The S&P500 remains Trending Down for the Week ending 01/24/2022
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The Market Algo Newsletter
for the week ending 01/24/2022
The S&P500 remains Trending Down for the Week ending 01/24/2022
We now offer free or paid subscription plans, as of Jan 10,2022
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Our proprietary market algo forecasts the following trends (Risk-on or Risk-off) for the week ending 01/24/2022:
Risk-on:
Risk-on: WTI-Crude; amd also Copper
Risk-off:
SPY is trending down - Risk off for the week ahead!
VIX-SPY Variance-Correlation: Risk – off -Note that this metric is VERY much biased to the “conservative” focus!
QQQ - Risk-off
VIX and VVIX- both trending upward - Risk-off
Reminder: Daniel Riley --Mr TopStep:
https://mrtopstep.com
provides daily updates on the markets: His website & free email newsletter are a MUST!!! —Patrick
Conclusion:
The Bears are still in control. Omicron and rising interest rates continue to weigh on the market.
The Bulls remain on the run.
IMHO - I think the long-term Bull market remains intact, but things are very volatile at the present time – a bumpy ride ahead- at least for the upcoming week, and possibly into February and even March. A tough time to be a Bull!.
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 remains a temporary bit of weakness in price- possibly a good entry point.
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 01/18/2022 this hypothetical trade shows a loss of $31.13 (370.55 at the close on 01/18/2022).
…***…
Market Notes and Commentary:
Howard Lindzon’s Monday- Momentum email - dated 01/17/2022 as always-is a most compelling read:
Some excerpts
Happy ‘markets closed’ Monday as we pay respects to Martin Luther King Jr.
Last week Ivanhoff had COVID, but the young scrappy man beat it.
We cannot say the same things about growth stocks which continue to struggle from the financial cocktail aftermath of it.
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 $19.95. Click this link if you would like to try it out.
Here is this week’s episode of Momentum Monday. You can watch/listen right here or I have embedded it on my blog below:
Here a Ivanhoff’s quick thoughts:
The main theme remains fear of tapering and rising interest rates which is pressuring richly-valued stocks – software, Internet retail, biotech. Many are already down 30-50% in the past 2-3 months alone. Can they go down further? Absolutely. It’s normal for momentum stocks to give back 50% to 90% of their gains. Many never recover from such drawdowns. The likes of AMZN, AAPL, NVDA, TSLA, GOOGL that keep climbing higher for many years are the exception; not the rule.
In the meantime, anything commodity-related is showing relative strength. Many oil & gas stocks are up 20%+ in the past couple of weeks. The metals and miners ETF – XME, is hovering near all-time highs.
Outside of the basic material space, semiconductors, and carmakers have held the best. The biggest chip producer in the world, TSM broke out to new all-time highs lifting the entire semiconductor equipment space with it – AMAT, LRCX, ICHR, KLAC, ASML, etc.
The S&P 500 and the Nasdaq 100 are below their 50-day moving average while the small-cap Russell 2k is below its 200-day moving average and close to breaking down from a very long range. The choppiness level in the indexes has increased significantly. We are seeing bigger and more frequent gaps that often get faded and much wider daily ranges. It’s a challenging tape for swing trades but an excellent one for nimble, intraday ideas on both the long and short side.
Here is Charlie’s 7 Chart Sunday.
Here is this weeks Stocktwits Momentum 25 lists. The lists are filled with large and small energy names and banks. Like I have been saying X’s ($XLE $XLF) over Q’s.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.
Good Sunday morning…
I am off for a long ride right after I post this.
As we started 2022, Social Leverage has an office. It is really fun to be in our own space where Tom, Knut, Jono and I can spend some time together. Gary joined us this week from San Diego and it felt great to have a home base. After a few years of mostly Zoom’s, I already find us way more productive.
Onwards…
I have been catching up on all the crypto reports and I thought I would share a few of my favorite reads and listens.
First this long report from Messari on their crypto thesis for 2022.
Coinbases’s CEO Brian Armstrong was on Guy Raz’s ‘How I Built This’ and I learned a lot.
Here is a long reserarch report on Coinbase the company.
More on crypto…
Here is Albert Wenger on the subject of Web 3…he’s been a leading and early to crypto investor and thought leader.
Ben Thompson has a great essay on Opensea, Web 3 and Aggregation Theory.
For those not ready or into crypto, you might have missed some money making opportunities, but you also missed a mess of ‘rug pulls’/scams which were up to 37 percent of all scams. Indeed this is the wild west and I have little interest in being a true pioneer.
Everyone should read this Ryan Peterson interview on the subject of the supply chain issues around the world. Ryan is the founder of Flexport.
With respect to the stock markets….while interest rates shoot higher and beat up my favorite growth stocks, we might keep an eye on Russia for the Global Macro tip off to a larger market problem. I like CRaig’s markets newsletter.
Finally, since I have a SPAC ($SLAC), I wanted to share this 2021 SPAC Monitor.
Have a great Sunday.
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.
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Howard Lindzon
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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:
The most recent weekly report- dated 01/09/2022 is reproduced below:3
Market Notes and Commentary:
Rough waters of late. The NASDAQ 100 finally took it on the chin, and often during a market correction we can’t bottom until “The Generals fall”, an old Wall Street axiom. With the NASDAQ 100 ETF at a triple bottom pattern, near term reversal is important or we could correct further. Sentiment is dialed in at 52 on the CNN reading which is right in the middle of Fear and Greed so that is not of much help in calling a firm bottom just yet.
Banks, Brokerages, Oil and Gas are leading right now, some of which are in the weekly swing trade ideas list at bottom of this report.
This week several charts, I’m also including CRYTO assets Bitcoin and Ethereum and their long term charts are calling for a near term tradeable bottom here. Sentiment for Crypto is at an extreme fear reading of 10, the lowest since July 21 lows and lowest reading in over a year, typically the right time to buy. This should be the year that institutions get involved more aggressively. To wit, we just saw KKR lead a series C round in Anchorage Bank (Crypto/Digital) with a 3 Billion valuation in late December, a nod of institutional approval of this asset class.
3x ETF is flat going into this week as well as SRP and Futures services
He has some stellar results of past trades—posted on his website!
– I LOVE it!!!
I also subscribe to The Cestrian Stock Bulletin – free:
https://newsletter.cestriancapitalresearch.com/add_subscriber
They have a paid plan on Substack- only $9 per month:
https://www.getrevue.co/subscribers/eU5H4l7fdLGkqv7aEMpeoQ/upgrade
They have samples of their newsletter posts on Substack, along with links to other newsletters they offer:
***--------***
Swing-Trading:
I am illustrating P/L (Profit/Loss) results of Ed Barsano’s algo 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 01/18/2022 - All data is USD!
Initial equity in the paper account: $7000.00 USD
Stock Price Shares Total Profit/Loss (pending & completed trades ‘ results)
RUN 29.05 88 -777.64
NVDA 259.27 9 +87.26
PAAS 22.71 98 +37.24
**************
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