The MidWeek Video will be posted by Thursday morning. Thank you for your understanding. In the meantime, here are some Market Notes:

1) In last weekend’s video, I mentioned that if we see strength in the first half of February, I will look to reduce exposure. A common question I received was: “What if we don’t see strength?” The answer to that question is I will likely get stopped out of positions if they start to break down. Unfortunately, that has happened so far this week and I’ve reduced my exposure considerably.

2) The main reasons I was looking to reduce exposure: A) The distribution days (days of institutional selling) are starting to build up. I highlighted them in last Weekend’s Video, and unfortunately, we are seeing more distribution so far this week. B) I am not finding many safe entry points. C) Seasonally, the second half of February tends to be weak. D) Midterm election years tend to be more volatile.

3) Speaking of volatility, I don’t like the whipsaw action so far this week. I prefer to see volatility calm down. In addition, I don’t like the decisive break below the 50-day moving average for the Nasdaq Composite.

4) All the questions about how much to reduce? Your investment levels? Which positions to sell? Which positions to reduce? etc. are all up to YOU. There are no right or wrong answers. You have to make these decisions based on your timeframe, risk tolerance, investment objectives, and your overall plan. Also, keep in mind that I could be wrong. Meaning, the market could stabilize and conditions can improve. If they do, I will of course pass this along to members.

5) Longer-term, I still like the Aerospace sector, Biotech, Semiconductors, and Data Center related stocks, but they will be volatile because many of these stocks have already experienced strong gains and need to pullback or build new bases. Members with a longer-term timeframe can use the 10-week moving average as your guide if you are looking to nibble at these stocks.

6) Please keep in mind that I am defensive over the near-term. I don’t like to get overly bearish because we are still in a bull market. I simply prefer to be patient until conditions improve. Defensive to me means: A) I am not looking to take any new positions. B) If I do, I will keep them light. C) Reducing position size on existing positions. D) Sticking to a strict loss-cutting discipline based on your timeframe.

Please remember to be disciplined and patient until market conditions improve. Thank you and good luck.