Know What Game To Play

JC Parets
March 7, 2023

Last night was our Live Conference Call that I host at the beginning of each Month.

It gives us an opportunity to take a step back and identify the direction of primary trends.

This is helpful, because without understanding the environment we're in, how could we possibly pick and choose which tools and strategies to incorporate?

This step often gets forgotten about by investors.

Many would rather just shove their strategy down the market's throat whether it makes sense for that environment or not.

I find that foolish.

One chart that I thought told an important story last night was the Nasdaq Composite plotted with the New Highs - New Lows list.

It shows the bottoming "process" taking place beneath the surface:

While the index continued to make new lows toward the back half of last year, it tricked many investors into believing that it was still a bear market.

Most investors don't have the time or even the awareness to acknowledge that it is a market of stocks, and not just a "stock market".

If you're only looking at the index, then of course you think it's a bear market.

But if you look at the actual market, then you've known better, along with the rest of us.

Most stocks were already going up, and almost no stocks were still falling, by the time the Nasdaq made its final low late last year.

Are you one of the lazy people who still use the indexes as a crutch? Or are you one of those people who aren't even aware enough to know the difference?

Don't be one of them.

Look underneath the surface. Take the time to go through the market.

And if you can't, or aren't willing to, then find someone who does and make sure to read their notes.

The ability to identify the envionrment first and foremost is the most important part of the entire process. Otherwise you may find yourself trying to play tennis in a the middle of a hockey rink.

You need to recognize the arena you're in to know which game to play.

Live Conference Call

Thanks to everyone who made it live last night for our Monthly Charts Strategy Session.

You can find the video recording here and also download all the slides.

The Seasonal Tailwinds for stocks are back!

February is historically a rough time for stocks and this year was no different.

But the rotation into the more Value oriented sectors continues to stand out - particularly Industrials.

When rates are rising, sectors like Materials, Energy, Financials and Industrials tend to be the leaders.

This cycle is apparently no different.

There are so many opportunities in these industry groups right now, and not just in the United States, but globally.

It's not just US rates that are going up. Rates are going up.

It's not just US Industrial stocks that are going up. Industrial stocks all over the world are going up - many of which trade on US exchanges.

This isn't 2016. This isn't 2019. It's 2023.

Act accordingly.

Here's the video in full.

Enjoy!

And of course if you have any questions, make sure to contact us here.

- JC

 

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