I tweeted on Tuesday night (4/16/24) that I feel the bulk of this recent market pullback is over. Before I continue, I want to remind everyone that I don’t regularly update this blog. I actively manage portfolios for clients and my investment levels vary. If you would like more regular updates and analysis, you can sign up to become an Educational Member.

1) Since last May, I’ve been positive on the markets. That’s when we started a new bull market powered by AI. I wrote about it on this blog and discussed it during this TV appearance.

2) After the amazing technicals in early November, I reiterated my bullish stance here.

3) Coming into this year, I discussed in my 2024 Preview that I was expecting less-than-average pullbacks this year. The average intra-year correction for the S&P 500 is approximately 14%. I am only expecting pullbacks in the 3-7% range this year.

4) In mid-March 2024, I wrote that I reduced my exposure and that I was “defensive over the near-term until we shake out some of the excess bullishness.” Since then, I feel this pullback has done that. For example, the CNN Fear and Greed Index has recently dropped from 78 down to 38. In addition, I’ve talked to many traders who experienced “mini blow-ups” over the past two weeks due to excessive leverage. You might laugh, but we live in such an impatient and fearful world that sentiment gets very negative, very quickly.

5) On Tuesday (4/16/24), I added exposure to some of the stronger relative strength growth stocks. Please keep in mind that when I say “the bulk of this recent pullback is over,” that doesn’t mean that we’ve bottomed and we’re going straight up. It just means that I’m not expecting significant downside from here. Of course, we can still chop around and back-and-fill over the near term. I just felt it was a good time to add exposure as we head into earnings season and due to the second half of April being historically positive.

I can be reached at: jfahmy@zorcapital.com.

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