From the desk of Vance Howard:
On Monday we did get a new buy signal on the HCM-BuyLine® which will pull us back into the markets. With that said, the market is way overbought so a technical pullback is a very high probability, therefore being a bit patient at this juncture is prudent and re-entering at a modest pace is advisable. There is lot of road left in 2022, and we are only in the third round of a twelve round fight so there is no reason to push it too fast. There are a lot of good deals out there, such as Salesforce (CRM), AMD (AMD) and Microsoft (MSFT) just to name a few, but in looking at the charts we are hitting major resistance, especially on the Nasdaq, and represented here by QQQ which is hitting its 200-day moving average.
To be clear, we are looking for a buyable selloff in the next 2-3 weeks.
There are lots of reasons for the turnaround, such as it looks like the Russian money has been depleted, and bonds have gotten so bad that stocks are the only option. TLT, the ETF of the 20-year Treasure, is now down over -12% YTD and this might just be the beginning of the selloff. There will be a lot more rate increases this year so bonds could go even lower.
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