Everything seems good right now…or does it. As most of you know, the S&P500 A.I. SmartFolio (aka tactical model) is currently OUT OF THE MARKET. This specific circumstance happens because the risk is no longer worth the reward.

However, look for the S&P500 SmartFolio to buy the market in the future and place a proximity exit stop. The market has been bullish for apparent reasons. The number one reason is the influx of liquidity from all branches of government. It is not more complicated than that. Currently, the S&P 500 SmartFolio Year-To-Date has fallen behind the market because risk to reward this year has been lacking. This behavior is regular when you use A.I. SmartFolio technology to protect your investments from downsides of -10% or more. This type of “machine learning” risk management model has shown to be efficient for building long-term wealth. I want all iFlip users to pay attention to this in the weeks to come.

The recovery A.I. Smartfolios – RedOil and SPY I – are on pause but remain exposed to the market. Most of these stocks are at post covid highs. Currently, risk-reward is good, but these portfolios will likely simmer through the summer, waiting for Europe and the rest of the world to embrace that covid can be managed successfully without lockdown. When lockdown restrictions ease up, we will look for oil, travel, and leisure to resume recovery movement.

In contrast, lockdown restrictions favor the technology stocks such as the FAANG, who have put on a 10% rally. “Big Tech” services remain high when we are all forced to remain isolated. I will opine that these stocks will stay near the tops of their ranges in the immediate future but remember that they have been here for the last eight months.

As summer approaches, the market will likely keep a bid on all stocks but a predictability basis. It is nice to know that downside protection does exist even at such seemingly lofty levels. Until next week.

Happy Investing,

Kelly, CIO and the iFlip Team