Powell's dovish remarks, US stocks continue to surge, which sectors should we focus on?
I already warned about the risks of CRCL yesterday, and it dropped right at the open. At first, I thought the decline might stall and tried to buy the dip, but when the rebound showed no strength, I quickly exited. So, once the market trend confirms a downward move, you must act decisively because there’s time during the night and pre-market sessions to exit. That’s why when I warn about risks, I hope everyone takes it seriously.
The logic is simple: this kind of company only rises when the broader market might pull back. Once the market stops pulling back, it could lose momentum. Moreover, it has surged too much in the short term—up over sixfold in half a month—and even Cathie Wood’s fund has reduced its position. So, I think caution is warranted.
Recently, the main upward trend in the market has been in chips, which I’ve written about many times in my articles—basically mentioning it for two months. Those who were supposed to profit have already feasted, and many friends in the community had positioned themselves, so the returns have been quite good.
Lately, I’ve been focusing on consumer-sector companies that are just rebounding from the bottom, so I’ll enter early to position myself.
I also mentioned that APP recently—using this technical indicator to identify the bottom. I bought some last Friday and wrote about it in the community. It rose consecutively on Monday and Tuesday, so I’ll continue tracking companies that have finished consolidating and are poised to rise. Otherwise, I think semiconductors in their main upward trend can still be held.
The most critical timing now is next month’s CPI data because Powell’s tone in Congress yesterday was relatively dovish.
The Fed’s main concern is how tariffs might impact CPI. Powell’s team estimates the effects will start in June and July, but if there was little impact in May, the U.S. Labor Department might revise the data later.
Given this situation, I think those already invested shouldn’t exit lightly. If you’re afraid of chasing highs and getting trapped, consider the consumer-sector stocks I mentioned—they’re relatively stable.
The U.S. stock market is diverse; just because some sectors are rising doesn’t mean others lack opportunities.
Financial payment stocks also surged collectively yesterday. UPST, which I mentioned before, rose significantly and may enter its main upward trend soon. The entire financial payments sector should perform well under Powell’s dovish stance.
This includes the 3x leveraged bank ETF DPST and the 3x leveraged real estate ETF NAIL, both benefiting from rate-cut expectations. Of course, if major risks emerge, I’ll alert the community promptly.
2025 is destined to be a volatile year, requiring full digestion of the gains from the past two years. Thus, personal discipline is even more critical, so everyone should plan their position management carefully. Those who value strict discipline might consider joining our community.
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