The S&P500 is Trending Down - for the Week ending 03/11/2022
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The S&P500 is Trending Down - for the Week ending 03/11/2022
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The Market Algo Newsletter
For the week beginning 03/04/2022
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Our proprietary market algo forecasts the following trends (Risk-on or Risk-off) for the week ending 03/11/2022:
Risk-on (Bullish): No metrics indicate a Risk-on trend – The next wek appears to beshowing a full Bear market through 03/11/2022.
Risk-off (Bearish):
All metrics are Risk-off (Bearish): WTI, Copper, VIX-SPY Variance-Correlation, QQQ, VIX and VVIX.
Conclusion:
The Bear remains in control, with the week over week trending of the SPY being in s downward trend. Nimble traders might be able to profit from short term scalping trades. Not for the faint of heart!
I am tracking the weekly price movement of QQQ during 2022:
So, Moving forward, QQQ was a hypothetical “Buy” on 01/03/2020 at 401.68. IMHO this correction of QQQ remains in an indefinite period profound weakness! No sign of a definitive bottom from this point moving forward!
Each week, I indicate the profit or loss, based on this (pretend) entry point. Let’s see where it ends up at the end of 2022!
As of 03/04/2022, this hypothetical trade shows a loss of $64.38
(QQQ was $337.30 at the close on 03/04/2022).
Reminder: Daniel Riley –Mr. TopStep:
https://mrtopstep.com
provides daily updates on the markets: His website & free email newsletter are a MUST!!! —Patrick
…***…
Market Notes and Commentary:
Howard Lindzon’s Monday Momentum email newsletter- dated 0228/2022 as always-is a most compelling read:
Excerpts follow:
Good Monday morning everyone.
Monday’s mean ‘Momentum Monday’ and while it has not been fun to be ‘Howie’ in a market that hates growth since December , the show must go on. Also, being Howie is relative and my heart goes out to the people of Ukraine suffering while I surf the internet. I am a fortunate man.
This week’s tour of the markets like always is sponsored by my friends at Marketsmith. You can watch/listen to the show right here on Youtube. I have embedded it below here on the blog:
As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.
For me, the cash sidelines for 30-60 percent of my stock exposure feels about right (I will aggressively swing trade once in a while). I am happier to pay up for ‘growth’ stocks when software/technology companies start trending again.
Any extra market time the last month has goner into watching the stocks on the Stocktwits momentum 25 lists. They have been bursting with energy, metals and financial stocks for months.
Ivanhoff and the rest of the swing traders moved to these as did investors and traders that follow price momentum.
JC has a great chart that sums up the strength right now in energy over tech:
In other relative stock performance ‘important ‘news’…the equal weighted S&P Index is outperforming good ol’ FAANG stocks:
Here are Ivanhoff’s thoughts:
The main indexes tested and even went below their January lows, only to stage a major bounce towards the end of the week. Given the sentiment and economic backdrop, it’s probably just an oversold bounce within a bear market. And yet, it’s anyone’s guess is how long it’ll last. The S&P 500 testing its declining 20-day moving average or even 450 is not out of a question.
Metals stocks have been notably the strongest sector, probably due to war-related sanctions. XME is at 10-year highs. Steel, aluminum, copper stocks are busting loose.
Oil stocks are also holding well and are setting up for potential breakouts – GUSH, ERX, AR, DVN, TRGP, FANG, MUR, SU, etc.
It’s good to see stocks outside of the commodity space starting to break out and set up – SEAS, LNPH, DOCS, etc.
It’s still a headline-driven choppy market that is capable of gapping up or down 2% on any given day. This environment requires one to be nimble, open-minded, and willing to trade both sides of the market.
Last but not least, Charlie has an excellent 7 chart Sunday with some Russia charts that put into perspective the immediate financial mess.
Have a great week.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.
Sunday Reads and Listens – Could Things Break?
Happy Sunday.
It was a historical week as Russia invaded Ukraine. The tech public markets have been wrecked also tried to find a bottom.
General Stanley McChrystal gave an interview on Ukraine risk that I thought was worth sharing. Thanks Pete for sharing.
As for stocks, the tech bear market is likely a return to fundamentals.
I like this thread on what has happened in the markets from John Street Capital.
This Ben Thompson strategy piece on Shopify is great.
I listened to this podcast on sleep yesterday and managed not to fall off my bike.
The seed and fertilizer stocks are the strongest stocks in the market right now. Here is the ‘Visual Capitalists’ guide to agtech and food innovation.
My friend Josh Brown turned 45 this week. He had a great post on the day. This paragraph which included me and this quote from Sandra Day O’Connor was great:
Linette told me yesterday she thinks our mutual friend Howard Lindzon is aging in reverse. Yup. His kids are grown up and he was an angel investor in Robinhood. It all worked out. If and when I get there, I’ll feel younger too. Supreme Court Justice Sandra Day O’Connor knew how to avoid getting pinned down in an abortion debate. When a reporter asked her “When does life begin?” she replied “When the kids are out of college and the dog dies.”
