A Comment -- General Comments From an Expert (A Commentary)

Last week, it was sell the rallies. This week, it's buy the dips. Who knows what happens next week? This year is all about active management. You have to go with the flow, go with the momentum. 

In these volatile markets, stick to your discipline of buying in thirds. Not only buying in thirds, but also sell in thirds. Sell 1/3 within 5% of price target, another 1/3 t price target, and then re-examine and re-evaluate the price target for the final 1/3.

He'd have thought that if we were in danger, it would have happened already. Whereas all we had was a 5-6% pullback. 

We started the year with expectations for 6-7 interest rate cuts in the US. Then it went back to 3-4, and now it's probably 1 or 2. Some are even saying none until next year. With that backdrop, it's pretty amazing that the stock market, particularly the NASDAQ, has hung in there. 

However when you look at the Russell, it's a different story. Smaller-mid caps are more sensitive to interest rates. Large caps have a lot of debt, and interest rates influence them, but they have constant cashflow. 

There's a benchmark provided by the American Association on Individual Investors. It very much shows when things get overheated or oversold. As of a couple of weeks ago, it was overbought. The end of last week, it was oversold. So the pendulum keeps swinging faster and faster, and you just have to keep your eyes on the overbought/oversold benchmark.

You can almost pick any of them. Even TSLA was a bit of a surprise, and you had to have a lot of faith in the whole robotaxi and FSD concept. If he were to pick one that would stand out, he'd choose GOOG. 

GOOG reports tomorrow. Today is MSFT and IBM, and they should do pretty well. Interesting in how GOOG frames the whole Gemini offering in AI. Gemini stumbled, but has now come back into fad. So you could look to add that one.

He'd have to look at all the price targets, but one that's been beaten up is AAPL. But it probably won't spotlight its AI until June. Probably the most limited downside at this point, so you could add that one.

His buy points are constantly changing, much like the price targets. Sometimes he buys into strength, but it doesn't often happen.

For example, look at NVDA. He took profits, as it was bumping up against the price target. But after it reported, he realized that the price target was much lower and bought into that strength.

Drop the guest a line and he's happy to chat about how a particular stock's price targets may have changed.

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The Fed has been selling many bonds yesterday and tomorrow at attractive yields, which is compelling shareholders to sell shares to buy those risk-free bonds.  Also, the Fed is expected to cut rates later this year. This puts pressure on stocks.

Looking at the cycle forecast of the indices over 7 years, Williams correctly predicted the Nasdaq peaking around March 15 followed by extended weakness (true), and a bottom around October 22. He calls the current decline to continue till around May 20. He also called the S&P peak around March 7 (he was slightly early). Another indicator if the Dow vs. bond prices, which indicates that the Dow will fall further.

We need to see Q1 earnings growth and to hear moderating impacts of inflation. Labour demand remains strong and input prices could rise as commodities rise. Holding some US stocks offsets the strength of the US dollar in a portfolio. Also, lock in yield with the US 10-year now at 4.6%. You can buy bonds at 5-5.55%, and hold part of your portfolio in these.

As long as US unemployment remains below 4%, he predicts the Fed won't cut interest rats.

Peak of earnings season this week - earnings  are tracking higher than consensus (concentrated in large tech names). Geopolitical risk, and interest rates main concern for falling markets last week. Rising cost of money (potentially) is concerning for investors. Without "Mag 7" names - not much earnings growth in markets. Energy companies performing well, but broader markets not as strong. 

Believes market entering into correction territory. Investors should look to old market "highs" to see previous support levels. 4800 price seems to be the previous level which the market was at. Trend lines also important for investors to study in order to determine where S&P 500 may find support. If US Fed decides not to cut interest rates, markets could fall below 4800. Would recommend buying around the 4500-4800 S&P 500 price level. If US Treasury decides to fund debt payments with debt instruments, bank stocks will sell off. A lot of market directions will depend on US Fed actions. Catastrophic fiscal position (large amounts of debt) a major concern. 

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We're just weeks away from Trans Mountain opening and bringing Canadian oil to the BC coast.  This is very important. The difference between WTI oil and other benchmarks has been shrinking and will continue to. There's a lot of free cash flow among Canadian energy stocks, which won't rely on oil prices rising to remain strong. Cash flows and share buybacks will increase in the future. A weak loonie helps Canadian companies, and many of these will hit their debt targets this year. Nat gas: a warm winter means high supplies, but nat gas shares have been climbing on the buildout of the LNG pipeline which will start operating in June/July. Expect volatile gas pricing during the shoulder season, but look at 2024-6 for better days ahead.

Stock market multiples are high, and does not think markets will go higher than current levels. Believes it will be hard for stocks to advance as much as previous quarter with high inflation rates. Not expecting US Fed interest rate cuts until fall 2024 - at the earliest. Markets in Europe are seeing inflation going down faster that North America. Seeing opportunities in individual stocks that have been overlooked by tech focused investors.