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There’s a chart in here. It’s deeper in the post than usual.
But first, I have to confess:
Markets rarely make sense.
You’d think that after all of the writing I do here and all of the books on investing I’ve read and all of the mentorship I’ve received and all of the accounts I’ve blown up that I’d have a handle on what trades to take and what trades to pass on.
But once again, this market defied my expectations and ripped in my very face, shortly after panic selling a 2x levered long Oracle fund because the market was having a green day but the stock was down.
“But I thought the relative weakness meant the stock was about to turn lower!”
Nope.
I just checked the fund, it’s up 34% since I sold it.
Maybe these are the dues I pay as a 26 year old learning how to invest? I’ll count it toward my tuition, but damn, this is an expensive degree.
Back to VOO I go. Investing is hard.
On the topic of markets rarely making sense, here’s a chart that I thought would paint the picture well for you guys.
It felt, for a short while, that we were entering a new regime. Where semis were taking a break and the rest of the market was going to play catch-up.
Is there still some of that going on? Sure.
The Mag 7 is lagging and the “other 493” are certainly pulling their weight.
But over the past two weeks, everything that got crushed leading into the short-term bottom on 3/30 is now ripping higher.
And vice versa, the stocks that were ripping into 3/30 are now the market’s biggest losers.
A complete flip of the script, if you will.
CHART ON
Feast your eyes on this, people.
The chart shows the industry groups contributing to the S&P 500’s loss from 2/2 to 3/30 along the X axis and along the Y axis it’s showing how those same groups are now contributing to the gain since the 3/30 short-term low.
See that double black diamond trendline? I could ski down that thing it’s so steep.
That’s my way of showing you the relationship between the losers into the 3/30 low and the winners coming out. It’s been a complete swap - Freaky Friday style.
Thank you, as always, for reading!