The market continues to be incredibly resilient. We are seeing very little distribution and more sectors are participating. I mentioned over the past 2-3 weeks that I was locking in some gains in some of the growth leaders and how we could see sector rotation. One thing I discussed was the possibility of some rotation from software into semiconductors (which happened) but one thing I underestimated was the amount of rotation into the beaten down sectors and into the “opening up the economy” sectors such as travel and gaming. My interpretation of this is to remain bullish because there is so much liquidity out there. Fighting this trend is not worth the aggravation because of this sector rotation. Of course we will see some pullbacks along the way, but it is tough to see a sustained downtrend right now. As always, I will take this day by day.
Some people asked me if they should be rotating into these value names. As always, do what works for you but I am a growth manager and that is not what I do. Personally, I am staying about 50-60% invested and waiting to put cash into some of the growth leaders when they set up again or offer pullbacks to decent support levels. If you would like to diversify and possibly participate in other “value” sectors, one way to do this is with an index ETF such as the S&P 500 ETF (SPY) or the Dow Jones Industrial Average ETF (DIA). That will give you broader exposure if that’s what you are looking for until more growth stocks set up again.
Topics covered:
1) 0:00 Announcements
2) 1:10 Market Commentary
3) 8:10 Index Review – Nasdaq Composite, S&P 500, Russell 2000
4) 13:40 Stock Review – Leaders: MSFT, AAPL, NFLX, AMZN, NVDA, SGEN, VRTX, DXCM, TSLA, NOW, OKTA, VEEV, TEAM, COUP, SDGR, BTAI
5) 20:20 Stock Review – General Ideas: ADBE, KLAC, QRVO, SWKS, SMH, PRVB, ADVM, AXSM, CELH, DDOG, BAND, TWLO, CRWD, ICAD, ADPT, STAA, DT, FSLY, NET
6) 29:10 Stock Review – Top Buyable Entries: AXNX, TSLA, MSFT
7) 30:20 Unusual Option Activity
8) 32:45 Conclusion/Summary