April 2024 Watchlist: Entry Points

Market Overview

Welcome back to The Wealth Catchers' watchlist. The month of March was a bullish one for investors. We saw all the indices, except the Russell 2000, hit all-time highs. We heard from Jerome Powell and got some reassurance when it came to rate cuts. Inflation still proves to be sticky, and there are expected to be three rate cuts this year. The 'higher for longer' theme still seems to be very present as we see that the labor market is still in a strong place "We don't need to be in a hurry to cut," Powell said. The Fed doesn't want to cut rates too soon in case inflation pops back up and they have to step in again. This would be a very troublesome scenario for the market. According to the FedWatch Tool there is a 60% chance that there will be a rate cut in the month of June. I believe the market has taken this into account and has definitely priced this in because we came into the year expecting 6-7 cuts. There wasn't a negative reaction to the reduction of cuts because I believe the market does believe the Fed is handling this correctly. We can also see that the market's gains are still continuing to broaden out as sectors like Financials and Energy are beating the S&P 500 YTD. We are also seeing that money flow to some unfavorable names that we have on our watchlist, such as IIPR, RTX and NEE. The fact that we see these stocks hitting highs in the RSI solidifies the rotation effect happening in the market as we see other sectors and names begin to rise and catch up. On March 28th, 2024, there were 82 stocks in the S&P 500 that hit 52-week highs. This is another indicator that this is an 'everything rally' and shows that we can confidently step away from the narrative of the Mag7 being the reason the market is up. Now there are still opportunities in this 'everything rally' that you may see talking heads shy away from or try to shed a negative light on. Prominent names that are down YTD are companies like Tesla (-29.79%), Adobe (-13.01%), and Apple (-7.63%). When seeing names like this trading at a discount in a bull market, it's very normal to see investors shy away from scooping up shares. It plays into investor psychology. "Why would I buy these when everything else is running in the market?" We see the media highlighting darlings like Nvidia and Super Micro Computer that are trading at all-time highs and creating FOMO. Remember, one of your goals as an investor is to be in position in order to take advantage of opportunities. In bull markets, you let your winners rise, trim to lock in profits if you want to, and buy dips in quality names. Quality names are presenting opportunities, take advantage.

Crypto & Digital Assets

In the world of crypto, everything is still extremely bullish. This market also has its own Fear & Greed index, which is currently at 80, indicating extreme greed. What many investors are looking forward to in the month of April is the Bitcoin halving, which is projected to occur on the 16th. This tends to be a bullish event that happens every four years, where we see the amount of Bitcoin being mined cut in half. There are also some filings for Ethereum ETFs that have been put in by Fidelity and Bitwise, which could also add to the bullishness of this market if they get approved. The spot Bitcoin ETF products has been extremely positive for the crypto market

Monthly Performance

At the close of the month, here are how the indices performed:Dow Jones (5.55%)S&P 500 (3.10%)NASDAQ (1.79%)Russell 2000 (3.39%)At the close of the month, the VIX was at 13.01. At the close of the month, the "Fear and Greed" index was at 71, indicating greed in the market.

Closing Note

I appreciate you checking in, and here's your friendly reminder:

“The time to buy is when there's blood in the streets.”

Keep on buying assets; there's always a bull or bear market somewhere. Keep your money working.