US stock market is facing many technical challenges.
We are seeing high volume selling as yields spike up.
Fed is all set to raise Fed funds rate by 75 basis again which will hit consumers hard
Consumers are getting killed with highest inflation in many decades
Fed does not see that with next hike on Wednesday, mortgage rates will go to highest level in decade
Fed is very concerned about not losing control than dealing gradually step by step and waiting for normal reset, they are into forced and painful reset in a hurry...which may backfire big time.....
Technicians are having field day with Fed / yield driven selling and have sharpened their technical skill and predicting 2200 in S&P 500......
YES...anything is possible BUT It Is not going to happen in a straight line as herd behavior may lead everyone to expect disaster in next 48 hours...
Current negativity is a great test of conviction, patience & strategy.
I suggest first, to stay put....
Second, make minor / major changes in your portfolio mix
Third, do dollar cost averaging, a winning formula in a bear market.
Technical reading of current market is as follows based on RSI:
DOW 35.69
S&P 500 37.72
Nasdaq 37.91
SOX 38.19
Russell 2000 39.94
XLE 47.65
TAN 50.38
Based on the above, there is a need to have exposure in 2 relative strength story of Energy & Solar stocks.
Solar has seen strong uptrend with many stocks breaking out to series of new 52 week highs.
YES ...It has been tough 18 months for many portfolio, technology in particular after rising to neverland has fallen deep into a hole.....a favorite of many and overweight for most...which must be rectified to no more than market weight preferably underweight.
Good luck with your own take of technical condition and your comfort level, It may get painful before it turns.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hi Saleem,
Last week: -3.75% (YTD: -11.93%)
Notable Leaders: SYM ENVX
Notable Laggards: ZENV BMEA SNAP UPWK LYFT
As treasury yields spiked and some earnings warnings hit, the market collapsed ahead of the Fed meeting this week. I didn't make any moves, unusual for me to not make *any* adjustments, but I feel like the weakening inflation metrics will eventually set the stage for a good growth stock market again. I am unsure when this happens, so it's a matter of biding time while the market finds its footing, and rotating as needed into what I perceive to be good relative values if the market dislocates briefly. It is easy at this juncture to grumble about what has transpired, a Fed too slow and late to react initially only to go so aggressively and hard-headed now. Ultimately though, the Fed is a temporary factor as global market forces eventually take over, and I think disinflationary forces primarily remain despite possibly some situations like energy that will take a while to iron out.
Holdings: SYM ENVX PLAY GTLB IONQ LYFT FLL SNAP UPWK BMEA ZENV, cash 0%
Stocktrader
Hi Stocktrader,
Last week Down 3.43%
YTD Down 7.71%
Saleem
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