No reason to panic now!

Staying long until lower lows on small cap value momentum...

I stand to my bull case until the tape changes, there is strength under the hood!

The fed controls this market, as soon there is froth, the fed players come out and push down the market with hawkish comments. The moment we get close to a panic they come out and play the soft game. The fed wants a soft landing without the stock market to crash. Remember, next year we have an election. There will be massive political pressure to not crash the market and the economy, and the fed reacts to political pressure (like 2018, 2019). The window to crash the market is closing for the fed!

And the inversion of interest rates is not the problem it is reversion that kills and that is not the case right now.

Not sure if they get a soft landing (in my view nobody knows, we read the tape!), but right now GDP is developing well.

Positioning is still very bullish. We see hefty outflows, tons of cash on the sidelines and a bullish COT positioning.

Let us stay open for both possibilities!

SPY Stocks with good fundamentals:

High Beta Quality:

Small cap value momentum with a quality + earnings revisions tilt + breakout behavior:

Small cap value momentum quality without earnings disappointment:

Line in the sand are lower lows on above systems, until then I stay long.

There has been so much presure on the market: interest rates are up hard, Dollar up and still we did consolidate in a (relative) cool fashion! In this context, this is a strong tape!

This consolidation should take some time, the worst thing that could happen here is that we jump to new highs in no time with mean stocks leading (like in Jan.).

My best guess, we consolidate with an upward drift with bad days in between to break the nerves of the bulls.

Breakouts: from what I see is that only breakouts work with great earnings surprises + a very good outlook or super, super bullish news. Problem is the outlook is often only posted later in the earnings call and not upfront, so very though to play those EPs.

Story stocks are dead right now (finally!), there needs to be a good reason the market wants stocks higher, and they are usually not very well known.

Also make sure you do not trade EPs that are well known within fintwit, they usually disappoint. AI 0.00%↑ posted good numbers yesterday, but I will not play it, there are just too many people watching this stock.

Here is a list of stocks with leading fundamentals close to the upper donchian channel.

It is a very long list, but drill down to see what the market prices in now.

Remember, within a drawdown of the market you see relative strength, working time is now!