US stock market is going through another of those bouts where, nothing is working except those short the market....
Every sector which I monitor is down anywhere from highs about 3.96% to 17.00%....
Individual stocks are taking IT on the chin and they are on the race to new 52 week lows, some major stocks have already made It to new 52 week low list.....
Only in end of July about 8 weeks ago most sectors were making new 52 weeks high.....
SO
What changed in last 8 weeks....
Biggest change IS INTEREST RATE have skyrocketed to 16 years high....look @ 2 year & 10 year rates not a source of confidence
Interest rates alone is causing havoc in corporate financing & Individual financing a bad mix of financial pressure....
Banks are also impacted by high high Interest rates as few were ready for 5% +++
Interest rate alone is causing PE compression for all stocks......
Even high flying energy stocks is down 3.96% from high IF we take XLE close.
SOX as a sector is worst hit with 17.00% lower from high
RUSSELL 2000 is 2nd worst with a slump of 11.11% from high...
SO
There is NO PLACE TO HIDE...
BUT.....one has to look @ RISK / REWARD ratio....
Those who are afraid of these swings may take It as a warning sign of more downside....
BUT OPTIMISTIC trader like me may take a different view, time to get overexposed in discounted stocks
In my opinion, based on history, we may be close to major support in markets & individual stocks...
RISK / REWARD IS VERY COMPELLING....
Wall street offers no guarantees BUT being patient and staying with conviction, pays off in the long run.
Good luck with your own analysis and comfort level.
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hi Stocktrader,
Last week Down 17.02%
YTD UP 87.33
Saleem
Hi Saleem,
Last week: -6.63% (YTD: +72.47%)
Portfolio Leaders: PINS
Portfolio Laggards: everything else
In a truly terrible week for all things market, the portfolio was very weak as many stocks droppped all five days. Higher interest rates were the main culprit as the Fed remained on inflation-watch and both stocks and bonds re-rated. I am somewhat optimistic from here that price action and sentiment and rates have reached near-max pain, so the risk/reward is favorable in my opinion. I can not wait for some actual earnings results to start coming out so we can focus on some fundamentals for a change :)
Holdings: PINS AGCO NVDA PLAY LYFT TOST BMEA HIMS TYGO IONQ ZENV(0.25x), cash 0%
Stocktrader
Hi Saleem,
Sold PINS @ 26.00 on catalyst passed and mixed outlook from here
Bought U @ 31.03 on improved profitability outlook after latest price increases
Added to TYGO @ 6.40
Added to IONQ @ 13.33
Stocktrader
Hi Stocktrader,
Good luck with U & more TYGO & IONQ
Saleem
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