Riding the Bull: First Quarter of 2023 Shows Encouraging Results for Investors

The first quarter of 2023 ended on a positive note, with the S&P 500 finishing in the green for four of the past five sessions, resulting in a 7% increase for the quarter and consecutive growth in the second quarter. In addition, the markets remained stable as no significant banking failures have been reported during the week. The banking crisis from March has been downgraded to turmoil. Our January newsletter highlighted some key indicators pointing towards a positive year ahead, and the encouraging results of the first quarter reinforce this perspective.

The SPX broke out with higher volume which made the accumulation more solid on the last day of the 1^st quarter. While The index has stayed above its short-, mid- and long-term MA, and apparently will challenge the previous high which is around 4195 soon. The long-term resistance that between 4195-4325 is tough, along with bullish perspectives stated in our January newsletter (https://mailchi.mp/7f6f68d3d957/the-bull-market-conundrum-to-hike-or-not-to-hike) , more bullish indicators are showing that the uptrend momentum is strengthening. Such as Breadth Thrust, which occurs when ten-day total advances on the NYSE are greater than 1.97 times ten-day total NYSE declines. since World War II (an average of once every 3 1/2 years). Breadth Thrust has historically followed cyclical bull markets. It is hoped that it will be triggered in 2023 as well.

Our long-term investment portfolio returned 10.82% in March and has gained 51.85% since May 2020.” (Click for our latest portfolio performance report). Meanwhile, our dynamic investment portfolio increased by 7.11%, resulting in a total return of 14.28% since May 2020. Some of our structured notes that link to the banks got hit during this banking crisis, however, since the expiration date is set for 2026. We believe the banking sector will get a chance to recover.

One interesting thing that needs to be mentioned is the investors’ sentiment has dropped to the extreme pessimism level. From a Contrarian perspective, this is another bullish indicator.

The current state of the market is indicative of a potential market melt-up, which occurs in the transitional period between market depressions and the return of investor confidence. Barring any unforeseen and significant market corrections, the market seems poised to continue its upward trajectory. This trend provides a positive outlook for investors who can expect to see increasing growth and stability in the market in the coming months.