Planning For Pullbacks
The Watchlist
The S&P 500 has been in rally mode since late last week. I’ve read research saying this is the late cycle expansion phase.
When we get towards the end of a “low rate” cycle … it can spur businesses and consumers to take on debt. Lowe’s (LOW) announced today a $5B debt offering for no real specific reason.
Most corporates still have plenty of cash left on the balance sheet after breaking records in 2020 for borrowings. So the full impact of the Federal Reserve tightening financial conditions will take a while to realize.
From a technical perspective the S&P 500 has broken to the upside and pullbacks can be bought. See the Bitcoin chart below for examples.
Notice Bitcoin (BTC) has made the same move the S&P 500 has, but is a few weeks out of the breakout. I prefer to trade this - but it can be entry point for “dollar cost average” or “buy the dip strategies”. For shorter term trades you are limiting your downside to just below the previous lows and you are trailing out of it as it bounces.
New Videos:
I posted a video on Sunday showing several indicators pointing to the high likelihood of a recession occurring in the United States by 2023.
NEW Video: 3 Indicators Pointing To A Recession
It’s not a particularly bold call - as the recession in 2020 was aggressively fought off with trillions in government debt.
Nike (NKE) came out with earnings on Monday. The company reported strong gross margins but we’re seeing inventory stack up a bit. Will be interesting to see if they can move through inventory while maintaining margins in the coming quarters.
Video: Nike Q1 Earnings
Adobe (ADBE) revealed earnings on Tuesday. The company’s guidance came underneath guidance which has the stock off in the after-hours. I bought ADBE a few weeks ago.
Video: Adobe Q Earnings
On The Radar:
People always ask me what stocks I’m looking to buy. For the most part, I’m looking for deep pullbacks to buy more of my core positions in: AAPL, AMZN, GOOGL, MSFT, NKE, SBUX, PEP, WMT, BAC, JPM, V, a few others.
As for new positions: NFLX, PINS seem interesting.
Building more exposure to: NVDA, TSLA, COST, MCD, ADBE
Nothing in the micro-cap area. That’s something for after a recession washes out a ton of stocks. Too risky when one is likely coming.
All Things Being Considered
Still remain long all my core positions. Still have about 10% cash, which is elevated for my risk tolerance. Looking to capitalize on short term pops in equities & BTC through trading.
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Nice, easy to understand info....thank you!
Thank you for the great insight!