Today brings the selling that many expected after Wednesday’s Fed meeting

Today brings the selling that many expected after Wednesday’s Fed meeting

Yesterday, growth stocks climbed in the face of signals from the Federal Reserve on Wednesday that interest rates increase were coming sooner–as soon as the end of 2022–than expected. That seemed puzzling. May be, one line of thought (mine) had it, investors and traders decided that growth stocks would outrun any increase in interest rates that might take place in 2022 or 2023. Today, we got the selling that many had expected yesterday

Special Report: 5 Picks and 5 Hedges for a Falling Market–today’s new installment “What happens when a momentum market loses its momentum?” with my #5 stock pick

Special Report: 5 Picks and 5 Hedges for a Falling Market–today’s new installment “What happens when a momentum market loses its momentum?” with my #5 stock pick

Before I get around to making the fifth and final stock pick in this Special Report: 5 picks and 5 Hedges for a Falling Market, let me take a moment to bring my survey of market conditions up to date. Where we are now has a strong influence on what stocks to own and buy and on how to hedge against any downturn. The question I’ve asked in the headline to this post is the critical one now: What happens when a momentum market loses its momentum? I think investors and traders can answer that question by just looking around them.

These are the markets that try portfolio’s souls

These are the markets that try portfolio’s souls

I’d like to think that the volatility of last week is all over and a thing of the past. But I don’t think it is. This is a transitional market with sentiment moving toward value, cyclical, and post-vaccine stocks and away from technology momentum plays. And it’s also a market trying to figure out how to reprice all assets in light of a potential move to lower stimulus bond-buying and to raise interest rates at some point in the future. These kinds of transitions don’t occur smoothly and I think we can expect more volatility.

New buy-on-the dip targets (as of May 14) for the Dip-O-Meter

Dip-O-Meter update for April 9–time to give “buy on the dip” a rest for a few weeks

Looking at the recent performance numbers on the 20 stocks I’m tracking in my Dip-O-Meter as of the close on Friday April 9, I have to conclude that for most of these stocks it’s time to take a pause on any “buy on the dip” opportunities. What I’m seeing in this sample is a general weakening of the upward bounce on rally days from these stocks–and without a strong bounce on a good day there’s not much reason to buy on the dip.