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Wall Street’s Best Dividend Stocks 308

Market volatility declined somewhat, leaving us at about the same level we were at the time of last month’s issue. The Federal Reserve—while still indicating it will most likely raise rates in June due to creeping inflation—left them alone last week. Coupled with steady economic improvement, including stable employment (the unemployment rate for April dropped to 3.9%) and improving consumer sentiment, the maintaining of the rates helped allay any market jitters that Washington’s continued schoolyard fighting may have caused.

Wall Street’s Best Dividend Stocks 308

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Market Views

Bullish

The Dow successfully tested its lows Thursday and made a bullish tail, and then closed up strongly on Friday. The Dow has been consolidating into a 4-month Head & Shoulders type reversal pattern since late January and we expect it to break upward through the downward sloping trend line at about 24,500 level this week or next—a BULLISH OCCURRENCE, and then it would be in a position to challenge the historical high of 26,500, which was set in late January, and this could result in a new Dow high by the end of the year—sooner than we expected.
Joseph Cotton, Cotton’s Technically Speaking, www.cottonstocks.net, 727-289-4436, May 7, 2018

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Small-, Mid-cap, and International Stocks Attractive

The FAANG stocks seem to have run out of steam. They have been at current levels for two months now. While they aren’t going down, the mania for them seems to have faded a bit. I think that it is time to focus elsewhere. There is no need to sell these unless they start to behave badly, just investigating potentially greener pastures elsewhere. Stock picking in mid-cap and smaller stocks is where I think the rewards will be.

The gold stocks have resisted the recent pullback in bullion, a very interesting positive divergence of the sort we haven’t seen for a long while. The Oil Service stocks are lagging the gains in crude, as is natural gas. I just can’t get bullish on the sector. A surge in the dollar has carried it back to last year’s levels. I’d use this strength to buy some international stocks.
John Bollinger, The Bollinger Band Letter, www.bollingerbands.com, 310-798-8855, May 5, 2018

Keep Your Powder Dry

Investors should keep most of their powder dry until the market fully corrects its internal imbalances. Eventually, this will almost certainly happen given the favorable stock/bond yield relationship discussed here. The main impediment holding back the stock market from rallying isn’t a 3.0% T-bond yield, but the fear factor behind the rising bond yield trend. Investors will eventually work through this fear once it becomes apparent that higher Treasury yields are a consequence of a stronger economy and not, as many pundits believe, a sign of onerous inflation.
Cliff Droke, Momentum Strategies Report, www.cliffdroke.com, 707-282-5594, May 5, 2018


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The next Wall Street’s Best Dividend Stocks issue will be published on June 13, 2018
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