Intermediate-Long term model has not flashed a meaningful buy signal since the major sell signal it gave in November 2021. I’m itching to put tax advantaged accounts to work as they have mostly been out of the market since the above stated sell signal. That’s a long time to be out of the market, but obviously better than a huge drawdown that a lot of funds have experienced. For now, I’ll continue to be happy with the 4% return money markets and/or short-term Treasuries offer in those accounts.
Even tactical swing trading has been extremely difficult so far in 2023. There have been a few sectors that provided some decent trading opportunities but with this environment, it’s hard to put a large percentage of the accounts to work. Again, money market, T-bills and a lot of patience are your friend.
FANG stocks have outperformed since mid-March. I’m cautious to the fact money has been flowing into “safe” mega cap FANG stocks and the underlying sectors and sub-sectors are not showing the same strength. See the Trend Signals page for the current sector breakdown. I’ll also add that regional banks cannot catch a sustained bid after the SVB fiasco. It’s worth noting, however, with most regional banks getting hammered last month, any upside surprise in upcoming earnings could spark a rally. But as of right now, the bank sector still looks “sick”.
There were some signs of distribution last week on the SP500 and Nasdaq. I’m looking for the next swing trade to be on the downside. Tactical overnight flip trades and 2-5 day swings are still my bread-and-butter here, but I’m looking to hold some shorts if the indices do start to break down next week.
Happy Trading
-Brian