Investment Commentary & Outlook - July 12, 2017
The June technology sell-off naturally rattled a lot of investors. This correction was very technical in nature and was partially triggered a few weeks ago when Nvidia (NVDA) gapped up as analysts raised their price targets, and as the stock essentially went parabolic on June 20th, some traders thought that it was time to take short-term profts in technology. Most of the technology sell-off was controlled by the algorithms that control short-term trading and High Frequency Trading (HFT) order ﬂow. Since then, the technology heavy NASDAQ 100 (QQQ) has been having multiple retests of its near-term lows for a few weeks, and it appeared brieﬂy that the technology sector had exhausted this technical selling pressure as trading volume dried up. Unfortunately, the European Union then imposed a $2.7 billion fne on Google, so the NASDAQ 100 (QQQ) then broke into new near-term lows and now the technology sector may have to retest its new lows again. We must stress that when technology stocks correct, money is not leaving the stock market, it is just being reshufﬂed to other industry groups, like the embattled energy and fnancial sectors. These rotational corrections are the best kind of corrections, so there is no need to panic. (Please note: Louis Navellier and his family does currently hold a position in NVDA. Navellier & Associates does currently own a position in NVDA for client portfolios.)
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Fortunately, we have some good news about July, since it is a seasonally strong month. Our friends from Bespoke pointed out that in the past 100, 50, and 20 years, the Dow Industrials have risen an average of 1.44%, 0.79%, and 1.08%, respectively. Furthermore, according to Bespoke . . . read more