To The Moon

Under normal circumstances, the trend of stock market determines the direction of the individual stock. To be more specific, 3 of the 4 stocks follow the direction of the market. In addition, the trend of the broad index is also consistent. For example, if small-cap stocks rise, the Nasdaq and larger-cap stocks also rise.

With this in mind, the U.S. stock market in 2023 is very special, with serious differentiation. Most major stock indexes are still up year-to-date, but 60% of stocks are trading below their 200-day moving average. $iShares Russell 2000 ETF(IWM)$ fell 0.5%, while the $SPDR S&P 500 ETF Trust(SPY)$ rose 8% over the same period, while the tech-heavy $Invesco QQQ Trust(QQQ)$ rose more than 20%.

Clearly, Wall Street is sending mixed signals. However, in addition to the major stock indexes, investors who want to know more about the market's next direction can focus on these stocks.

1.Regional Bank Stocks

So far, the "black swan" of 2023 is the collapse of the U.S. regional banking sector that has triggered weakness in small-cap stocks. $SPDR S&P Regional Banking ETF(KRE)$ has down nearly 40% so far this year, approaching its lowest level since the pandemic 2019.

Regional banks such as $SVB Financial Group(SIVBQ)$ , $First Republic Bank(FRCB)$ , and $Signature Bank(SBNY)$ of New York could not withstand the policy impact of such a "hawkish" Fed, so they either went bankrupt or were replaced by banks with stronger capital, such as $JPMorgan Chase(JPM)$ and $First Citizens BancShares(FCNCA)$ were cheap buys.

While the market has weathered the shock, the sector needs to stabilize if the U.S. market is to continue to move higher.

2.Semiconductor Stocks

One big rebound concept for 2023 is the surge of the semiconductor industry. After a brief earnings deceleration in the tech bear market, earnings expectations have risen as AI mania prevails.

A key growth driver in the current market is AI, and semiconductors play a vital role in the process of promoting AI technology, and are also a necessary element for AI companies to generate stronger computing power and improve efficiency. In the field of semiconductors, $Advanced Micro Devices(AMD)$, $NVIDIA Corp(NVDA)$ and $Rambus(RMBS)$ are three stocks worthy of attention. In addition, investors can also track stocks like VanEck Semiconductor ETF (SMH), etc. Semiconductor ETFs .

3.Big Tech Stocks

Cash-rich big technology companies are the base camp for all institutional investors' funds. The combined market capitalization of $Apple(AAPL)$ and $Microsoft(MSFT)$ has even surpassed all constituent stocks of the Russell 2000 index. Still, smaller tech stocks have underperformed larger-cap stocks so far, with the $Invesco QQQ Trust(QQQ)$ nearing its 52-week high, but the $Direxion NASDAQ 100 Equal Weighted Index Shares(QQQE)$ trading off its 52-week high set in February. It's still far away. However, the $Direxion NASDAQ 100 Equal Weighted Index Shares(QQQE)$ outperformed the market and reclaimed its 50-day moving average on Monday, which is a bullish sign.

If the market wants to maintain its upward trend, either super market capitalization technology stocks like $Meta Platforms, Inc.(META)$ , $Alphabet(GOOGL)$ or $Oracle(ORCL)$ continue to lead the rise, or small and medium market capitalization Technology stocks also participated in the gains. Of course, a sustainable bull market requires strength in both types of stocks.

4.Gold

Precious metals are often viewed as safe-haven assets. Countries like Russia and China are seeking to de-dollarize in order to reduce their reliance on the $USD Index(USDindex.FOREX)$ , the global reserve currency. Will they succeed? That's still an unknown, but investors can look for clues by watching the movement of gold prices. $SPDR Gold Shares(GLD)$ s attempting to break out of a multi-year consolidation range.

Regardless of where gold goes, investors should remember that gold and stocks occasionally move in the same rhythm. In other words, if the price of gold breaks out, it doesn't necessarily mean the stock market is out. Whatever the scenario, gold is a good hedge and diversification tool at current levels.