Where are the Opportunities in a Market Sell-off?

(4/25/22) Markets broke support of the consolidation range on Friday, leading to a sharp sell-off. Lower market futures this morning would indicate a re-test of March lows. While frustrating, markets remain over-sold, and we're looking for some kind of impetus for a counter-trend reflexive rally. Overall sentiment is very negative, and positioning by professional traders is also quite light, suggesting overall market psychology is very negative as well. Contrarians would believe we've got a nice set up for a reflexive rally, but such activity may not get very far as we move into May and the Fed next meeting--likely to produce another rate hike. Any dovish language at the meeting--like a "peak of inflation," would tend to help fuel a bit of a rally. We're reticent about selling right now, and looking for a bounce that could be quite vicious. And if you're not happy with your positioning, not liking this market, look for a rally opportunity to rebalance your risk. Caveat: Don't expect any rally at this point to take us back up to all-time highs. There are too many headwinds, earnings have been just okay--not really great--and the companies that are missing being severely punished.
Hosted by RIA Advisors' Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton
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