Last week we wrapped up Q1 2023, and ended it with a bang. Tech stocks are running strong continuously, QQQ 0.00%↑ up 16% on the quarter, SPY 0.00%↑ up about 7% on the quarter.
Banks, small caps & energy outperformed this past week as the oversold sectors got some confidence back.
Financials, namely banks had a tough time since we saw all the SIVB 0.00%↑ news and a lot of the larger banks looked like really good opportunities ( $JPM and such). The Biden administration released a set of proposed new regulations this week for mid-sized banks, banks with assets between USD $100B & $250B. Along with more frequent stress tests and stringency (capital/liquidity).
Fed’s number 1 inflation metrics (PCE) came out Friday and the February reading was 4.6% vs the expected 4.7%. The figure is slowly dropping, still above the Fed’s 2% target however the continued downside on the metric is pumping confidence in investors.
US bonds & yields calmed down after a period of increased volatility from the banking sector and SIVB 0.00%↑ . The 10-year dropped 18% in 2-weeks when the news hit and the 2-year; 30% in the same time. The US 2-year was on recent 14-year highs before this occurred and I think that this is the turning point where these yields start rallying again. Meaning downside pressure for bonds & equities.
The 2 & 10-year spread became more negative with the 2-year rising more than the 10-year, keeping the yield curve consistently inverted.
S&P500 Futures
Futures are through a few distribution blocks to the upside, accepting really well into the end of the quarter and this could sustain further. I think that the longs are due for a pullback but it could be a dip buying pullback after all.
We’re now in the 4115 to 4133 distribution block to the upside. Supports to hold are 4123 & 4115 region. Thinking dip buyers try these areas, I think the last option for the longs is 4105, under the shorts are probably going to accept.
I can see prices attempting through 4141, possibly getting to 4170 before markets reverse from that higher distribution block.
Prices to fight to hold long at the following supports:
4123, 4106, 4098, final bout is 4088/92.
Past Trade ideas
Last week I talked about the following:
NVDA 0.00%↑ attempted shorted, they started off strong, however, they didn’t get a complete move from the 270 area down into the 258 region before pulling back higher. I do like NVDA for the long term naturally, but I would want to get a larger pullback, I don’t think it’s fairly valued, but I won’t be shorting this until it gets to whatever I think a “fair value”.
The same with QQQ 0.00%↑ from the 312 regions down into 304, which presented a sold 40-50% gain on the options.
Then was $JPM and other financials. I do like the longs and they ran from about 126 Monday price to 130, as expected, there is more upside in these IMO.
I like BAC 0.00%↑ as well for the long term, which is in a good area to take a jab at $28/share.
On March 12th, I posted for paid subs:
Longs 400/410C $SPY for May at 380. which came on Monday, now SPY trading around 410.
$SPXL leveraged shares to add March 13 around $60 now $73 up 21%
Long-term adds for (March 13)
GOOGL 0.00%↑ $90 to $106 (18%+)
VOO 0.00%↑ $350 to $376 (7%+)
IEF 0.00%↑ $99 to $99 (0%+) I like this lower.
BRO 0.00%↑ $53.50 to $57.50 (7%+)
UNH 0.00%↑ 459 to 472 (3%+)
More ideas:
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