Again we trade the charts in front
of us but this helps to clarify what's been unfolding this year.
This is a follow up to what I posted yesterday and the impact
being reflected largely due to AI and how the market
perceives.
The S&P 500 is up 9.9% year-to-date
The S&P 493 is up +1%
The S&P 493 represents all of
the stocks in the S&P 500 minus
Meta(META),
Amazon(AMZN),
Apple(AAPL),
Microsoft(MSFT),
Google(GOOGL),
Tesla(TSLA) and
Nvidia(NVDA).
The S&P 7, a handful of technology stocks, is now up an
incredible 58% this year. Meanwhile, the remaining S&P 493 is
up just 4%. AI hype and technology stocks are literally holding up
the entire market. Markets really believe AI is the next big
thing.
Posted by bulf6285 on 28th of May 2023 at 03:18 pm
Matt & Steve, when the market peaked last year and you
started discussing the possible end of the bull run, there was
mention of how leader of the previous bull market do not lead the
new bull market. That some sort of "rotation" into new areas of
growth usually lead the way. When would you expect that dynamic to
start to happen? Unless I misunderstood? I'm not looking for some
prognostication, just an understanding in very general terms of how
that tends to play out over time. The way things currently are, all
the focus still seems to be on the same handful of names (by the
market, not you guys). Any insight is appreciated!
bull - saw your message: I can't tell you if this is some
new bull market - I tend not to favor that, but the trend is up and
has been up since Oct when we favored a trade low in the market
because of 5 waves completed to the downside, playing long side has
been the place to be and continues to be.
last year energy lead the market, as well as big old economy
stocks like the the Dow and VYM, while big cap tech and QQQ's were
down the most - this year things are the complete opposite: energy
and Dow is the weakest while big cap tech, especially the
magnificent 7 or magic 8 ball 8 are the strongest.
My target area on the SPX has been 4325 - 4400 since the Oct
lows of last year and so that that continues to play out.
Not surprised that QQQ's lead this year after lagging the worst
last year - but I'm not perfect I didn't go super aggressive long
that area like in hindsight we all should have.
Currently AI is the big thing/hope, the Jesus moment for the
market - I think it will have profound effects on everything. That
said, is it enough to take the whole market to new all time highs
now? or do we still have one more big dumpola later this year early
Fall, which has been our prognostication guesses for a long
time.
You could use the KISS charts to keep you invested in some of
these names (if you have them (most have some of these at least
such as AAPL etc, if one is long some of these magic 8 ball stocks
already, one option is to just stay long and manage them with our
KISS systems stops. If they carry the market to a new all time high
and a new bull market - well they'll keep you in. But if the music
stops later on, they give you a chair to sit in (like a game of
musical chairs).
The QQQ and SPX have been long, the QQQ's since early March -
those are some indexes one could have been long in their longer
term 401K type accounts as well
bulf - swamped here working on newsletter and other items but
you should review what transpired in 2022 after the peak (XLE was
leader last year and dead last this year).
Now fast forward to this year, What goes down the most in Quad
4? Answer: Commodities
For quite a while, I’ve been wondering the same question as
bulf6285 asked. XLE was a 1-year wonder and not the driver of the
Bull market since 2009, so I do not consider its decline as
evidence that the previous leader of a Bull does not lead the next
Bull. I feel the leader of the Bull since 2009 was FAANG or MAANG
or whatever you want to call the tech mega-caps. I am not a trader
like most here – other than a small trading account, most of my
focus is on long-term positioning of my larger 401K. In my personal
notes over the last year, I wrote to avoid “FAANG” tech stocks due
to the inevitable shift to the next Bull market’s leader, so I
missed this entire tech run in my 401K. Well, FAANG is clearly
leading now. So, do you consider the recent uptrend to be some sort
of dead cat bounce of the dying Bull from 2009 (i.e. new lows are
still to come), or do you feel a new Bull is starting with FAANG as
a leader again?
When a stock adds $200 Billion in one session - things move
quickly. For those willing to deploy LT funds, I would prefer
to buy into the initial higher low ( remember I pointed out 5 waves
down last fall). MAGMA (better than FAANG) has been
outperforming for a few months not just lately. For me
personally, I don't see the FED starting QE (you make your own
decision) - define your markets and trade accordingly. I
have gone overboard to present what has been moving the market for
many weeks and especially of late (it's been an extremely narrow
advance as I have shown with the stats). Most simply still
cannot comprehend how the indices work. This is a market of a few
halves and many have nots and for anything sustainable this will
need to broaden out - but traders have been quite reluctant to
position into other areas due to the declining macro environment
(quad 4). Outside of those 7 names impact - you would have
been better off in money market funds YTD if simply tracking the
SPX. Take time to review all sectors and indices that I
posted below once again. Further to my point, fixed income
(bonds) are lower and commodities torched so far this year.
I suggest you take to review the LEI prior to making any such moves
as well and then make an informed decision.
Yes, in 2022 those so called FAANG stocks greatly underperformed
and the new driver this year for such names has been AI - starting
with MSFT awhile ago.
Key levels of support on NQ 13,860
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SPX vs SPX Equal Weight Views along with the Magnificent Seven
Posted by steve on 28th of May 2023 at 03:06 pm
$SPX - Chart Link
$SPXEW - Chart Link
Again we trade the charts in front of us but this helps to clarify what's been unfolding this year. This is a follow up to what I posted yesterday and the impact being reflected largely due to AI and how the market perceives.
The S&P 493 represents all of the stocks in the S&P 500 minus Meta(META), Amazon(AMZN), Apple(AAPL), Microsoft(MSFT), Google(GOOGL), Tesla(TSLA) and Nvidia(NVDA).
(h/t to @Growth_Value_on Twitter).
