Ten Year Treasuries Break 2.10%; Stocks Begin to Falter

We could very well go up from here and no one would bat an eye of indifference. Truth is, we have a remarkable situation set up with mortgage rates below 4%, gas prices down, stocks near record highs — and a willingness by the Fed to cut more if needed. What else could we ask for? Is this not the perfect scenario?

How to go wrong?

You can be wrong by investing in small stocks or heavily concentrating into one sector, or buying stocks that aren’t correlated to the broader indices. For example, if you’re only buying biotech or retail or oil stocks — you’re injuring your chances of success. To trade well in a tape as comfortable as this, simply buy what has been working — big capped tech, SAAS, avoid earnings gambits etc.

Also, if you’re only 5% weighted per stock and have exposure to all 8 sectors — you should perform better than the market. The reason why my Quant is doing so well is because it’s rooted in fundamentals and technicals. You need both. You can’t just go buying great charts without having some core fundamentals behind those charts, otherwise you’ll end up getting blindsided by a earnings debacle.

While I think the market is due for a pullback, I wouldn’t bet too much on that happening. What I would position into now, as I am doing so today and also yesterday — are value stocks. I’d tell you my picks — but that’s for Exodus members only. Sorry, new policy.

Value stocks thrive in a low rate environ.

On a another subject of note, gold is at $1,340 and threatening to break free of a 6 year consolidation pattern. Or, it can do what it has done consistently for the the past half decade — FAIL and drop back down lower again.