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A New Year: Tax Selling & Profit Taking
January 5, 2024 - OK, this market was waaay overbought and due for a pull back. As I pretty much expected, 2023 profits were harvested at the beginning of 2024 (delaying taxes for over a year) along with the standard profit taking in an overbought market. Now the question is how much farther down and into what sectors / stocks will that money flow?
Monday should bring some selling and then consolidation (I think). Later in the week we may see some select buying. But lately Bonds have been inching down (higher interest rates) and the US $ also moved higher. Ideally, I’d like to see Bonds higher and the US$ lower. Those two would re-stimulate the US market and signal a return to previous highs and higher.
I’m seeing what might be the beginning of the end of this pullback; Caution. Sectors that are currently strong are generally defensive so keep an eye on those Bonds, US$ and sector rotation back into growth. The small cap Russell 2000 Index and the NASDAQ 100 will be the confirmation of back to “Risk On”. Until then “Patience is a Virtue”. The Short-Term Sector Strength Table is shown above. –
Cheers and Wishing all a Happy and Health New Year. (Make no mistake, 2024 will be a bumpy ride.) ……………… Tom ……………**** Table by www.HighGrowthStockInvestor.com; used with permission