The Fish Analogy

Investors,

This will be one of my shortest, but most effective, newsletters ever.

With the S&P 500 and the Nasdaq-100 making new all-time highs this week, an obvious sign of confirmation that we are still in an uptrend/bull market, I found a variety of different sector, industry, and thematic ETFs that secured their highest weekly closes of all-time.

Just look at the chart above for the S&P 500, showing base breakouts to new highs…

New all-time high weekly closes don’t happen during downtrends, folks.

In fact, they exclusively happen during uptrends.

Here’s the list of what I found, though I’m sure there are plenty more…

• The S&P 500 ($SPY)

• The Nasdaq-100 ($QQQ)

• The Nasdaq Composite Index ($ONEQ)

• U.S. Total Stock Market ETF ($VTI)

• The S&P 500 Top 50 ETF ($XLG)

• The S&P 500 Top 100 ETF ($OEF)

• The S&P 500 Top 100 Equal-weight ETF ($EQWL)

• The Russell 3000 ($IWV)

• The Russell 1000 Growth ETF ($IWF)

• Communications stocks ($XLC)

• Technology stocks ($XLK)

• Industrial stocks ($XLI)

• U.S. financial stocks ($IYF)

• Expanded technology ETF ($IGM)

• Equal-weight technology ETF ($RSPT)

• Growth stocks ($VUG)

• Mega-cap growth stocks ($MGK)

• Semiconductor stocks ($SMH)

• Cybersecurity stocks ($CIBR & $HACK)

• Broker-Dealer & Securities Exchanges ETF ($IAI)

• U.S. Aerospace & Defense ($ITA)

• U.S. Momentum stocks ($MTUM)

• Next Gen Media & Gaming ETF ($GGME)

• Catholic Values ETF ($CATH)

• The 80/20 Allocation ETF ($AOA)

• God Bless America ETF ($YALL)

• High-Beta stocks ($SPHB)

• Water stocks ($PIO)

I could continue, but I think you get the point by now…

Various sectors.

Various industries.

Various investment themes.

But one simple truth: U.S. stocks, across the board, are making new all-time highs.

You have a choice as an investor, recognizing that new highs happen during uptrends:

• You can align with this ongoing uptrend

• You can fight against this ongoing uptrend

You have the right to make whichever choice you see fit.

For me, it’s an easy decision…

I’d rather be a salmon swimming downstream vs. a goldfish trying to swim upstream.

Why take the hard road as an investor when you don’t get bonus points for difficulty?

Returns are returns, regardless of how simple/complex the strategy was to make them.

Our goal as investors is simple: make returns and keep them.

That’s the name of the game.

In that sense, simplicity is always better than complexity if returns are equivalent.

Yes, I was defensive in February.

Then I was bearish in March & April.

Then I got bullish again in May.

I had no interest in trying to sell the top and re-buy the bottom.

I only had the intention of aligning with the trend, recognizing that the trend could shift, and relied on statistical indicators to objectively define the nature of the trend.

Simple and effective.

So as I look at the market today with a preponderance of evidence proving that the U.S. stock market is in a broad-based uptrend, I have no choice but to continue aligning with this uptrend, as I have since May 2nd.

In fact, since May 2nd, these are the returns of some of my top holdings:

• Cloudflare ($NET): +58.4%

• CrowdStrike ($CRWD): +15.8%

• Meta ($META): +28.2%

• Amazon ($AMZN) +17.4%

• Intuit ($INTU): +24.6%

My largest individual stock market position, Palantir ($PLTR), was up +27.4% before Friday’s -9.4% decline, now up +73% YTD.

I told investors throughout the month of April that I’d rather be “late and right” vs. “early and potentially wrong” with respect to the stock market, which is why I waited for statistical proof that we were back in uptrend behavior.

This proof became evident on May 2nd, I changed my bias, and I’ve let winners run.

It’s not complicated.

It’s not rocket science.

But it’s simple & effective, which has allowed me to drastically outperform the market.

Again, the game is simple: make and keep returns, regardless of methodology.

If you’ve struggled in this market, contact me and we’ll get you back on track.

Best,

Caleb Franzen,
Founder of Cubic Analytics

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DISCLAIMER:

This report expresses the views of the author as of the date it was published, and are subject to change without notice. The author believes that the information, data, and charts contained within this report are accurate, but cannot guarantee the accuracy of such information.

The investment thesis, security analysis, risk appetite, and time frames expressed above are strictly those of the author and are not intended to be interpreted as financial advice. As such, market views covered in this publication are not to be considered investment advice and should be regarded as information only. The mention, discussion, and/or analysis of individual securities is not a solicitation or recommendation to buy, sell, or hold said security.

Each investor is responsible to conduct their own due diligence and to understand the risks associated with any information that is reviewed. The information contained herein does not constitute and shouldn’t be construed as a solicitation of advisory services. Consult a registered financial advisor and/or certified financial planner before making any investment decisions.

Each investor is responsible to understand the investment risks of the market & individual securities, which is subjective and will also vary in terms of magnitude and duration.