1 2 The technology sector has been a huge outperformer for well over a year. If you were to take a ratio of the tech-heavy Nasdaq 100 to the S&P 500, you would see the trend in the relative strength highly favor the Nasdaq since the December 2018 low. It’s not exactly unusual to see technology lead in a bull market, but that’s not exactly what we’ve been experiencing. However, the predominance of a handful of tech names have weighed heavily on the market and has led to this dynamic. As you break down the Nasdaq, you can look at the percentage of stocks above their 20-day, 50-da...

1 2 As many parts of the country look to partially reopen after May 1, the opportunity appears to be filtering down to the retail space that has been hit hard. Since April 3, 2020, the SPDR S&P Retail ETF (XRT) has underperformed the S&P 500 by nearly 15%.  That certainly makes sense given the fact that many stores are closed and may see earnings get hit hard if we enter a major recession. However, like many stocks, the market oftentimes looks at the change in expectations as a reason to buy, and opening stores sooner rather than later may change near-term expectations. As you...

1 2 As you look at the major market indices, the movement is being dominated by a handful of stocks. You can probably reel off their names by heart because you probably use their devices, software, shopping platform or social media app. These behemoths are the market, and so when the market goes down, these stocks will likely lead it lower. As a result, trying to look behind the scenes at companies that don’t drive the market can be significant. Since indices typically use market capitalization as a measure to weight the individual stock weight, you can use market cap to find smaller ...

1 2 A real estate investment trust is a company that owns, operates or finances real estate. The corporate structure is a pass-through entity for tax purposes as investors pay taxes and not the company. One requirement of the REIT to keep this status is that they have to pass through 90% of the company’s taxable income as dividends. This feature is attractive for investors seeking current income and it helps the REIT attract capital for investment in real estate projects or other investments. Like stocks, REITs fall into different sectors of the economy, but are all classified as REIT...

1 2Traders should take advantage of market fears to buy these names on sale. We’re firm believers that investing is most successful when it’s most businesslike. One way to do that is to find companies that are attractively valued, and then buy them when they’re on sale. It’s a lot like buying groceries and taking advantage of the occasional offer that allows you to stretch your dollars further. Of course, in the real world, it’s tough. Our emotions come into play. But we need to set those aside and look at the facts. Market fears come and go, and the market may be more than halfway throug...

1 2Heavily shorted stocks are susceptible to large rallies, even if their fundamentals don’t justify them.Shares ofTesla Motors (TSLA) have nearly quadrupled in the past six months. While it may be a bit late to get in at a reasonable price there, the fact remains that the company was controversial. Some saw the move as overdue, and others think the move is crazy. One way to tell that there was this controversy was with the company’s short interest. Stocks with high short interest can be prone to big moves higher. Why does a heavily shorted company suddenly shoot higher? It has to do...