Mark.Mivernivi X updated👇
I do not think a major market top is being made here. To the contrary, the CPI data could cause a pullback in certain areas of the market, but our long-term models remain bullish with our January 13, 2023 buy signal still intact. Extended stocks are vulnerable, but odds are that a pullback of 4-7% in the $SPDR S&P 500 ETF(SPY.US$ present a buying opportunity.
Interestingly, the hot CPI data may in fact help to keep the rally going. Why? Because a less likelihood of aggressive rate cuts makes small caps less favorable (as seen in the Russell 2000 reaction today). Money that has favored the megacap names (which dominate the index weightings) may not rotate out, thus keeping an already extended area of the market supported.
We have enjoyed great success in our individual stock trading and our index positioning. That said, going into this week, I was getting concerned that we may have gotten to a point where too much of a good thing was creating some short-term froth. A pullback was expected, and I started positioning for it last week. We further reduced risk today and tightened stops.
Volatility has been low and today may have started a move higher in the VIX off of persistent low levels, which would make sense as we enter the relatively weak part of the year based on cycle work.
However, if we can get rate cuts around the middle of the year without a recession. The convergence with a strong 2nd half 2024-1st half 2025 Presidential cycle and the strong tendency after a first rate cut, could set the market up for a very strong rally and a continued bull market.
In the meantime, pullbacks are normal and healthy, as long as they are within the context of a long-term uptrend.
Interestingly, the hot CPI data may in fact help to keep the rally going. Why? Because a less likelihood of aggressive rate cuts makes small caps less favorable (as seen in the Russell 2000 reaction today). Money that has favored the megacap names (which dominate the index weightings) may not rotate out, thus keeping an already extended area of the market supported.
We have enjoyed great success in our individual stock trading and our index positioning. That said, going into this week, I was getting concerned that we may have gotten to a point where too much of a good thing was creating some short-term froth. A pullback was expected, and I started positioning for it last week. We further reduced risk today and tightened stops.
Volatility has been low and today may have started a move higher in the VIX off of persistent low levels, which would make sense as we enter the relatively weak part of the year based on cycle work.
However, if we can get rate cuts around the middle of the year without a recession. The convergence with a strong 2nd half 2024-1st half 2025 Presidential cycle and the strong tendency after a first rate cut, could set the market up for a very strong rally and a continued bull market.
In the meantime, pullbacks are normal and healthy, as long as they are within the context of a long-term uptrend.
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sTone83 OP : Tips: Historical data shows that the third year of the presidential cycle is the best year for the stock market, so it's not surprising to see the 2023 market's performance. The future is difficult to predict, but you can find an advantage by studying history and make full use of the probability performance within the cycle as one of those advantages.
sTone83 OP 151083369 : Yesterday's market was a great time to watch stocks. The amount of information was not small
151083369 sTone83 OP : Yes, some tickets are tight, while others are too loose
sTone83 OP 151083369 : Each stock has a different personality, and there is no need to measure it using a uniform standard. On the basis of a good profit base, I will give some stocks slightly more room to fluctuate. On the premise that the trend is not disrupted, I will be patient and wait for them to slowly complete the current running trend band