Now You Want A Correction?

JC Parets

July 23, 2024

They're out there telling me that the stock market is due for a correction this quarter.

But the stock market just had a correction last quarter.

Look at the Equally-weighted Nasdaq100 Index making zero progress since the start of March.

Remember that correction we were looking for back in Q1?

Well we got it:

The market just had its correction.

But now they want another one?

On an equally-weighted basis, Industrials are down over the past 4 months. Materials, Healthcare and Consumer Discretionary are down over the past 4 months.

The market has been correcting, until more recently anyway.

Underneath the surface things continue to improve. In fact, we just saw the highest number of stocks on the NYSE above their 200 day moving average for this entire bull market.

See: We Buy Stocks In Bull Markets

Meanwhile, large-cap Financials just broke out of a 30-month base to new all-time highs.

And you're seeing it down the cap-scale as Small-cap Financials (Regional Banks) are also hitting new 52-week highs.

But don't forget about the mid-caps.

Mid-cap Financials are hitting new all-time highs:

There are plenty of opportunities out there across sectors and market capitalization.

You just have to look.

We just got the data that more stocks are in uptrends at this point, than at any other point this entire bull market.

So historically what is the best thing to do during bull markets?

I've done the work. Owners of stocks tend to be rewarded in these environments. Cash holders and short-sellers are the ones who are regularly being penalized.

This time is no different.

Here's one interesting situation where the value of Microstrategy is twice the value of the Bitcoin they own.

And this isn't one of those arb plays where you Buy BTC and short MSTR. To me, it's evidence of relative strength and inefficient markets.

This is still a long:

And don't forget about that UBER spinoff from a few years ago.