This daily e-letter is specifically designed to point out all the investors who are wrong.
We’re exploiting the mispositioning of the world’s largest investors, so we can profit from the ensuing unwind.
The great thing about this is that there is always mispositioning somewhere.
It could be in the U.S. stock market. It could be in individual stocks.
It could be in foreign stocks relative to U.S. stocks.
It could be in gold and precious metals.
It could be in bonds.
There is always an extreme somewhere.
And I’m here to point it out.
Not So Smart Money’s Bad Start
The Nasdaq just had its best May in 35 years.
And investors came into the month looking for a crash!
How great is that?
And macro hedge funds have never gotten off to a worse start.
That’s despite the historic May for the U.S. and record returns for many countries all over the world so far this year.
This index comes from Hedge Fund Research, an industry publication that focuses on hedge funds and the business of hedge funds.
About That Crash
Just seven weeks ago we were being promised a bear market, maybe even a crash!
As it turns out it was the exact opposite.
Everyone was wrong.
Shocker…
Here’s the Nasdaq100 putting up back to back positive months and now pushing up against new all-time highs:
Here is the largest component of the Nasdaq, technology, which alone represents over half the index.
Like the Nasdaq, the Technology Select Sector SPDR Fund (XLK) is also approaching new all-time highs:
This week we discussed semiconductors and how you can’t have any technology without chips.
Well, here’s the Mother of All Technology Indexes pushing up against new all-time highs while the index that owns the most tech is doing the same.
This is what bull markets are about.
I would encourage you to go back and study history.
Go and look at every bull market over the past 100 years.
You know what you’ll find?
Technology was a leader in almost all of them.
This time is no different.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs