As I write about my favorite pick for 2023, I am still quite bearish on the short term outlook; I expect stocks to find a bottom between 2,800 to 3,200 in the first half of 2023, suggests Steve Reitmeister, editor of Reitmeister Total Return.

But then things become glorious for the bulls. Because from that darkest hour stocks will rise with gusto. We are truly talking about the "phoenix rising from the ashes" which is how all new bull markets begin. In fact, going all the way back to 1900, the average first year gain for new bull markets is +46.2%.

Now consider that small caps generally rise 20% more than large caps in the S&P 500 (SPY). Further, consider that using 3X leverage in this small cap ETF could easily lead to first year returns north of 100%.

Now you understand why I am pounding the table on buying this 3X ETF focused on small cap stocks for 2023. I am referring to Direxion Small Cap Bull 3X ETF (TNA).

This sounds great except for one thing..WHEN do you buy it? If you buy too early, and the market is still racing lower, you will have tremendous losses on your hands. So I caution against just blindly buying it without some consideration for determining market bottom.

So this is an evolving story that needs vigilant watch on all the key indicators like employment, earnings, inflation, Fed rates and price action. That is the only way to determine when it may be time to enact this TNA trade.

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