Hey everyone,
I hope you had a great week, here’s a quick recap of last week’s plan:
- Leaning bullish, positioned bullish
Equities were mostly negative. The S&P 500 finished (-0.6%) and Nasdaq 100 (+0.7%). The Russell 2k was down -2.6%, and the Dow (-1.8%).
The Russell is particularly interesting, as it hit the “buy zone” I wrote about a couple weeks ago. This time of year is seasonally bullish, and these oversold levels have generally been favorable buying opportunities.
On top of that, this time of year is seasonally bullish for small caps. Sentimentrader showed how small caps outperformed large caps by roughly 10x between Dec 11 – Feb 11th.
Given this, I’m saying bullish over the short term, and plan on adding positions early next week.
Market Trends – Industrials On My Radar
Growth’s outperformance is encouraging for longer term bulls, and I wouldn’t be surprised if we see money rotating back into names that have been hit harder, such as industrials.
Industrials have rolled over after outperforming the S&P 500 this year, and could do well in the short term if money comes back in.
Institutional investors have kept accumulating industrials throughout the year, which makes me more comfortable targeting this.
Future – Neutral Equities
I mentioned last week how interested I am in small caps, and am very interested after this week’s drop. Industrials are also on my radar after falling nearly 5% this week.
Tesla, Coinbase, and semiconductors $SOXL have done quite well in the meantime. I’ll let you know when I open more positions, hopefully early next week.