June 2nd 2025: The beauty of our methodology is 100% of the decision-making is based on factual and historical data

"Performance is important, but Process is critical." - Mike Turner

AT THE BEGINNING OF THIS WEEK:

This morning, the market opened mixed and, as you know, all that means is we have the week's opening price. Next, we wait until we have the end of the week's closing price. If the EOW (End Of Week) is higher than the BOW (Beginning of Week), then we know that this was a bullish week. If the EOW is lower than the BOW, then we know that this was ("was" is a very important word) a bearish week.

While these two datapoints are important, they are only a part of the explicit rules-based decision-making that we go through each week regarding: 1) When to get in... that was decided well over a month ago; 2) How to be in the market (bullish strategy or bearish strategy or sitting on the sidelines... currently in a bullish trade); and, 3) When to exit to the sidelines. All of this process is 100% determined from historical data. Not a single decision is made based on what we or anyone else 'thinks' will happen in the stock market in the near or mid or long-term economy and/or stock market.

The beauty of this methodology is 100% of the decision-making is based on factual, historical data. Not one aspect of our approach is dependent on any guessing or hoping or fearing what might or might not happen in the future.

Here is all we (and by extension, you) need to know...

1. Where the market is, and

2. How it got there (the trend it is in at the current time), and

3. Knowing that it is mathematically absolute that the current trend in the market will last until it HAS ended.

When you next play golf with your buddies... or grab a lunch with your best friends... and if, by chance, someone asks, "What do you think is going to happen in the market with all this tariff stuff and upheaval in Israel and Russia and the Ukraine and China and the fight in Congress over Trump's budget???" You can say, "I'm all in the market right now and couldn't care less about how all those things might impact the market. I am, of course, concerned about those issues for a lot reasons, but NOT with regard to my money in the stock market. I'm following a methodology that puts my money to work when we are in a bullish trend (which we are at the moment); moves me to cash and safely on the sidelines when that trend has ended; and, amazingly, puts me back into the market when the next trend has begun (bull or bear) where I am making money in bull markets or bear markets... I never have to worry about the what-if's in the world when it comes to my money in the stock market."

Here's to the current trend continuing... the longer, the better, but we are already well above our exit which will get us out with a very solid profit in this current trade if we get an exit signal on Friday.

THE NOISE:

By Alex Goodwin, Vice President

The indexes closed on Friday showing notable gains for the shortened trading week. Stocks opened nicely higher on Tuesday on increasing consumer confidence and easing tariff tensions. The indexes ended the week with some notable volatility after NVDA reported a nice earnings beat. On this news the stock market pushed higher, however, by the end of the day the gain had been more than cut in half. And we certainly couldn’t go more than a few days without some tariff drama… On Friday Trump announced that China had “totally violated” the current tariff agreement between the two countries, and as a result the market sank to lows of more than 1% for the day, but the market did recover and finished close to flat for the day.

Last week’s volatility showed some similarities to the volatility seen earlier this year; the only difference was the market closed up for the week instead of down. Investors appeared to have confidence in the bullish momentum continuing through the summer. Much of this confidence came from bullish earnings forecasts from large corporations like Nvidia and Salesforce.

The Federal Reserve, specifically Jerome Powell, and President Trump have continued to butt heads on monetary policy. Trump is advocating for lower rates immediately, frequently stating that JaPo is “too slow”, but Powell has both maintained interest rates and stated that monetary policy decisions must remain “careful, objective, and non-political” in nature. Only time will tell us who would have made the correct decision, but it is clear that neither party will be backing down from their stance anytime soon.

This week the market looks to continue its bullish momentum. It is expected that Trump and China’s Xi will meet this week to discuss the apparent “violation” of the trade agreement. We will also see the beginnings of May economic reporting, as well as comments from the Fed on their current monetary policy stance. As usual it is almost certain that one or more of these events will swing the market in the bullish or bearish direction, but what we know is that on Friday at market close we will know precisely if the market trend has remained intact, or if it has ended, and we will make our trading decisions based on that data point alone.