In the MidWeek Video (2/15/23), I gave you 5 reasons to expect weakness over the second half of February. We got that weakness and the major indexes corrected down to their 200-day moving averages. Now, I’m expecting a bounce and a resumption of the uptrend that started with the January 6th follow through day. My main reasons are: 1) We are heading into two seasonally strong months (March and April), and they are even stronger in pre-election years. 2) As I mentioned in the past Weekend Video, the pullback over the past three weeks was on lighter and lighter volume (showing that the big institutions were not aggressively selling their shares). 3) Many leading stocks continue to act well. 4) Some of that excess bullishness has been shaken out of the market recently.
I am increasing my exposure with some index ETFs. I prefer MDY and IWM over SPY and QQQ because the former two are acting better. Some stocks from our watchlist that are near buyable ranges include: PI, ALGM, AYX, TENB, AI. As always, your decisions should be based on your own investment objectives. The purpose of this note is to say I was expecting weakness over the second half of February (which we got) and now I’m expecting better price action over the next few weeks, especially with new money flowing into the market at the beginning of the month. I will discuss this further in tomorrow’s MidWeek Video. Thank you and good luck!