Defensive, not bearish
Where we are
Right now I am not concerned much with which direction we go next. The past week has naturally taken me out of positions and reducing exposure. If we correct lower, or break out and trend higher, adding/reducing exposure takes care of itself.
My main focus is that this current market environment is rough. Chop is always more dangerous than actually crashing because everything looks like opportunity when its not.
I shared some stats yesterday below. June has had almost 50% of days with big overnight gaps. The average range in the market as more than doubled while at the same time going nowhere. This is where progress is given back and the most important chart for me is my equity curve.
Themes
The most important groups still remain Semis + AI Infra stocks like Neoclouds, however they've shown the biggest weakness last week and look like they need time to setup again.
The recent RS has been in Cybersecurity + Healthcare.
We also saw rotation into Software again. There are good looking stocks in Software I would buy but the group as a whole is what I consider junk off the bottom and likely only takes the baton while Semis + AI Infra rest.
Constructive chart near highs. This is a healthy looking group. It trades organized and tight.
Compare this to Cybersecurity above, this chart is wide & loose, near lows, sloppy.
My plan for the week
Overall because of how choppy and difficult this environment is I am not looking to be aggressive until that begins to change. The current groups showing RS are not the quality growth groups I want to build a position in.
I am focused mainly on Cybersecurity stocks this week for potential swings but will be more aggressive to take profits off the table.
The overall focus for me remains the Semiconductor and Neocloud leaders. Ideally they rebuild bases and allow new A+ entries over the next few weeks.
I am not bearish, I think the market is going to likely resolve higher and continue its uptrend, but right now the no direction, high volatility, big overnight gaps, and chopping my account -6% off highs has me focused on preservation both financially and mentally for when the market becomes easy again like April/May.