- Coiled Spring Capital Macro Report
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- Coiled Spring Capital Macro Report Jan 29th, 2023
Our out of consensus call to get long the stock market and growth stocks in late December, continues to pay dividends. The Nasdaq was up +4.3% last week to take the year to +11%. This compares to the SPX at +6% and the Dow at +2.51%. This incredible outperformance by most standards. 1 week performance
YTD performance
Quite sure we were one of the few out their making the call to get long growth. Even as early as last week the masses were calling for earnings to disappoint and send the stock market back to new lows.
Here is an excerpt of our newsletter from last week discussing this very obvious and stale claim.
It's been an incredible move so far to start the year and the "January Barometer" is almost certainly going to close positive. Readers of our newsletter know that we have been discussing these calendar effects since late Dec, and we are 2 days away from completing the trifecta (Santa Claus Rally, the first 5 days, and the Jan barometer). According to the Annual Stock Traders Almanac, since 1950, whenever the SPX has completed the Trifecta coming off a down year, the stock market has never been down. And it's up +27% on average. "Maybe it's different this time?" Sure, maybe it is, but those are famous last words in Wall Streel parlance.
Recall, we are also in the most bullish Q of the most bullish year for the 4-yr Presidential cycle, something we've been discussing since Oct. Here are the numbers since 1933:
Take this all together and the stubbornly biased bearish camp has to overcome quite a bit of history to get their desired result. We on the other hand will remain agnostic and attempt to position (long or short) around the major inflections.
We have been more bullish on single stock allocations to play the resurgence in the indexes, and have presented multiple ideas (publicly and privately) over the course of the last 5 weeks to capitalize on the recent rally. 26 ideas in total were presented and all 26 of them have made money.
Review the report here: Coiled Spring Capital Mid-week update (Single Stock considerations) | Coiled Spring Capital Macro Report (beehiiv.com)
Next week we will get the FOMC as well as ISM and payrolls. We also have quite a heavy earnings week. Will this be the week where bears get a chance at some redemption?
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