Entering text into the input field will update the search result below

The 'Levitating' Stock Market (And Sentiment Results)

Apr. 02, 2021 3:55 AM ETHRB, WFC, XLU, XLP, PPH1 Comment
Thomas J. Hayes profile picture
Thomas J. Hayes


  • Infrastructure plan: Sell the news?
  • Inflation impact on stock market performance.
  • Sentiment and positioning.

This week we chose Dua Lipa's billboard hit (featuring DaBaby), "Levitating" to capture the current status of the stock market. She describes it well with her lyrics:

Woo-hoo I'm levitating (woo) Come on, come on, come on, dance with me I'm levitating (Come on, let me take you for a ride) I'm levitating (woo)

While it may feel like the market is "Levitating," when we look at performance by sector - it shows what has run and where there still may be opportunity:

The good news - for those of you who have followed me for some time - is that we were dramatically overweight banks and energy since before the election.

The bad news is - we may have to wait some time for the next leg higher. We are holders at this level, not buyers - and would not be surprised to see these Q1 winners take a rest. We are not sellers because we believe this rest will support a move to new highs before year-end and beyond.

@BespokeInvest put out these two tables which show the inclination of Energy and Financials to rest for a few months after a 20%+ quarter:

It would not surprise us if past is prologue, and our winners from Q1 do not help us much in Q2. If that proves to be the case, where will we look to keep our equity curve moving up?

On Feb 25 and Mar 4, we emphasized that we were loading up on Utilities, Cons. Staples and Big Pharma. All had one thing in common at the time we wrote the notes - they were negative for the year. That has changed quickly in four weeks:

If you notice from the sector performance table at the top of the article, while they are all now positive

This article was written by

Thomas J. Hayes profile picture
Tom Hayes is Founder, Chairman and Managing Member of Great Hill Capital, LLC (a long/short equity manager based in New York City). He started Hedge Fund Tips as a platform to share actionable insights, tips and research for investors/traders to benefit from – based on what he has learned in his years of experience in the Hedge Fund industry.Read Tom's bio here: https://www.hedgefundtips.com/about-tj-hayes/ To get our Free Newsletter go to: https://www.hedgefundtips.com/free

Analyst’s Disclosure: I am/we are long WFC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.


Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.