I am off for a long ride. Have a great Sunday.
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======== ******** ========
Dave Banister, Chief Analyst at The Market Analyst
(email: Dave@themarketanalysts.com)
has some interesting information he shared in his Jan 09, 2021, Sunday Market Commentary:
[Full Disclosure: I subscribe to his Stock Reversals Premium newsletter - check out the SRP newsletter – to include a link to all of his awesome newsletters at:
https://srpmembers.com
]
Dave’s Market Notes and Commentary:
He shares LOTS of actionable recommendations in his SRP newsletter:
Market Notes and Commentary - 02/27/2022:
He has some stellar results of past trades—posted on his website!
His Stock Reversal /Alerts Premium Newsletter is my favorite!
Last week’s notes repeated here:
“we should see a test of the A wave lows ahead, maybe worse. Good time to be patient with stock trading in terms of going long on new positions for sure. 3x ETF and Futures can trade bearish positions but again we could be getting close to an ABC Bottom. 4220 area is key for SP 500 ahead”
Obviously we pierced below 4220 to the low 4100 zone after the bomb dropped in Ukraine on Thursday. However, an old saying on Wall Street is buy when the bombs drop and sell when the trumpets blow. We saw huge buyers and short covering following the overnight lows Thursday morning, perhaps sellers are finally exhausted. However, the geopolitical risks will keep us on our toes and frankly force us to watch the conflict/war developments closely.
Continuing to go slow this past week at SRP which is a stock only swing trade service and long only. I do not try to short stocks in a subscription service because often a lot of the members would be unable to establish actual positions on a short. With that said, this weeks updated swing trade ideas list shows again a ton of strength in Metals, Oil, Natty Gas, Financials, Defensive stocks etc. We will be looking to get active here and as long as we do not get boots on the ground from other countries in the region I think the price lows could be in for this bear cycle.
Lets keep in mind this Bear Market actually began last February when Microcaps and Biotech peaked out and it was only the last few months when the “Generals” also began to fall (SP 500, Tech, Dow etc). Fear and Greed CNN index got as low as 25 from 39 starting last week so that helped with a short term bottom for now.
Of interest, AMD announced an 8 Billion dollar buyback on Thursday which helped the tech sector. Also CARG (Car Gurus, a Tippingpointstocks.com position, rallied over 45% on Friday alone as their quarterly report proved up my theory that they are disrupting a 100 plus year old Automotive business via their E commerce strategies. There is hope…
We took a small SOXL Bull 3x ETF position in my 3x etf service on stocktwits Friday with a rare “Intra-day” stop in place in case markets go back south. (Semiconductors).
I also subscribe to The Cestrian Stock Bulletin – free:
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They have a paid plan on Substack- only $9 per month:
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They have samples of their newsletter posts on Substack, along with links to other newsletters they offer:
I plan to subscribe to their newsletter, with funds from my paid subscribers here at The Market Algo NL.
Disclosure: Cestrian Capital Research, Inc staff personal accounts hold long positions in, inter alia, TQQQ, NFLX, T, LHX, NET, DOCU.
You’re a free subscriber to Cestrian Tech Select. For the full experience, become a paid subscriber.
***--------***
Swing-Trading:
I am illustrating P/L (Profit/Loss) results of Ed Barsano’s also in a paper-trading acct
Check out my P&L at this link – using Ed Barsano’s free Algo- no software to download: Just set up an account at TDAmeritrade- I Love the algo!
Here is the link:
https://gobabytrade.com/gobabytrade_b0c29d35_0
Email Ed Barsano if you have any questions:
As of market close on 03/04/2022 - All data is USD!
Initial equity in the paper account: USD 7000.00
Stock Price Shares Total Profit/Loss (pending & completed trades‘ results)
RUN 25.60 62 -904.64
NVDA 229.52 9 -5.30
PAAS 26.56 29 +478.42
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Mahendra Prophecy:
Important alert: Predictions and your actions in markets and commodities from here onward after Russia invade Ukraine...
Thursday, 24 February 2022
Dear Members,
Finally Russia Invaded Ukraine on Scorpio Moon, Wednesday and Thursday were crucial as mentioned in the letter. Yesterday when I was writing flashnews for Thursday, an invasion started but I was nervous because of Scorpio Moon but I am not that much worried about overall situations as it is matter between Ukraine and Russia, so financial markets will rebound big soon.
It is Wednesday night 2.30 AM in Santa Barbara and I just got up to write this alert, Though I hate to predict about war and killing, just I wanted to let you know what will happen next from here onward in financial markets, commodity markets and currencies.
