1/6 Best Idea For The Week Ahead

We got off to a rocky start this year, after 9 weeks up to close 2023, a red week wasn’t the most surprising thing to see. As we saw in 2022, no matter what other sectors do, the reality is, without big tech participating, the overall market isn’t going anywhere. When the largest company in our markets, Apple, goes down 5% in a week, the market tends to struggle. As you can see below, we do remain over the 8 week, maybe we pullback and touch it and go, only time will tell, I do remain in the camp that overall, into an election year, we likely will have a strong year as it wouldn’t be helpful to Biden’s re-election bid to have a weak market/recession/war/ into November.

When you look at the holdings of the SPY, 8 of the top 10 components are tech, and even the Berkshire is basically tech because half their book is Apple. So just the top 10% of the market, right around 30% of the S&P, is the megacap tech names. Our market is tech driven, so it may be a few sessions or weeks, but if the markets are going to do well this year, they eventually have to come back to megacap tech. There is nothing in the numbers showing they’re going to have a bad year really outside possibly Apple, but even then a bad year for Apple means $100B in profits on declining sales, that isn’t really my definition of a bad year.

Typically I like to post a best idea every weekend, but I just don’t have enough options data having taken the previous 2 weeks off, so for this week I’m just going to post a name I like because it has a really nice chart setup even though I haven’t noted anything on it in 2 weeks, the sector is doing great and I’m going to look over what trades I have open in my database, potential trades we can put on, and what analysts are looking for below.