What Coronavirus that virtually has shut down the entire second largest economy in the world? It didn’t matter, the market has gone off the rails. It seems that there is nothing right now to stop the rally. The rest of the world is on life support, the US mega cap tech growth companies offer rare opportunities that provide growth and stability.
That’s why even a scary coronavirus breakout in China is not stopping the rally. This rally started in early October. The quick selloff of 3% finished the weekly cycle bottom process in one week, which ended on 01/31/2020. The new weekly cycle is two weeks into the current cycle. Base on the seasonal pattern, this rally could last until sometime in April.
The S&P 500 upside resistance is 3500 which is only 3.5% away from the current price level. We shall see how the market reacts to the resistance around 3500. For now, we just have to go with the flow.
The genomics sector is one of the new investing themes in this decade. The recent IPO stock 10X genomics (ticker TXG) has a very compelling case. The valuation metrics look very expensive now, but if you believe the opportunities ahead in the genomics revolution, then it is cheap. We are buying dips of this stock. It will report earnings on Tuesday 02/18/2020 after the market close. It should go up based on the cycle counts. It recently just had a 23% correction. The growth stocks like TXG are very volatile, be mentally prepared for the rough ride when you try to hold a winning stock.
This current bull market is a secular one, meaning it can last another 12 years. Therefore we have to take advantages of the market corrections to load up quality growth stocks. That’s why we have been trying very hard to time the market to find out good entry points for the stocks we wish to hold. 75% of the stocks trend with the general market.