Message of the stock market is very different from " noise of the market "
Noise generally is about trend which has happened
Message of the market is about "subtle change in internals of the market "
After 30 months of noise and bear trend.....there IS hope
First of all, all noise aside, October low was NOT taken out in relentless selling of year end booking of losses, it was very easy to take out October lows BUT we did not....
Not only October lows were NOT taken out but June 2020 lows were not taken out either, so 30 months lows were in tact......
Noise was @ loudest going into year end selling, but more smart buyers were waiting for any selling and kept buying.....
Friday's TAPE was very significant, we broke the downtrend line and closed higher than that resistance.
Besides technical action for the positive, inflation rate is finally trending down NOT for 1 month but last month was also revised down 2 notches from .6% which caused horrendous selling to .4% and this month stat came in better than expected .3%....from a feared .6% wage inflation we are down 50% to .3% wage inflation.....thus a strong rally .....
Looking @ obvious facts of the market which becomes noise, Oil & Gold has performed well...BUT that could be yesterday's news.....
On Friday's rally ..guess which sector was the-best performing....Not Oil Not Gold....BUT much ignored and much hated Technology stocks.....QQQ was UP 2.76%
Hopefully, we are transitioning from " noise based " to " real message of the market "
It IS important to be positioned in beaten down frothy stocks of past....AAPL TSLA all celebrating new lows...BUT may be headed into future new high list IF we stay patient...
Based on the change in " inflation picture " we may be headed higher in the near term...
Based on the above, we may be looking @ minimum 5% higher in Nasdaq, S&P 500 & DOW
Then normal market action, consolidation & UP.
YES...you need a well diversified portfolio of strong fundamentals like Gaming, Restaurants, Technology.....
This market has build a strong base in last 7 months which may result in downtrend to be decisively broken in next move.
Good luck with your own understanding & strategy.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Saleem,
Last week: +1.67% (YTD: +1.67%)
Notable Portfolio Leaders: IONQ UPWK PLAY LYFT
Notable Portfolio Laggards: BMEA ZENV
It had been another tough week for the markets until Friday changed everything. The tame wage inflation coupled with a still-expanding jobs market increased the odds for a soft landing as the aggressive Fed may soon have the data in hand to pause for some time. The number of stocks in the portfolio has remained small recently as I stuck with comfort stocks during the tougher times. It may soon be time to start branching out again to reach for other ideas. I am glad to see 2023 finally here - great beginnings! :)
Holdings: SYM LYFT SNAP PLAY UPWK DDOG IONQ BMEA ZENV, cash 0%
Stocktrader
Hi Saleem,
Trimmed LYFT @ 13.05
Trimmed PLAY @ 39.87
I'm looking to buy BMBL today but it's been running away from my entry points all morning.
Stocktrader
Hi Saleem,
Finally in BMBL @ 20.69
I may add some more later if I can get a good exit on some SYM later today or tomorrow.
Stocktrader
Hi Stocktrader,
Last week UP 3.44%
YTD UP 3.44%
Saleem
Hi Stocktrader,
Good luck with BMBL
Good time for rethink for 2023
Saleem
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