U.S. & China Investment Opinion (Briefing): 2H 2023 Will Not Be So Easy

Investment Guidance: Investors should prepare now for 2H 2023

The Bull Case has decisively won in 1H 2023. Will he have such an easy victory in 2H 2023? I don’t think so.

Members,

As conveyed in previous notes and my Weekly Dashboard, I have been aggressively proactively reducing equity exposure at these swing highs.

I am quite pleased by my personal accounts and long-term retirement accounts having appreciated in the 19-22% neighborhood so far in 2023, and I personally see little reason to take large risks now that we start looking at 2H 2023 where the Unemployment rate is likely to rise significantly from here.

Long-time readers know that my stance has been largely defensive, and my macro view is that we will enter a recession sooner rather than later.

However, this has not stopped us from taking advantage of numerous tactical offense calls that have played out in the context of defensive position. These opinions were released in just the past 2-3 weeks alone.

• United Health (UNH) making a nice swing bounce from 460 into the 475+ region

• Adobe reaching my 500+/share target and then fading as soon as we talked about selling “immediately” at the open post earnings

• Tesla serving its purpose as a 1-day Intraday Trade opportunity from 260 to 275 on June 20th and selling before the close.

• Retail Thrift Shop providers Dollar General and Dollar Tree now bouncing from swing lows

• And lastly, Sector Rotation benefiting equal-weight RSP ETF to create an outperformance gap between it and SPY over the past week

• Reducing China at key levels discussed in my Weekly Dashboard

Being a Bear does not mean you have to lose when markets go up. Your goal as a Trader/Investor is to make money regardless of your bias.

My opinion for a deeper correction in the S&P 500 has eluded me (for now), but Traders and Investors should know that market pricing is ephemeral and what the price is today is offered at different prices tomorrow.

Best to know what this word means if you are an Equity Investor

And in any case, I do not let my large timeframe bias stop me from what is most important: finding investment account growth ideas that the market provides.

As a valuable lesson to all who wish to grow as Traders and Investors, remember that it is very possible that you can be “wrong” and make money. On the flip side, you can be “right” and lose money.

It has taken me years to understand this, and many more years to apply.

My operation is that I look for many small conservative win opportunities to continue stacking the edge in my favor.

Over time, my win rate on stock-selection is about 60-65%.

It’s not 90% or something crazy (don’t expect miracles from me - I am a mere mortal). Combining a win rate that’s over 50% along with thoughtful positioning sizing and exits, and I eventually have a statistically repeatable system that works when markets rise, fall, or chop.

If I’m seeing a position fall while the markets go up, I do not hesitate to eliminate the position. Relative strength against the market is one of the most important principles I adhere to. You can say I have a 5% rule. If I see more than 5% underperformance in the name *relative* to the index, I take the loss, and move on.

The markets are open 5 days a week, 250 trading days a year, so there are many opportunities that are being set up in the background. There is no need to FOMO. Let prices come to your pre-planned level (or in our Community’s case: my Dashboard Levels).

The stock-selection opinions & context that have been shared to the folks here is precisely how I position as well.

In this brief note, I’m going to concisely talk about a couple actionable items:

• Geopolitics on U.S. - China Relations Reset: Secretary of State Antony Blinken’s visit to China - my opinion on Investment implications

• Technical Analysis Update on U.S. Markets: Intermarket analysis and key levels to be paying attention to as markets potentially roll over

• U.S Macro Commentary: My opinion on what Jerome is doing with rates, and why I believe the Fed is on the verge of making a policy mistake that will cost investors dearly.

2H 2023 is starting momentarily, and it would be best to prepare accordingly.

My Community serves those who have patience and the willingness to see ideas play out.

Without patience, there is no alpha. Markets are designed to take advantage of impatience.

So, do you have patience? It will be of utmost importance. Especially as we enter the second half of this year where macro landmines await those who get in far too late.