To The Moon

On the cusp of a new quarter how will the US market marks the end of the current ?

With a big bang celebration & a come what may in Q2 2023 attitude or a conservative retreat ?

3 Indexes - Past 5 days performances

Volatility Index (VIX) - Past 5 days performances

PCE Feb 2023 (Forecast) - 4.7%

US Pre-Mkt Indicators for 31 Mar 2023

Looking at above readings :

• 3 Composite indexes - past 5 days performances

• Volatility Index - past 5 days performances

• Personal Consumption Expenditure (PCE) Feb 2023 forecast of 4.7%

• US pre-market indicators for 31 Mar

The educated & logical conclusion derived is market should be able to end Q1 2023 on a “marginal high” note.

How “high” will “high” be - that is the question that will be played out in less than 3 hours time (time check : singapore time 6:00pm) ?

I feel that if the PCE (Feb 2023) is 4.7% or lower - this may just be the relief that could propel the US market to head into another victory home run at US time 4:00pm.

While the stock market “maybe” trading sideways this Fri, what stocks should we continue to avoid or look into ?

The avoidance stocks should be an easy and straightforward one - Financial stocks.

Just refer to the following two “justifications”.

(1) Nasdaq Bank Index

KBW Bank Index

The Keefe, Bruyette& Woods (KBW) Bank Index is a benchmark stock index of the banking sector.

It includes a weighting of 24 bank stocks selected as indicators of this industry group.

They represent large U.S. national money center banks, regional banks and thrift institutions.

Looking at the latest index, it is underperforming its 200-day (black), 50-day (red) and 20-day (green) moving averages.

(2) New Financial Institution Saga

On the surface, Charles Schwab Corp. being swept up in the recent bank debacle, makes little sense.

The thing is the 52 years old mainstay in the brokerage industry :

• Isn’t overexposed to crypto like Silvergate Capital & Signature Bank,

• Isn’t exposed to startups & venture capital that felled Silicon Valley Bank.

• Has less than 20% of depositors that exceeds the FDIC’s $250,000 insurance cap, compared with about 90% at SVB.

Yet there is growing concern with Charles Schwab now.

As said, even before the dust has settled on US regional banks, a new brewing incident has reared its ugly head.

Its left be seen whether the Fed is going to do anything about this 50 years old institution.

In my yesterday's post I did touch on semiconductor stock $NVIDIA Corp(NVDA)$ as a possible investment.

There are still other worthy investments in the market.

No denying that Artificial Intelligence (AI) will be the talk of the town for a while especially with its many possible usages.

Thinking out of the box - investing in AI enabler stocks is another alternative. I am referring to the $2.155 Trillion market cap stock - $Microsoft(MSFT)$

MSFT's moving averages screams "Bull"

You will be pleasantly surprise to find that Microsoft meets the following stringent criteria :

• Composite Rating - at least 90.

• EPS Rating - at least 80.

• RS Rating - at least 80.

• Accumulation/Distribution Rating - A, B or C.

• Price vs. 21-day moving average - at least 1%-5%.

• RS line within 5% of new high.

• Price vs, 50-day moving average - at least 10%.

• 10-day line above 21-day line, which must be above 50-day line.

• Current price - at least $12.

• Average daily volume > 400,000 shares.

Rating (data) as of 29 Mar 2023

In summary, if Microsoft has not been on your radar - its time to keep a watch over this pedigree stock. I have just added this to my watchlist.

While I may not have the budget now; in the future if I do sell off my other shares, I might dollar cost average into MSFT if the price is “right”.

So what are you waiting for ?

• Do you think you would add Microsoft to your watchlist ?

• Do you think Microsoft is worth your investment ?

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