This is what we stated on Wednesday when I sent out today's flashnews:
Scorpio Moon playing huge rules and supporting volatility…
Dear Members,
On Wednesday USA and European markets opened higher but then started losing value and closed sharply lower. S&P and NASDAQ just closed at low of 2022 and so now it will be interesting to see whether both these indexes hold our predicted lows or they close below predicted lows for the next three to five days. We also remember that another 10 to 12 days of uncertain trend is pending but surely markets have either bottomed out today or close to bottoming out soon, another one to three percent down side is pending which is irrelevant if you look at medium to longer term trend.
Always I stated that Scorpio Moon misguide investors most of the time, it represents the false picture about financial market so basically it guide you in the wrong directions and investors failed to take right decisions during the Scorpio Moon day, and that is why I always stated
“I hate to guide you and hate to write letter on Scorpio Moon”, I always recommended to stay sideline during the Scorpio Moon day and finishing pending work, because it can punish bear and bull both, like Wednesday bull got punish and today "Thursday" bear may get punish.
This above part is taken today's daily flashnews letter but it is important what is next now for financial market and world at large, where this crisis will escalate and turn into third world war or everything will be settle down so here is our view:
1. Russia invades Ukraine on Scorpio Moon day, which confirms that this crisis will continue for the next 27 days. The Invasion started on Scorpio Moon which means there will be more casualties and people can die then I expected, because I expected smooth invasions without any bloodshed.
2. Ukraine was invaded on Scorpio Moon which means that the current regime may lose power or political changes will take place as predicted this week and last week. Small break-up will take place in Ukraine.
3. Western world won't be able to do much except sanctions but if they send military forces along with NATO, then I recommend getting out of the market as it can turn into the worst war situations which still I don't see this happening at all. ON Friday morning in Asia Scorpio Moon will end which may give signs of hope and relief.
4. Overall we predict this crisis will be over in 27 days so some kind of agreement will take place.
5. As mentioned in this year book that from end of April world will become normal place, or crises like Covid-19 and all uncertainty will get over, so happy period is starting for investors from April and we may see one side rally global markets.
For financial markets:
1. Metals are a positive trend and gold achieved our higher side target of this week $1969 as mentioned in the weekly newsletter. Silver also achieved our higher side targets. Currently oil is trading at $1972 and silver $25.55 levels, these are great profit booking level in gold and silver, close positions. Overview is extremely bullish in precious metals in 2022 as mentioned in this year's book from April, specially Silver from end of April 2022 so keep this in mind.
2. In this week's letter we mentioned that Base metals may move higher until Thursday and we recommended closing long on either Thursday or Friday. Close long in most of the base metals by tomorrow or even today. We also recommended selling palladium on Friday so take sell positions.
3. Oil prices moved higher on Scorpio Moon on Russia news, right now oil is trading around $100 and it is a great sell as the astro cycle is showing its worst bear market for oil in 2022 and specially from April onward. Oil may lose 38% or more value from April. Thursday and Friday one can take short in oil or buy put options of May and June. Even short term traders can buy some put options in oil. We still don't see oil remaining above $92.78 level, or 96.78 for more than five days in 2022 so keep this prediction in mind. Natural Gas can move higher as it is our one of the favorite trade of 2022.
4. The Global market will be very volatile for the next 18 hours but the lower side of Thursday is a great buying opportunity in markets so start buying right now but I will recommend doing it carefully because it is Scorpio Moon day so make any bet carefully but do it for sure. Scorpio Moon will end on Friday morning in Asia so it is a great time to add more bet on Friday as a rebound will take place again, We are recommending getting in aggressive buy on Monday of next week but play with call options as the next ten to 12 days are volatile as mentioned in the letter.
5. Grains are moving sharply higher, though our view is positive for the 2022 but current are suggesting that top have been achieved today specially in Soy products. One can sell or short Soy around $1725. Close long in corn and wheat but don’t short.
6. Cash in from commodities including grains, base metals and oil, oil is in our short list, put this money in stocks on Thursday, Friday and Monday, these kinds of buying opportunities in stocks and Indexes you won’t get again.
Important note: As I always mentioned that I hate to predict Scorpio Moon day but because of huge demand from members so I am sending this alert. I will put out a new alert on Friday, as my accuracy level on Scorpio moon is not that great
. I will be buying stocks and selling commodities for the next three days continuously. What a buy in S&P at 4111, NASDAQ 13045. We may go all in with all our traders during the next week starting from today.
Next week weekly newsletter will be one of the most important letter which I may start writing once Scorpio Moon end tomorrow because many great investment trades are available like in March 2020 and March 2009.
Thanks & God Bless
Mahendra Sharma
2.30 AM Wednesday
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