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Another Strong Week Despite Friday Selloff

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• John and David Agree to Disagree on whether the midterm elections turn around the October 2018 market correction
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• New stocks added to the ZU portfolio
• And much more

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We were really hoping this market could end the week on positive ground, but there was bound to be some profit taking after Wednesday’s epic rally. More importantly though, Friday’s selloff did not ruin a strong week, as two of the major indices were still able to jump more than 2%.

There were a lot of things happening this week, but fortunately no real surprises. The midterms ended as expected with a split Congress and the Fed kept interest rates unchanged. The Committee also reiterated its plan for “gradual” hikes in the future, which may be disappointing to some investors but can’t be considered a surprise by anyone.

With some clarity achieved, stocks soared on Wednesday and kept most of those gains through a sluggish Thursday. But other uncertainties remain with no signs of being resolved anytime soon, including fears of an economic slowdown, rising rates and trade issues.

All of the indices came off their lows by the closing bell, but the NASDAQ still dipped by 1.65% to 7406.90 on Friday. The S&P was off by 0.92% to 2781.01 and the Dow slumped 0.77% to 25,989.30.

But for the week, the Dow jumped 2.8%, which actually beat last week’s solid performance of 2.4%. The S&P climbed by 2.1%. The NASDAQ has been getting beaten up a lot these days as tech continues to come under pressure, but it too managed to stay on the positive side with a weekly advance of 0.7%.

Even with a couple of good weeks, the editors are still wondering if the market can climb higher from here or if it needs to test the correction lows again. Who isn't a bit cautious after the damage done in October? With the midterms now out of the way and earnings season winding down, next week could be very important in deciding how the market will finish the year.

Today's Portfolio Highlights:

Technology Innovators: The market was pretty soft to finish the week, so Brian Bolan thought it was a good idea to take a big gain now ahead of the weekend. Therefore, he sold Twilio (TWLO) on Friday to secure a nice profit of nearly 23% in less than a month!

Surprise Trader: We’re reaching the end of earnings season, which means its time for the retailers to report. Dave thinks Nordstrom (JWN) is set for a surprise after the bell on Thursday, November 15. This Zacks Rank #2 (Buy) has a positive Earnings ESP of 6.92% for the quarter. The editor believes that lowered expectations for retail could also bode well for a nice beat. JWN was added on Friday with a 12.5% allocation. Read the complete commentary for more.

Counterstrike: Crude is now stuck in its longest losing streak ever! Jeremy wants to buy into it since there’s a potential for a good-sized bounce next week. He added a 4% allocation in Velocityshares 3X Long Crude Oil (UWT) today. The editor thinks crude could dip all the way to $57 before the rebound, so there’s room to add even more moving forward. Jeremy also decided to bank some profits during this weak session, so he sold ProShares Short VIX Short-Term Futures (SVXY) and Corning (GLW) for returns of 6.1% and 8.2%, respectively. See the full write-up for more on today’s moves.

TAZR Trader: So does the market need to test its correction lows, or just fill the post-election gap to embark on a Q4 rally? Either way, Kevin wants to prepare for the eventual rebound, so he added more to the portfolio’s position in ProShares UltraPro QQQ 3X Bull ETF (TQQQ). This is his favorite tech leverage play. Read the write-up for more on this name and the editor’s outlook.

Home Run Investor: It was exactly three months ago today that Brian Bolan added SendGrid (SEND), and the stock has certainly performed in the portfolio during a very difficult stretch. This stock has appeared on the Top Movers List regularly since news that it was being acquired by Twilio (TWLO). Given the soft market today, the editor thought it would be a good idea to sell the name and take a 42.6% return to the bank.

Have a Great Weekend,
Jim Giaquinto

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