Ivanhoff Capital

MarketSurge powers the charts in this video.

Quite a few tech stocks were getting weaker going into the FOMC meeting last week. The premise was that higher inflation might be back and the Fed will likely be more hawkish in their remarks. None of that happened. The Fed confirmed its plan to reduce interest rates by 75bps this year and more in the next year. Stocks had another significant bounce, led by small caps, financials, and retailers.

Semiconductors also had a decent bounce but for a different reason. Micron (MU) crushed earnings estimates and inspired a rally across the board. NVDA quickly recovered from its dips to its rising 20-day EMA and it is back near its all-time highs. Ditto for QCOM. COHR bounced near its 50dma and it is also looking constructive. Ditto for AVGO. Semiconductors remain the leading sector. The dips in chips continue to get bought. 

The second best-performing major sector year-to-date is financials. All the talk about nightmare drops in commercial real estate prices and financials didn’t even blink. So much strength across the board – JPM, GS, etc.

Earnings season is basically, over. Typically retailers are the last to report. It has been a mixed picture there – while LULU, NKE, DG sold off, others like WSM, ARHS, TGT, GPS gapped up and followed through. Tech stocks are the ones having issues with following through lately. Look at MU, ORCL, DELL, IBM, CRWD for example. Those gaps were used by some to take profits.

The IPO market is finally back in the news. RDDT and ALAB were the crowd’s favorites. I am not chasing any of them. I rather wait a few weeks or even months and see if they set up properly. This is what I did with CAVA and CART and it worked out well.

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Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

We saw several inflation reports in a row coming above estimates. It didn’t matter much in February as most stocks continued higher. The narrative seems to be changing in the middle of March. Interest rates began to rise quickly last week. This time, this was coupled with weakness in small caps and tech stocks and a rise in basic materials and energy. Is the inflation trade back on? I doubt it is sustainable for too long but it is the current trade. The Fed meets On March 19 and 20th and it is expected to keep the rates where they are. They will surely extend the status quo longer if there’s any doubt that inflation has a chance of rising again. 

We are likely still in a bull market. Even bull markets correct. In fact, the best risk-to-reward entry points during bull markets come after a slight 5-10% pullback in the major indexes. I’d be thrilled if we see one over the next 2-3 months and get the opportunity to buy some of the market leaders near their YTD VWAP.

The market is in a pullback mode, breakouts seem to be failing, pullbacks to major moving averages are not holding, more and more earnings reports are getting sold, volatility and choppiness have increased. Long swing trades have become more challenging in tech but are still working well in energy, metals, and retailers, at least for now.

Try my subscription service which includes a private Twitter feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

I published a new trading book recently (2023). Check it out on Amazon.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

We are in a strong bull market. Even exceptionally sound markets experience the occasional pullback that shakes the exuberance out and resets the bases for many stocks. The price action last week tells us that we might be entering such a corrective, consolidation period. All of a sudden we started to see an increasing number of stocks sell off or not follow through after decent earnings – MDB, MRVL, AVGO, COST, CRWD, etc. Volatility also picked up. Just last Friday, we saw NVDA going from +5% to -5% for the day. COIN went from +12% to +6%. QQQ went from +0.6% to -1.5%. 

We have to keep in mind that bull markets often correct through sector rotation. We saw it last week again – when tech pulled back earlier in the week, financials and basic materials were strong and breaking out. When tech bounced back, financials went sideways. Such types of rotations are healthy. They show that capital is not leaving the market but merely looking for better risk/reward opportunities in various sectors.

There are two most likely scenarios for the next week:

1. We see a slight correction. The silver lining here is that the best entries in a bull market come after pullbacks.
2. We see a continuation of strength with rotation in sectors that haven’t participated as much. Quite a few retailers are still due to report earnings. TGT gapped up. GPS gapped up. We might see more of those and a follow-through in the strongest gaps. 

Try my subscription service which includes a private Twitter feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

I published a new trading book recently (2023). Check it out on Amazon.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.