Whaddya think? Are investors having a tough time making up their mind about the interest rates? A week ago they were going up. On Monday they weren't. On Tuesday they were. On Thursday they weren't. On Friday they were. Geez. If you don't know by now, there's no point in trying to outguess everyone else.
You know which group of stocks has been (unsurprisingly) not affected by the market's fear -- or lack thereof -- regarding interest rates? Micro caps. And to be clear, I don't mean small caps. I mean the sub-$300 million market cap companies that are so off the radar and so "in a vacuum" that it doesn't really matter what the broad market or the economy is doing.
Just something to think about if things go from bad to worse for the market as a whole.
Speaking of micro caps, one of our Featured Stocks is a micro cap that made a little noise today. Sack Lunch Productions (SAKL) was up 16% on Friday, mostly on the heels of some TV coverage. Specifically, Sack Lunch Productions CEO Richard Surber spoke with MoneyTV's Donald Baillargeon about its recent results. You can catch the clip here at the MoneyTV website.
SAKL remains one of our favorite growth stories.
James Brumley is a Freak
Before we get any further into today's edition, I have to let you know something. The Under the Radar Movers newsletter's lead analyst, James Brumley, is freak. Not in a bad way. In a good way. Nevertheless, his ability to land so many short-term winners is freakish. I'm glad I'm a subscriber to the URM newsletter.
Case(s) in point? Alphatec Holdings (ATEC), for one. The Under the Radar Movers team suggested buying it on Tuesday of this week. Thanks to today's 20% advance, the ATEC trade is now up 29% for URM members, and still appears to be going strong.
If it were just Alphatec Holdings I probably wouldn't even bring it up. It's not just Alphatec Holdings though. Under the Radar Movers members are also up 25% on Park City Group (PCYG). That was a trade recommended back on August 31st. It took a whole two and a half weeks to get there, and like ATEC, it appears to still be going strong as well.
And the list goes on. The URM service booked a 102% gain on Nova Lifestyle (NVFY) last week. That holding period was only three weeks as well. At the beginning of this month, the Under the Radar Movers crowd banked a 33% gain on a short trade -- a bet against -- Northern Dynasty (NAK). It's been uncanny.
That's not to say every single trade is a massive winner in just a few days. Clearly that wouldn't be realistic. I see a lot more winners than not, however, and some of those winners are huge. It only takes a few homeruns and even grand slams in a year's time to really add up. In the meantime, the broad market is just chopping along, not doing much of anything for anyone.
It's your call, but if your portfolio could use a few more +20% winners in a short period of time, I recommend becoming a subscriber to the Under the Radar Movers service today. I've never seen anything quite like it.
Fuggedaboudit
Last but not least, as easy as it would be to assign meaning to today's modestly bearish action, don't. Today was not only a quadruple-witching day and inherently skewed (with a bias for limited movement), it was a Friday of a confusing week, and a key interest rate decision is due in three trading days. If there was ever a good reason for a lot of volume but not a lot of net movement, today was it.
Here's the thing. Regardless of how meaningless today was, where we left off today is where we have to start the coming week, and how we start the coming week determines how the market is apt to respond to whatever the Federal Reserve has for us on Wednesday.
In other words, even with today's minimal meaningless movement, this is all leading up to something big in the middle of the coming week.
We still say the market needs to make a correction, and September is the perfect time to make it happen. We're quickly running out of month though, and if things remain on hold until Wednesday afternoon, we'll only have a few trading days left to dish out whatever pain is in order.
I will let you know that the usual September weakness generally bleeds into the first week of October. It's not until the ninth day of October things start to turn for the better. All the same, that only leaves about a two-week span for the S&P 500 to make what would ideally be a correction of about 7% (at least) from the recent high.
I know that sounds big, at least relative to other recent pullbacks. It's not that big though. A move like that would only push the S&P 500 a little below its 200-day moving average line, which is currently at 2059.
We think it's going to happen, but we're too chicken to pull the trigger until the support around 2123 breaks.
Something else James Brumley pointed out today that I wholeheartedly agree with... even if the initial response to Wednesday's interest rate decision is bullish, it would still be fairly easy for the market to quickly bump into a ceiling and roll over anyway. There's a whole swath of resistance around 2165. Just don't jump to conclusions.
The Under the Radar Movers newsletter talks about these matters in more detail, pretty much every day. If you want insightful market perspective in addition to some incredible stock picks, again, that's the way to go. I'm shocked they let people have it for less than a dollar a day.
Everyone have a great weekend.