Is it Time to Start Picking the Low Hanging Fruit?
From Worst to First?
The worst performing sector year-to-date was the best performing sector today after the CPI data release. The regional banking sector was hit especially hard this year.
Smaller bank’s capital ratios came into question earlier this year when large outflows of deposits hit a few regional banks. This caused a banking scare and a big selloff in the bank related ETFs. Smaller, more regional banks were hit especially hard. This is the reason for the very poor performance in the banking industry.
Will this trend continue, or will it still be a bumpy road ahead for the banking industry?
Is it Time to Start Rotating Capital Again?
There are a lot of secots that have been big underperformers this year but are on a recent comeback over the past month. Even more so today after the CPI reading. Companies in the heathcare, materials, industrials, retail, real estate, and utilities industries appear to be on a comeback.
If you are a long-term investor wihin these sectors, then it might be a good time to average down or reallocate funds into some of the good names in these industries.
Personally, I am most bullish towards the tech sector, so that is always a good area I like to invest in during any bull market. Especially after a three-month long and roughly 10% correction. I still think this will be the best secor to watch.
$Spdr S&P Bank Etf (KBE.US)$ $Real Estate Select Sector Spdr Fund (The) (XLRE.US)$ $SPDR S&P Biotech ETF (XBI.US)$ $Spdr S&P Health Care Equipment (XHE.US)$ $SPDR S&P Retail ETF (XRT.US)$ $Utilities Select Sector SPDR Fund (XLU.US)$ $Spdr Series Trust Spdr S&P Pharmaceuticals Etf (XPH.US)$ $The Technology Select Sector SPDR® Fund (XLK.US)$ $Invesco Kbw Regional Banking Etf (KBWR.US)$
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you vant afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
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TinkerB3ll : Thank you @SpyderCall for such in depth analysis whats your thoughts on Semi? Like SOXX SOXL SOXS?
SpyderCall OP TinkerB3ll : Strong Buy! Semi's have been a great investment for years. Personally I like the big names in the space. Like NVDA, AMD, QCOM, AMAT, INTC, TXN, MU, etc. Big names like that. There are a lot of smaller semi companies that perform very good also. Especially since the trade war between China and US further restricted semiconductor trade between the two countries.
The semi sector is probably my favorite sector. I trade semi companies more than any other.
TinkerB3ll SpyderCall OP : Awesome thanks for sharing this made me feel strongly about me buying into soxl our dearest Mike Burry just bought tonnes of puts on Semi
SpyderCall OP TinkerB3ll : oh snap! Did he really buy a bunch of pust on semi's? do you know which ones exactly? Sometimes his trades hit big time.
He loaded up on short positions right before the previous correction.
I wouldn't worry too much this time. I don't see the semi sector falling unless all of tech and/or most of the market is falling.
TinkerB3ll SpyderCall OP : Burry, famous for 'Big Short,' places bearish bet against semiconductor ETF
TinkerB3ll SpyderCall OP : Pasted the link and it’s on soxx he seems to catch the market correctly
SpyderCall OP TinkerB3ll : I read up a few things about it. He might have already profited, sold, covered the trade, etc. Who knows how the trade is doing now.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
I wouldn't worry about any long position yet. The weekly candles tell me there is another leg up happening. How high this next leg will go, nobody knows. But the sharp rally on the daily candles is just confirmation of this additional leg up. That is how I see it.
I highly doubt this is a massive pump fake and there is about to be a massive rug pull. That is just me though. Anything could happen.
Who knows, Mike Burry could be selling or covering his short position which would just be a little more fuel to the melt up.
TinkerB3ll : Thank you for sharing let ride this up
SpyderCall OP TinkerB3ll : Here is an example of one of those low-priced semi stocks that has been performing much better than he big names on the sector ever since the china trade war got worse.
I mentioned this in my group a few weeks ago. It is up about one hundred percent since then.