Thus far during March, I haven't been shy about expressing my bullish feelings about how this final month of Q1 will play out. March will more than likely go out with a bang, not a whimper. What this means, specifically, is that the current pullback we have experienced is a buying opportunity within the greater bull trend.
This bullish opinion does come with a caveat, however. The purity of the uptrend since the December lows has been compromised at this point. In other words, the remainder of the month, while being generally bullish, will be a choppy affair. The bulk of the gains has the potential to occur in a very short time-frame, more than likely during the last week of the month, as fund managers rush in to "dress" their under-invested portfolios, giving the appearance of not being completely behind the curve of one of the greatest starts to a calendar year on record.
Believing that the markets will be more chop than substance for the next week or two, the most prudent path would be to cut down on trading new positions and focus on trading around core positions. The potential for getting shaken out of new trading positions, racking up a series of small losses, is simply too great given the current texture of the market.
The "bang" for March, when it does occur (most likely at month end), has the potential to lift the S&P 500 over 2850. It won't be an inconsequential affair so it's worth staying fully invested in anticipation of. Investors simply have to be willing to cope with what will be, very simply, a frustrating trading environment as we get into the middle of the month.
We are down to a three position portfolio currently with COOP, Z and RDFN. That's likely how it will remain for a majority of the month.
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