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This is the weekly version of The Prime Wave. The weekly is free for all subscribers, daily updates of the Swingex Index are reserved for paid subscribers only.
THE BIG IDEA
The stock market is, by nature, a forward-looking entity. The biggest fortunes are made not by the best traders, but by those who most accurately saw the future. This classic 60 Minutes interview from 1997 is a good (and humorous) example.
Having said all that, today is the last day of the first half of the year. So let’s stop and take a look at how it’s going for the stock market.
The S&P 500 is up 5% so far this year which would work out to an annualized rate of 10%. This is a little amusing, isn’t it? After all the tariff drama earlier this spring, we are now on track for a pretty ordinary year.
Over long-ish periods of time, some types of stocks are going to do better than others. Here is a short review of some other important subgroups:
Index | YTD % |
|---|---|
S&P 500 | +5.0% |
NASDAQ 100 | +7.2% |
Russell 2000 | -2.0% |
Magnificent 7 | +2.1% |
S&P 500 Equal Weight | +3.3% |
Healthcare sector | -1.8% |
“Median” stock | -1.8% |
So the typical investor may be up a little or down a little so far in 2025. Any of this is better than it might have been during the one-man bear market from a few months ago. It all almost feels like it never happened.
The people who are worse off today are those who panicked during the, uh, panic. Some of them are individual investors, some are professionals. All of them are now trying to catch up with the market. It partly explains the slow creep up in the market recently.
At swingex.com we don’t make macroeconomic forecasts or make long-term projections about where the stock market will be. Will the one-man bear market come back to life? Will the TACO strategy continue to work? Will the impact of higher tariffs be worse than currently expected? Or will it be less than expected? Will the Wild West vibe of the market continue?
We don’t know. Nobody knows for sure, though some will guess correctly.
Even our own Swingex Index, which looks only three weeks into the future, has been near neutral for most of June. Most of the inputs into the model are at moderate levels. Those that are not, are cancelling each other out.
SEEN ON THE INTERNETS
Numerous foreign markets have had some eye-popping gains so far this year. Some are up 20%, 30%, even 40%. Walter Deemer reminds us that these foreign stocks are really just returning to their long-term average. Will they finally break through? Or will the downtrend that started during the Great Financial Crisis continue?
Outsized percentage gains and losses can happen when numbers are at low levels. The performance of foreign stocks has been fantastic in percentage terms, but it hardly shows up in the big picture.
Maybe it means they have much further to run. OTOH, the slightest downturn can turn into a big percentage loss.
NUMBERS ONLY
9 | Only 9 days remain until the current “deadline” for countries to make a deal with the U.S. on tariff rates.
|
5 | Five of the 30 stocks in the Dow Jones Industrial Average made an all-time high on Friday: Cisco Systems, Goldman Sachs, J.P. Morgan, Microsoft, and NVIDIA. |
18.2% | The Invesco S&P 500 Momentum ETF is up over 18% YTD. “If it’s goin’ up, buy it” has been the winning strategy this year. |
SWINGEX INDEX
Swingy says: The index is still lurking around zero, while many others are turning bullish. Maybe the index is neutral because of the increased bullishness. We’ll see…. | As of market close on 27 June 20250 |  |
See some historical examples of the Swingex Index in action here.
REWIND
Along with the daily value of the Swingex Index, we sometimes highlight stocks that could do well over the next 3 days to 3 weeks. This is a look back to 2-3 weeks ago to see how they have played out.
$PL ( ▲ 11.56% ) - We pointed out Planet Labs on the morning of June 10th. The shares jumped on earnings the week before and then held strong for a couple days after. It opened that day at $5.83. Unfortunately, PL sold off down to $5 but has since rebounded to its current price of $6.07.