Slow But Steady Work

While it is true that a high-flying growth monster from earlier this winter and especially last year, like FUBO, is off to the races again today, or so it seems, the reality is that for many of the former hotshot stocks this market has become a tedious grind. After weeks of trending lower and correcting both the frothy sentiment, abnormally steep charts, and generally over-exuberant valuations, a fair amount of them failed to bounce forcefully this week despite the major indices mostly moving higher, namely the Dow and S&P hitting new all-time highs. 

Thus, the market, even amid bullish seasonality, may be reinforcing its message that we are shifting to a regime where value matters. And the hot money traders who extrapolated their previous eye-popping gains out several years ahead may need to manage expectations if they wish to simply survive the long, hot desert of what this market could prove to be come summer. In other words, I suspect it may prove to be an economically fatal mistake to thumb one's nose at boring, dividend value plays like CVS returning 5% a year, or more, in lieu of chasing another GameStop-type of return. 

Focusing back on the here and now, I am tightening things up a bit into the weekend as I do not want to give too much more room to some beaten-down names I tried for relief rallies. While I sold a name like ZM for small win earlier and not some brutal loss, I still do not want to get in the habit of holding busted charts and being put in the position of hoping for an eventual bounce. In fact, I would rather hold a name like Dynatrace, below on its updated weekly chart, since it at least has shown impressive relative strength to software and even saw a weak open this morning get bought up. 

Overall, although I have not yet found the spots nor motivation to go short yet, I am mindful of not being lulled to sleep by a mixed, sloppy, albeit resilient-as-can-be market. Bullish seasonality will not last forever, and my focus is on keeping a tight leash on names not moving with purpose and vigor within a reasonable period of time. The newcomer traders, especially, from March 2020 would be well served to note that trading is often slow, but steady grind, at least by those who stand the test of time in the market.