERE