April 17, 2024

(INVESTORS INTERPRETATION OF DATA MOVES THE MARKET – OPPORTUNITIES ARE SETTING UP)

April 17, 2024

Hello everyone,

The stock market correction. What’s it all about?

Lingering inflation concerns. We know it will be higher for longer. Fed will react to economic data eventually.

Rising Treasury yields.

Turmoil in the Middle East.

Healthy correction in a bull market.

Corrections are common in bull markets and the speed of recovery is relatively fast. There have been 24 corrections since World War II with an average decline of 13.9% and lasting about four months, and it took the S&P 500 four months to recover all that was lost in the decline, according to Sam Stovall, chief investment strategist at CFRA Research.

A 10% decline is defined as a correction in one of the major stock indexes. A 20% or greater decline indicates we have moved into bear market territory.

CFRA Research shows us that if we go back to 1990, the market fell an average of 14.7% in a correction and was able to recoup the losses in the correction in only three months.

So, for long-term investors – it’s better to hang on than to jump.

With the S&P 500 now sitting below its 50-day moving average, we may have further downside to go. We will probably see relief rallies, but while the S&P 500 is below 5114, the risk is to the downside.

The way to look at this correction is as a healthy consolidation after a very strong return in the first quarter. It doesn’t change the fundamentals. We should continue to rally into year-end, but it won’t be a straight line.

So, where should we be looking for opportunities?

There will be continued demand for AI and AI-related technologies. Therefore, we should have our focus on AI software and semiconductor companies. Additionally, let’s not forget global commodity producers and miners, particularly those related to copper.

Miners (Copper) (FCX)

AI – Nvidia (NVDA), Microsoft (MSFT), Advanced Micro Devices (AMD), Amazon (AMZN),

Taiwan Semiconductor Manufacturing Co (TSM), Applied Materials (AMAT), Dell Technologies (DELL), Meta Platforms (META)

Miners (BHP), (RIO), (CVX)

Of course, this is not a complete list of every company in the categories I’ve mentioned. But it’s a good place to start.

This is a very sad sign of the times. In just about every shop and place of business I go into today, these signs are present.

Cheers,

Jacquie

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.