How’s your bracket doing? That’s the popular question following the biggest couch-potato week of the year for many, as the NCAA Men’s and Women’s basketball tournaments got underway. As for the markets, I’ll put it this way: It is currently flat out…well, flat. I have been watching for signs that the stock market leaders are leveling off, and it continues to look like they are, notes Robert Isbitts, founder of

The key questions I see in the equity market for the second quarter are these:

  1. If the leaders (FAANG, etc.) falter, will there be a group of undervalued, high-quality stocks that will fill that gap, a la the year 2000, when the S&P 500 appeared to barely blink for the first phase of the Nasdaq meltdown?
  2. Will non-US stocks finally catch a bid for more than a moment?
  3. Or will it be business as usual, with the Invesco QQQ Trust (QQQ) and S&P 500 ETF Trust (SPY) being buyable in droves on every dang dip?

I am an equal-opportunity profiteer and risk-manager, so it doesn’t matter to me. But I’ll admit to feeling some optimism that the first one above could occur, as well as the second.

And the driver? Probably interest rates and inflation. That is, they are threatening to break out to the upside again, and that would really surprise a lot of folks. This is especially the case for those ignorant enough to have assumed last year that the iShares 20+ Year Treasury Bond ETF (TLT) was some sort of “buy and hold” portfolio because inflation was licked. I’m not so sure about that.


Here’s the S&P 500, and to show just how “orderly” this upward march has been, I had to pull up a chart of 1-hour prices just to show clearly how tight a range this has been in. A tight range horizontally usually means something wild is about to happen (more wild than that double OT game in the NCAA tourney late Sunday).

But a tight range that keeps moving up and to the right like that is a powerful pattern. It is harder to break, but when it does, look out below. Thus, the intriguing market we find ourselves in as Q1 finishes up.

Bottom line? The “ROAR Score” stays at 40 this week, sitting at that still-defensive-leaning mark for the third week in a row. That means my two-ETF portfolio remains at 40% SPY, 60% SPDR Bloomberg 1-3 Month T-Bill ETF (BIL).

Recommended Action: Buy SPY, BIL.

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