The End of an Era, Q1 2021

We’ve lost an era. It’s over, the end. It was the first mini-era of speculation I’ve ever experienced. We had 1980s sitcom characters come alive on twitter and bitcoin hit 50k from 5k! In the most wizard of oz type narrative in my lifetime, we had an entire generation of first time traders get baptized in the waters of easy riches and easy losses in less than 12 months. I’m mesmerized by this era, I’ll hold it dear like my first time profitability trading in 2013. The golden era of volatility as I dub, the COVID Season.

Peak to trough Q1, 2020-Q1, 2021 was one hell of a roller coaster ride. What we know for sure now is market moves will forever be faster. The ups will come viciously slow and the downs tarnishing all hope. I bid this era of increased volatility, volume and market chatter adeu. I suspect our newest transition will be focused on the slow and steady upward momentum of the newest leaders being crowned for the next era.

When volatility falls, stocks rise. Falling volatility has chewed up many new traders accounts as they chase quick gains experienced in the early spring and summer of 2020. Grinding out the year we’ve seen a transition away from the styles and sectors before the US printing presses were left on the BRRRR setting.

What I see beyond Q1, 2021 is a shift to value, small cap and especially the real-world product companies. Honestly, if you look at 2 charts, how can you pick anything other than the old school companies?

Here is the Nasdaq:

Here is the DIJA:
Which index would you rather own? It’s simple for me, buy the $DIJA, buy the old companies.

Now, to make it even easier, I do a relative strength comparison between the $DIJA and the $COMPQ – It’s no contest right now, you want to buy the $DIJA.

Now that I know this information, I can focus on what is happening in the market and where I put my money to work for the time being.