IShares Aero & Def. ETF (ITA)

Aerospace defense is doing well and terrorism is not going away. That is going to keep these stocks doing very well. Wait for a pull back. He does not buy a stock on a day it is up.

Seasonally you normally see defence stocks doing very well from about October right through until about the end of the year, and then they tend to take a bit of a break from January through to March. They then take another move to the upside until May. Technically, it is currently running into some overhead resistance with a small downward trend.

This has always been a thematic type of investment. There are times you want to own, and there are times when you don’t. The 5-year chart shows it is really on the highs and breaking out a little. He doesn’t like breakout kinds of stories because they fail more often than they don’t. Also, it depends on who wins the election. If Trump wins, this might be a very strong sector for a little while.

The period of seasonal strength for this sector is from mid-October right through until early January, and also from March until May of each year. Today there were a number of stocks within the sector that broke to new highs. This is happening because there are terrorist activities going on, which means there is going to be more military equipment that is purchased by all the major countries globally, who want to fight against ISIS.