The February – March period is time for investors historically a wait and see attitude. Seasonally, this lines up with the in between earnings period where other factors tend to get front row seats…. geopolitics, domestic politics……all things China and doomsdayers.
A break in the Magnificent Seven may in the cards and shift for a short-term return to value investing in the context of a sector rotation is what we see. Market participants may well take refuge in the value stocks that have had a much more muted participation in the rally since October.
Here are the support levels to watch.
S & P 500
Initial support is in the 4920 area, although a breach of this area would remind us that the first sell signal in a strong uptrend many times is false. Below that is Mid-point on the trading band – 4840 to 4880.
Nasdaq
The area to watch here is 15400 to 15500…….first sell signal and Nasdaq’s trading band mid-point.
Odds are very good that next week’s Triple Witching will lead to an increase in volatility. Take advantage of this to rebalance. Consider new positions in the Building Materials / Suppliers sector as well the Restaurant sector.
