To The Moon

Last Week Friday, the University of Michigan's preliminary consumer sentiment index unexpectedly fell to 57.0, marking the largest monthly drop since November 2022.

VIX Volatility Index Surge 12%

This decline was below both the previous reading of 59.2 and the forecasted 58, causing the S&P 500 to break its intraday support level. The market reacted with increased panic, leading the VIX volatility index to surge by 12% to 22.8.

The report highlighted a sharp decline in sub-indicators. The current conditions index plummeted to 61.3 from 64.9, while the expectations index slid to 54.2 from 56.3. Additionally, the one-year inflation expectation rebounded to 3.2% from 3.0%. Following the report, the S&P 500 dropped 0.8% within 15 minutes, with the consumer sector experiencing significant losses.

The bears took control of the markets absolutely as we know that the front and center are these soft data points which Fed like to call its the consumer confidence and sentiment reports. So this is on top of the future tariffs which are among the uncertainty on the economy which are driving the markets down hard, because market does not like uncertainty into the future.

Investors Need To Exercise Caution When Looking To Buy Into The Markets Now

Now the markets does present very attractive buying opportunities once again similar to what we have a couple of weeks ago, but I think as investors, we really need to exercise some caution when looking to buy into these markets.

Especially into resistance on the QQQ and into resistance on the SPY, though we have daily uptrend control but the weekly bears are always in control on the trend, and they would make use of any piece of negative news to capitalize, these negative could be coming from the Trump Administration directly in the forms of tariffs or any economic data points that could also act as catalyst for the bears.

This has allowed them to really regain some of the short term control momentum which we have seen how they have been benefiting from in the past month.

In the article I would like to share on what I have been studying on the rotation and the market breadth especially on where are the monies rotating, especially into which sectors of the market.

That could lead to some very attractive buying opportunities right now for long-term portfolios or for some small swing trade action.

Forward Price To Earnings On Some Tech Companies Makes Them Attractive

$SPDR S&P 500 ETF Trust(SPY)$ was down about 2% last Friday and the $Invesco QQQ(QQQ)$ was down 2.63% overall. We are seeing a lot of sectors suffered largely from the consumer sentiment report as we looked at the heat map now.

Clearly the most damage was done on the technology again also on financials. There are some rotation seen in the healthcare into real estate and utilities, and we are seeing a bit of consumer defensives which are normally seen as value trade when we are looking at possible economic hard times and maybe recessions. But these sectors cannot be expected to move up directly but they tend to suffer a lesser blow.

This is why we have been seeing retail and institutional investors performing repositioning into some of these more dividend paying and more defensive sectors overall. What I am interested and would like to look at is the forward price to earnings on some of these tech companies.

It has become very attractive. $Microsoft(MSFT)$ 's Forward PE Ratio for today is 26.14. As of March 28, 2025, $Ford(F)$ has a forward price-to-earnings (P/E) ratio of around 7.15. We do not see Microsoft showing such cheap number.

$Amazon.com(AMZN)$ forward price-to-earnings (P/E) ratio is approximately 30.43. $Meta Platforms, Inc.(META)$ 's Forward PE Ratio for today is 23.88. Alphabet(Google)'s Forward PE Ratio for today is 17.54.

So these tech valuations are definitely coming down to a lot, it would be at more manageable levels than one month ago. But the damage was done deeply on the Friday session in just one week.

As we can see that the bottom half of the market was performing the best, and a lot of these damage brought down the SPY and QQQ in a big way, which was actually consolidated into a few major key large tech stocks like Microsoft, Nvidia and Google.

So now we will need to see which companies are at current attractive buying opportunities for long-term portfolios. I might also want to position my portfolio for some swing trades if the markets continue to decline in big Tech as the rotation out of growth into value continues.

Sector Performance - Damage Is Extensive

If we looked at the one-day relative, we will see that the only sector which outperform on last Friday session was Utilities, other sectors are all down in the red. Communication Services, Consumer Cyclicals and Technology was the biggest laggers.

The smaller laggers are in performance defensive sector like energy and real estate which we saw some best performers coming out from the consumer defensives.

On the monthly performance, we are seeing the damage remains on most of the sectors except energy and utilities which are in the positive zone. These two sector are on the upside now while others are on the downside, this show that damage has largely been done in these markets but as investors I think we need to think and strategize whether the market is currently in a good stage for a buying opportunity both for swing trades and for long-term.

Amazon (AMZN) For Long Term Position. Continue To Accumulate If Decline Seen Again

Amazon was down by 4.29% overall on last Friday, and this is not the best day, Amazon has given back the daily uptrend they had, and a retest of the lows and now testing the support down to 183.60 and 191.

We have lost the daily uptrend and if we looked at the weekly bounce of 25%, but I do not think it is good enough as the weekly bears are in control and the bulls gave back their weekly uptrends.

So what we could aim for is the lower high into lower low as we are also seeing AMZN off its highs by 21%, what we can do is to look for confluence but we need to see daily oversold conditions from the RSI, hence, if we do see another weekly downside, then we could see Amazon go down to 150 to 175.

I have my long term position at 175 which I know that this is the whole range from 2020 and 2021 and I got it during the August 2024 selloff.

Currently Amazon is at a very attractive valuation right now at 1.5 , but we do not know if it will come down further next week, so I will be planning to get more Amazon shares for my long term portfolios.

If Amazon really for some reason went down by 28-35% due to sell-off, but if we looked at Amazon history it did fell by more than 30% from its highs before, so this might be a buying opportunities.

If Amazon retest 2021 prices, we will need to look at Amazon fundamentals whether it is worse than 2021, as we can see that the EPS in 2022 was 2X, and revenue in 2021 was 470 billion.

Amazon revenue this year alone was 700 billion which is over 50% increase so we are actually buying the stock at the same price but with better revenue.

Summary

Considering that there are some opportunities in the market now, where stocks are at good discount, we as investors should continue to exercise caution and plan our strategy to align with our time horizon.

There are some other opportunities which I would be assessing, will share more on how I might take a trade for long term, do stay tuned.

Appreciate if you could share your thoughts in the comment section whether you think it is better to position ourselves to look out for stock with strong fundamentals for the long term trade.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.