Put another way…
CAN WE UPDATE THIS???
Posted by donkeyface on 17th of Jul 2023 at 02:09 pm
CAN WE UPDATE THIS??? thanks
update what? explain
Posted by matt on 17th of Jul 2023 at 02:15 pm
update what? explain
These 7 stocks are collectively
Posted by donkeyface on 17th of Jul 2023 at 07:22 pm
Obviously this has changed... Just curious how the SP7 vs SP493 is looking now. Thanks
Donkeyface - In reply to your question
Posted by steve on 18th of Jul 2023 at 05:29 pm
The S&P 7, a handful of technology stocks, is now up an incredible 58% this year. Meanwhile, the remaining S&P 493 is up just 4%. AI hype and technology stocks are literally holding up the entire market. Markets really believe AI is the next big thing.
Kobeissi Letter via Goldman Sachs
Thanks!!!!
Posted by donkeyface on 19th of Jul 2023 at 08:41 am
Thanks!!!!
Matt & Steve, when the
Posted by bulf6285 on 28th of May 2023 at 03:18 pm
Matt & Steve, when the market peaked last year and you started discussing the possible end of the bull run, there was mention of how leader of the previous bull market do not lead the new bull market. That some sort of "rotation" into new areas of growth usually lead the way. When would you expect that dynamic to start to happen? Unless I misunderstood? I'm not looking for some prognostication, just an understanding in very general terms of how that tends to play out over time. The way things currently are, all the focus still seems to be on the same handful of names (by the market, not you guys). Any insight is appreciated!
bull - saw your message:
Posted by matt on 29th of May 2023 at 02:00 pm
bull - saw your message: I can't tell you if this is some new bull market - I tend not to favor that, but the trend is up and has been up since Oct when we favored a trade low in the market because of 5 waves completed to the downside, playing long side has been the place to be and continues to be.
last year energy lead the market, as well as big old economy stocks like the the Dow and VYM, while big cap tech and QQQ's were down the most - this year things are the complete opposite: energy and Dow is the weakest while big cap tech, especially the magnificent 7 or magic 8 ball 8 are the strongest.
My target area on the SPX has been 4325 - 4400 since the Oct lows of last year and so that that continues to play out.
Not surprised that QQQ's lead this year after lagging the worst last year - but I'm not perfect I didn't go super aggressive long that area like in hindsight we all should have.
Currently AI is the big thing/hope, the Jesus moment for the market - I think it will have profound effects on everything. That said, is it enough to take the whole market to new all time highs now? or do we still have one more big dumpola later this year early Fall, which has been our prognostication guesses for a long time.
You could use the KISS charts to keep you invested in some of these names (if you have them (most have some of these at least such as AAPL etc, if one is long some of these magic 8 ball stocks already, one option is to just stay long and manage them with our KISS systems stops. If they carry the market to a new all time high and a new bull market - well they'll keep you in. But if the music stops later on, they give you a chair to sit in (like a game of musical chairs).
The QQQ and SPX have been long, the QQQ's since early March - those are some indexes one could have been long in their longer term 401K type accounts as well
https://docs.google.com/spreadsheets/d/1IvnRa4hRYPPYwdyWNcoYO_PS2cV7uo3OlrHnUTp-kT8/edit#gid=0
docs.google.com
KISS STS Table Portfolio - Google Sheets
bulf - swamped here working
Posted by steve on 28th of May 2023 at 03:22 pm
bulf - swamped here working on newsletter and other items but you should review what transpired in 2022 after the peak (XLE was leader last year and dead last this year).
Now fast forward to this year, What goes down the most in Quad 4? Answer: Commodities
For quite a while, I’ve
Posted by sethbru on 28th of May 2023 at 09:47 pm
For quite a while, I’ve been wondering the same question as bulf6285 asked. XLE was a 1-year wonder and not the driver of the Bull market since 2009, so I do not consider its decline as evidence that the previous leader of a Bull does not lead the next Bull. I feel the leader of the Bull since 2009 was FAANG or MAANG or whatever you want to call the tech mega-caps. I am not a trader like most here – other than a small trading account, most of my focus is on long-term positioning of my larger 401K. In my personal notes over the last year, I wrote to avoid “FAANG” tech stocks due to the inevitable shift to the next Bull market’s leader, so I missed this entire tech run in my 401K. Well, FAANG is clearly leading now. So, do you consider the recent uptrend to be some sort of dead cat bounce of the dying Bull from 2009 (i.e. new lows are still to come), or do you feel a new Bull is starting with FAANG as a leader again?
When a stock adds $200
Posted by steve on 28th of May 2023 at 10:04 pm
When a stock adds $200 Billion in one session - things move quickly. For those willing to deploy LT funds, I would prefer to buy into the initial higher low ( remember I pointed out 5 waves down last fall). MAGMA (better than FAANG) has been outperforming for a few months not just lately. For me personally, I don't see the FED starting QE (you make your own decision) - define your markets and trade accordingly. I have gone overboard to present what has been moving the market for many weeks and especially of late (it's been an extremely narrow advance as I have shown with the stats). Most simply still cannot comprehend how the indices work. This is a market of a few halves and many have nots and for anything sustainable this will need to broaden out - but traders have been quite reluctant to position into other areas due to the declining macro environment (quad 4). Outside of those 7 names impact - you would have been better off in money market funds YTD if simply tracking the SPX. Take time to review all sectors and indices that I posted below once again. Further to my point, fixed income (bonds) are lower and commodities torched so far this year. I suggest you take to review the LEI prior to making any such moves as well and then make an informed decision.
Yes, in 2022 those so called FAANG stocks greatly underperformed and the new driver this year for such names has been AI - starting with MSFT awhile ago.
Key levels of support on NQ 13,860