How what airplanes I fly on affects the index’s near-term outlook, plus what TSLA is up to

By Jani Ziedins | End of Day Analysis

Jul 12

Free After-Hours Analysis: 

The S&P 500 set yet another record closing high, this time cresting 4,380.

We didn’t have any headlines driving the buying and instead, this was little more than a continuation of the market’s half-full mood. Investors continue seeing the sunny side in everything and are sweeping everything else under the rug.

How much longer can this complacency last? Well, the last meaningful dip (10%) was right before the 2020 election and that was more than half a year ago.

While bears will point to this long stretch of uninterrupted prosperity as proof the next fall is imminent. I look at it the other way. If we lasted 180 days without a meaningful pullback, what are the odds the situation changes tomorrow? (FYI, I also don’t mind getting on rickety old airplanes with rickety old pilots because if they lasted this long, they will almost certainly last one more flight. I fear the young and untested, not the battle-proven.)

No doubt this rally will stall like all of the other rallies that came before it. But don’t expect this reversal to happen in the middle of the slow summer months on zero news. Things could get far more interesting this fall as large investors return from summer vacation and start moving things around ahead of year-end. But until that happens, don’t expect much.

Keep holding for higher prices and lift our trailing stops. The worst thing that will happen to this market is stalling near 4,400. And you know what, that means a few down days are ahead of us so resist the urge to overreact to every bump in the road.

If a person fears a routine 2-3% pullback in the indexes, keep stops close and be ready to lock in some nice profits soon. If these minor gyrations don’t bother you, then keep hanging on and wait to see what comes later this fall.

TSLA popped following Elon’s testimony on Monday. He will take the stand again on Tuesday, but so far most investors like what they hear. And to be honest, a worst-case, $2 billion fine is pocket change for one of the richest men in the world. So while this makes for juicy financial press gossip, it really isn’t material to TSLA. (Some people think this will land Elon in jail. LOL)

Far more important than this trial is $600 support. Fail that and it could trigger another wave of defensive selling. But until that happens, last week’s bounce just above support is buyable. That said, this doesn’t get real interesting until it gets above recent resistance near $700, but so far, so good.

Keep holding TSLA for higher prices but always be ready to pull the plug if this falls under $600.

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About the Author

Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.