Weekly Models Update - Wildcard Week 🃏+ Defense Stocks Relative Strength

Weekly Market Model Update for June 13th

Welcome to the weekly report! This report is targeted at investors that don’t have time to monitor the ebbs and flows of the market day to day and still want to beat the market and avoid bear markets🚀. Just 10 minutes a weekend is all it takes.

I focus on the MAJOR themes and the MAJOR trends of the markets in this report. All the models I present are back tested with results so you can see that they work🤔.

This post is long - so make sure you read it on the Substack App or Website so you get to see the bottom of it - Email can often cut the message short. Let’s get into the weekly models!

What Happened This Week

This week we took a veer straight into the unknown and got a full-blown war started in the Middle East. 💣💣 It would appear to be more or less condoned by the US Administration and at the moment shows no signs of stopping. Wars are unpredictable, so I would caution anyone with any kind of forecast that this or that is going to happen to politely acknowledge we don’t know what’s going to happen.

I’m a big fan of using data to understand what is going to happen next. But in the case of this particular event, it isn’t a great idea. We are going through a major generational turning and unfortunately past isn’t going to be prologue here.

The Elon / Trump soap opera had a minor plot twist this week with Elon apologizing to Trump for burning him down last week. We’ll see if that matters much. Poor conservative media outlets were struggling to spin the conflict and make it make sense for Mom and Pop. 🤷‍♀️

TSLA 0.00%↑ stock got whomped on the news, but really it just resulted in Mom and Pop exiting on the panic, and hedge funds and institutional investors picking up the shares on sale. We can see that with the arrow marked “1” here. I noticed quite a few people upset with the selloff there, but it looked like a good spot to trade it to me because of the two VWAPS sitting there around 280. It resulted in a great bounce and now it’s stuck at the other VWAP up there (the purple line, marked “2”). That’s the monthly VWAP and it’s going to be difficult to get that resistance broken until we have Monthly Expiration. 📝

TSLA Stuck at VWAP Resistance After Finding Support

The big thing that I noticed on Friday was the action in the bond markets. Bonds were down 1+% as oil prices went up significantly. Bond markets are struggling right now for a variety of good reasons we’ve covered extensively (none of them getting any better). The Dailies on the bonds look like they are actually starting a longer-term rally to me. We found support at the purple VWAP even on Friday, so I’m not going to get too bearish until that breaks down. The momentum indicator is actually over the top band now, which indicates high probability of a trend up move.

Despite Down Move Friday, Bonds Trying to Rally Here

Weekly Show and Tell

Each week I review a chart or model that I would normally keep behind the paywall, I hope you can make a couple bucks off of it! 🤑

This week we will review one of the relative strength screens we supply weekly to subs and point out a sector that we added last week (BEFORE the Israel Strike). Defense stocks. They are currently showing plenty of relative strength now.

Defense Stocks Relative Strength Model

These models are useful for finding new areas of the market showing relative strength. In this particular case, these stocks are pretty overbought right now, so I’d wait for some kind of pullback to buy it (we said same last week to subs), but there are quite a few areas of the market that are showing relative strength that are buyable now. We highlight these areas every week for subs in a very easy to read table format. Some off the radar countries and sectors we have flagged recently include Mexico (up 11% in two months since we flagged it) and FAN (up 7% in a month since we flagged it).