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S&P 500 personality hasn’t changed

The S&P 500 personality during the COVID Recovery remains the same:

  1.   Media promotes a scary scenario (Riots, Inflation, Variants, etc)
  2.   Fearful investors sell
  3.   S&P 500 drops to 50 day-moving-average
  4.   Smart Money buys the dip
  5.   S&P 500 rises to record high

This exact scenario played out in full last week, from Monday’s dip to the 50dma to Friday’s record close. 

I can’t predict the exact bottoms and tops…so I just hold core positions and add to them during a pullback.  My core positions are concentrated in smaller companies that are favored by the ReOpening, thus they are risker than the general market and more subject to frightening headlines.  So far the risk has been profitable and I think the big payoff remains with the ReOpening trade.

I find the Oil sector particularly attractive right now.

Last week SolarWinds (SWI) completed its spinoff of N-able (NABL); I’m holding both positions in my portfolio.

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