Dog Days of Summer – Limited Time Only

by JDH on August 25, 2018

I have a sneaking suspicion that the Dog Days of Summer are done (a week early), and we are about to enter a very interesting period.  The game plan:

First, cash is king.  There are lots of stocks that are down, particularly in the gold sector.  If they stay low for a few more months, we will see a wave of tax loss selling, and that will mark the bottom for this cycle.  Keep some cash handy.

Second, pot is king.  With legalization happening on October 17, and full distribution in private stores happening in the spring of 2019, the cannabis stocks have a lot of room to run.  They were up big on Friday, and I see a lot more upside.  Buy quality stocks, and buy on down days, and build a full position prior to the end of September.  Time is ticking.

Third, we have not yet had a blow-off top in the markets, so that is still to come.  President Trump wants to win the mid term elections in November, so he will keep the train going, at least until then.  The big guys, like Amazon and Apple, should do well.

(Speaking of Amazon, I hold some shares, and on whatever day of the week they go up, I do a covered write, $15 out of the money, expiring on Friday.  Last week I did the covered write on Wednesday, they expired on Friday, and I pocketed $5.  I’ll take it).

Finally, gold is starting to stir, so gradually build the positions you want in good companies.

That’s the plan.  More next week.