5/11/22 Daily Stock Market Retrospective


What went well?

-Top Performing Sectors: Energy (XLE): +1.34%; Utilities (XLU): +0.72%; Materials (XLB): 0.05%
-Sub-sectors: Gold (GLD): +0.82%; Aerospace and Defense (LMT, HII, NOC, LHX)
-Individual Standouts: EA: +7.9%; DKE: +7.83%; BKR: +5.4%; PM: +4.7%
-On a day where the market (SPX was down 1.65%) ; energy continues to perform. We also saw performance from the utilities sector pointing to a defensive day. At this current moment, it is very hard to find things going well besides energy. The question is how much longer can energy keep this out-performance up?

What Didn’t go well?

-Worse Performing Sectors: Consumer Discretionary (XLY): -3.5%; Technology (XLK): -3.16%; Communication Services (XLC): -1.8%
-Sub-sectors: Semiconductors (SMH): -3.07%; Airlines (JETS): -2.39%; Transports (IYT): -1.39; Homebuilders (XHB): -3.58%; Agriculture (MOO): -0.56%; Gold Miners (GDX): -0.13%
-Another brutal day for consumer disc., tech, and communication services. These three sectors are now down YTD (XLY: -26%, XLK: -23%, and XLC: -26%) Additionally we continue to see weakness in the semiconductor space, transports, and homebuilder areas. That doesn’t signal economic strength right now, so something to watch. Things haven’t been go well, so the question is are we close to interim low and due for a relief rally? or does the selling persist?

Any catalyst/news:
-5/12 — PPI Report

5/12 Potential Actions:
- Continue to sit in cash (wait for earnings season & guidance)
- Hedge — (Bears will look for continuation and test 3900. From there, the Bears will likely go on defense and have to defend a retrace attempts by the bulls)
- Go Risk-On
— (caution! — to truly go risk on the market has to get above 4300 at minimum and hold!. In the mean time, most pops are retracements in the on-going downtrend. as i stated in the last retro, we are in “Sell the rallies” mode

5/11 Potential Actions (RESULTS):
- Continue to sit in cash (wait for earnings season & guidance)
- Hedge — (**CPI DAY — IF CPI is worse than expected, bears will look to take advantage and push the market back below 4000 and get a close of 3975, 3950, or 3910!) — Positive — (CPI came in hotter than expectations *8.3 vs 8.1; market opened at 3990 and manage to push to 4050 before rejection. From there the bears were able to push below 4000, 3975, and 3950 with a close of 3535. (*note just 25 points shy of my 3910 target)
- Go Risk-On
— (caution! — If CPI in-line or better than expected, bulls will look to break the short-term downtrend and rally to 4080, 4145, & 4175.) — Negative (bulls are on vacation. Bulls couldn’t get above 4050 making this a new resistance level that bulls will need to conquer)