DailyPlay Updates – March 10, 2023

Investment Rationale

Investors faced new bearish news on Thursday, with Silicon Valley Bank (SIVB) coming under selling pressure that you rarely see from a S&P 500 name. It dragged other financial stocks lower on concerns of spillage to other banks, and the SPX closed down 74 points in what proved to be a very ugly session.

SPX – Daily

This picture is a worsening one, now trading lower than the early March low, and potentially heading next to test the December lows and the Propulsion Exhaustion target at 3779. Obviously, today’s unemployment report and next week’s inflation numbers will materially affect the Fed’s rate change on Wednesday March 21. The one thing I can tell you is that I will continuously look to fade market rallies so long as the SPX remains beneath 4148. In SPY terms, that resistance is likely now in the 401 to 404.50 zone. Should we get up there today or any day next week, I’d be leaning into that rally to stay with the idea of reducing overall long-term exposure to the market – something I’ve personally been continuously doing for the past 12 months.