No Moves for Now, FOMC Meeting Dec. 13-14


I've been watching some charts closely looking for indicators. A number of stocks are showing topping-type behavior.









Stocks that look topped (for now at least) I am in no rush to add. They may still have room to run (if the market reacts favorably to the FED meeting plus historically strong moves up in mid to late December). But zooming out to a macro view of SPX, a pullback would fit the 2022 pattern.

 

CELH is also quite expensive 72 Price to Cash Flow FWD. CELH's growth potential is tremendous, but the stock may trade at an elevated valuation for the foreseeable future.

The golden star on the CELH chart represents a retrace of the parabolic that began in November. The golden star of the SPX chart represents the predicted pathway (which played out) and a possible reversal point (just as the previous reversals upon reaching the upper limit of the trendline).

Obviously, not all stocks looked topped. Some are still hanging near the low end of their valuation.



On the one hand, the beat-down growth stocks are historically cheap. On the other hand, they are more volatile -- they have deeper dips and higher runups. I like the idea of adding some historically cheap growth stocks in small bites while also buying some protection with stocks like MA, CB, TRTN, etc.

I prefer to wait until after the FED meeting and after the holidays to deploy cash. But I may start a small position in MA, as I like the stocks for the long-term, as protection, and the valuation is not prohibitively overvalued (I'd say it's fairly valued to slightly overvalued).

Things are complicated in the market and there is a lot of uncertainty. As such, unless a stock offers a tremendous opportunity (i.e., high growth and low valuation), I choose to tread carefully.

Enjoy the rest of the weekend!

This website is created and authored by Marlin Sandlin and is published and provided for informational and entertainment purposes only and merely cites my own personal opinions.  I am not a financial advisor, and this website is not intended to constitute investment advice or provide specific advice or recommendations for any individual or on any specific security or investment product.  Any action you take upon the information you find on this website is strictly at your own risk.  This website may share links to articles and information which is interesting to me, but it is in no way an endorsement by me or by anyone associated with me.  The views reflected in the commentary are subject to change at any time without notice.   I may or may not hold investments in the companies or securities discussed on this website.

Marlin Sandlin owns shares of Mastercard (MA), Chubb Limited (CB), and Triton International Limited (TRTN).

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