I love it when a month ends on a Friday. We get fresh weekly and monthly candlesticks.
Monthly candlesticks are underrated.
I love having only 12 new data points per year. I love taking a step back and reviewing them all at the end of each month.
The process not only helps us identify the direction of primary trends. It gives us no choice.
It forces us to recognize which way asset prices are going.
And one thing we know for a fact is that asset prices trend.
This is especially true the longer the time horizon.
Market returns are NOT random. They do NOT fall under a normal distribution curve like you study about in school.
Asset prices trend. We know. We have the data.
And most investors pretend they don’t. I love that too.
Meanwhile, I also love the fact that the iShares MSCI USA Momentum Factor ETF (MTUM) just closed the week and the month at new all-time highs:
According to the fact sheet, MTUM tracks an index of large- and mid-cap U.S. stocks showing “higher price momentum.”
Top holdings in the ETF include names such as Nvidia (NVDA)… Tesla (TSLA)… and Palantir (PLTR)…
If Momentum is working, is that bad for stocks?
No.
Historically we know that high-momentum stocks making their shareholders money is NOT bad for stocks.
This Week in Everybody’s Wrong
On Monday, we introduced a key member of the TrendLabs team, my protege Sam Gatlin.
Sam’s looking East for leadership in a trend that could last for years.
Here’s why the Apple of China is greater than the Apple of the U.S.
On Tuesday, we took a look back at Memorial Day and why the sideline is rarely the place to be.
While America was closed, line go up all over the world.
Here’s why cash is not king and getting 4% is not as good as getting 24%.
On Wednesday, we asked whether “ARK-y” is an adjective or an adverb.
The answer doesn’t really matter, especially short interest in speculative tech stocks has reached record levels.
Here’s why we like the type of high-growth tech stocks ARK Invest founder Cathie Wood buys.
On Thursday, we explained how semiconductors are the railroads of the 21st century.
Semis are arguably the most important group of stocks in the market.
Here’s why Charlie Dow would love semiconductor stocks.
On Friday, I shared my experience meeting and sharing ideas with Wall Street legend Peter Borish.
Peter is the Michael Jordan of macro trading.
Here’s why I’m so excited about sitting down with Paul Tudor Jones’s No. 1 guy.
On Saturday, we took a trip back into my Twitter timeline to talk about how I put together my TrendLabs team.
Jason, Sam, and Grant are among the best in the business.
Here’s why I’m excited these guys are working for us.
Have a great Sunday.
I’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs