The Weekend Routine 9-25-2022
Lookout Below
The Market:
The Nasdaq fell out of bed this week tanking over 5%. This week we had the highly anticipated FOMC meeting that didn’t disappoint when it comes to providing fireworks. While the Fed raised rates .75% basis points as expected, Jerome Powell’s press conference after is what really made markets move. Upon the release markets sold off, only to begin rallying going from a 1% loss to almost a 1.65% gain, but Powell made sure to leave off stating that interest rates needed to remain higher for longer and he is determined to kill inflation. This sent the market nose diving another 3.4% ultimately closing near the lows of the day down 1.79%.
Lately we have seen the dynamic of leading stocks holding up well and even rallying while the general market indexes have gone down to sideways, this changed this week as many of the holdouts pierced below their 50 day and 10 week moving averages on above average volume. The institutions have gone into a risk off mode.
We are seeing the market reach oversold levels as shown by the McClellan Oscillator. It is now lower than the June lows and back to levels seen at the Covid and 2018 bottoms. I’m in no way saying this means we are going to rally from here, but the possibility for a vicious snapback rally does seem likely. It will be important to reign in your FOMO when this does happen as many stocks will make some very large gains. Remember when the market does finally bottom, there will be plenty of opportunities to get into the next group of leading stocks.
Secondary Indicators:
Put Call Ratio: Neutral reading, almost bullish at 1.19
Percent of Stocks above the 50 day: Nasdaq - 9% S&P - 4%
Percent of Stock above the 200 day: Nasdaq - 17% S&P - 13%
Looking Ahead to Next Week:
The economic data doesn’t stop next week as we will get some more pivotal inflation readings on Friday with PCE data. We also get GDP data Thursday and have a heavy dose of Fed speakers. More volatility is to be expected.
Before we dive into my current portfolio and actionable ideas, make sure you are subscribed so that you don’t miss any future updates!
Current Portfolio:
(Avg. Price, 1st Purchase Date, Stop Loss)
ENPH 0.00%↑ ($261.49, 7/27/22, Breakeven)
ENPH is the lone stock left standing in the portfolio. While, I’m not a fan of the action, it closed right near the 10 week line on just about average volume. Not triggering a sell rule.
Actions taken:
Bought:
Sold: CELH 0.00%↑ – Close below 10 week, SWAV 0.00%↑ – stop hit, WOLF 0.00%↑ – stop hit, ESTC 0.00%↑ – stop hit
Potential Leaders:
CELH, DV, ENPH, LPLA, PCTY, SWAV, TSLA, TTD, WOLF, WSC
Additions: TTD
Removed: CMG, DVN, EQT, ESTC, GFS, LNG, LNTH, ON, OXY, PI, PRVA
https://www.tradingview.com/watchlists/84325802/
Actionable Ideas:
Stocks listed in the actionable buys are stocks with strong fundamentals and showing good technical action that can offer a low-risk entry. Not every entry will trigger, but also just because a stock is listed here does trigger does not mean I will take the trade. Portfolio exposure, market health and other factors will also be considered.
This is not an environment where I am looking to increase long exposure. After reviewing charts this there has been significant damage and this will take weeks to months for new proper bases to form. As always I will be looking for new opportunities, but don’t plan on adding new trades next week. This could change at any moment, but for now ENPH 0.00%↑ will be my lone wolf.
This is a perfect time to study and prepare for when the market does finally bottom. Here are some articles you can study this week.
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The content presented is for informational and educational purposes only. Nothing contained in this newsletter should be construed as financial advice or a recommendation to buy or sell any security.