A Possible "Good Start"

PUBLISHED Feb 5, 2023, 1:18:10 AM        SHARE

imgTom Hamilton

February 3, 2023 - A nice breakout of the trading range, but significant weakness was shown on Friday. There are a number of positive momentum and breath indicators out there but markets (very) rarely go up or down in a straight line. Thus I’m expecting a retracement back to around the 11492 price level (NASDAQ Composite Index). After a retracement we will have a much better idea of the true strength of a potential rally higher.

Earnings or potential earnings are what drives the stock market over the long term and this week was not a good one for US Tech companies. While Meta *(a.k.a. facebook) *had a good report, Google, Amazon and Apple did not. These companies did “OK” but gave poor earnings guidance going forward.

The US jobs report is one reason for providing the fuel for the past weeks market performance. The hope is for a “soft landing” and the FED helped that out with Powell indicating maybe only two more small rate increases this year. That’s all it took for the move higher with the FOMO (fear of missing out) bringing the quick surge higher. (“The Bottom Is In”) I doubt if it will last based on the rather modest volume during the week. This leads one to think that the price surge was driven more by the options market (covering options short positions) than by “real buying”.

The US Dollar dramatic move higher on Friday certainly did not help this market sustain the move. Next week should be interesting to see if there is a follow through of Bullish Dollar sentiment. (Note: Dollar higher is generally not Bullish for US stocks.) The Short Term Sector Strength table is shown attached –

So I’m getting more Bullish in the long term but expecting a correction in the short term, at least back to the breakout levels, perhaps lower. The economy remains strong but earnings will continue to be stressed.
And . . . the deficit crisis would really throw a major monkey wrench into the whole thing. Sad, but true. Have a good week. …………. Tom ……………….

Price chart by MetaStock; table by www.HighGrowthStock.com. Used with permission. More information at: www.Special-Risk.net .

Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
Which Utility is Most Invested in Renewable Energy. Are They Worth Your Investment?

U.S. utilities are on a path to convert their power generation fleets to renewable energy. But are they worth your investment?

The Top Utility Stocks by Wind Energy, but Should you Invest?

The stock market may be selling renewable energy stocks at a premium. Let’s discuss which utility stock you should invest in that is also a good financial investment.

Break Out or Shake Out ?

Stock Market Commentary

SCHD vs. VIG: Which Dividend Growth ETF Fits in Your Portfolio?

Dividend-yielding ETFs (exchange-traded funds) have become the rage recently as tech stocks on the Nasdaq have plummeted, and people are seeking more income. So it is no surprise that people have been talking about dividend growth ETFs like SCHD and VIG.

Take These 5 Steps to Recession Proof Your Savings

Currently, the economy is in flux. Inflation remains high, but there’s also a strong chance that a recession is on the horizon. Many of the steps that were taken to curb inflation make a recession more likely.

Money Management and Self-Care Relieve Stress

Money is a significant source of stress for many of us. However, with a few tweaks to your spending and saving habits, you can take some of the strain of managing your money off of your mind.

In a New Era of Bonds

Do I need Bonds in my portfolio? We are in a new Era of bonds, so I thought it was time to ask the question do I need bonds in my portfolio?

The Easiest Money That Investors Ignore

Investing is all about risk and reward. When investors take more risk, they demand more reward. One such “risk premium” is the concept of illiquidity. Liquid assets are easily converted to cash. Stocks are liquid. You can buy or sell them five days a week.

US Q4 GDP Nowcasts Project Solid Rise For Thursday’s Report

Recession worries continue to swirl, but the outlook remains upbeat for this week’s initial estimate of fourth-quarter GDP, based on a set of estimates compiled by CapitalSpectator.com.

VOO vs. VYM vs. VIG – The Vanguard ETF Trifecta!

The GOAT of the industry. Vanguard. John Bogle. Bogleheads. The creator of the mutual fund and home of the best exchange traded funds out there.

The Zen Ten – My Top Picks for 2023

I’ve been publishing the Zen Ten list each December since 2008. I pick my favorites and stick with them all year – no trading.

The Productivity Discussion

On the 11th of October 2022, the International Monetary Fund (IMF) revised its growth forecast for 2023 for the euro area to 0.5%, down from 2.5% at the start of the year. Piggy has observed similar downgrades right across different regions and individual countries. In a nutshell, it is envisaged that global power shortages could…

Data Update 2 for 2023: A Rocky Year for Equities!

It is the nature of stocks that you have good years and bad ones, and much as we like to forget about the latter during market booms, they recur at regular intervals, if for no other reason than to remind us that risk is not an abstraction, and that stocks don't always win, even in the long term.

Resources for Publishers
Resources for New Investors