Bullish Areas of the Market

We often default to Mag 7 or other large capped tech stocks when we think markets are bullish. But in recent weeks, there has been a broadening out of markets, presenting new and interesting areas of investment.

Here are some broad brushes.

ETF / Stocklabs score (0 to 5 best)
$FXI (China): 4.71
$SVIX (inverse volatility) 4.44
$XLU (utilities) 4.37
$XLP (staples) 4.09
$WEAT (wheat) 3.74
$XLF (financials): 3.36

The defensive nature of those sectors could in fact be lagging indicators, a market that might’ve passed. Reason being: markets spiked on Friday with some outsized returns in your traditional tech names: $AAPL,$INTU, $SHOP, $NVDA, $MELI etc.

With $BTC sitting close to $64,000 and trending up, we may begin to see a rotation out of defensive into risk again. This is typical during earnings season. Stocks come under pressure when reality is unfolded and then go back to fantasyland once the ordeal is over. In many respects, we’ve been in a fantasyland over more than a decade now, with losses papered over, crises extended and delayed, FOMC intervention at the slightest sign of market turbulence etc. I have very strong opinions about all of this and nothing will change whilst times are good and why should they. Men will not mobilize when they have ample cigars in the humidor and the best bourbon money could buy in their at home bars. You might not like it, but that’s how society works.

Change only comes during hard times and hard times are never enjoyable to endure, same with bear markets. The novelty of the bear quickly wears off, giving way to panic and disquieting fear. I think it’s fair to assume the current trajectory is unsustainable but the timeline expiration is also undetermined. So we trade the tape in front of us and wait.