Helmets On - Volatility Is Here!
Wow! Yesterday was an absolute snoozefest and today… we just closed out the worst day for stocks since 2022. You awake yet? Good. It had been creeping in around the edges lately, but volatility hit the markets like the Kool-Aid today. We saw the VIX skyrocket more than 22% today to top 18 - it…
Why We’re Following Relative Strength Closely
I hope you paid attention to my warnings in the past week about the market's abrupt shift to “risk-off” status. This was plainly evident by the flight-to-safety trades in the stock market, and capital seeking refuge in defensive sectors. With that being said, our strict adherence to relative strength principles has allowed us to weather…
Stocks Are Chopping Near Highs… And Looking for a Leader
The recent massive selloff in tech should prove what I’ve been saying for weeks now: The one-time leadership sector is slowing down. Nature abhors a vacuum and the stock market’s not all that different. The hunt for a new leading sector is on, and like some other groups I could mention, there are suddenly new…
Atlas Shrugged… And the Market Rallied
The U.S. political landscape underwent a second earthquake in as many weeks as President Biden announced (by Tweet, no less) that he was ending his embattled candidacy for the Democratic nomination for the presidency. His campaign for the nomination, which was all but totally sewn-up, ended in a bit of a whimper as he shrugged…
TheoTrade’s Tale of the Tape: Sector Risks Are Reflecting Political Risks
Hello TheoTrader, Stocks were mostly lower last week, with only the Dow Jones Industrial Average finishing in positive territory. This blue-chip index’s outperformance in recent weeks is a testament to capital seeking areas of safety right now. The biggest risk I see in markets right now isn’t coming from the Fed, monetary, or even…
Bear Tones Echo Through Markets - Here’s What to Do
Stocks might have caught a break today if it weren’t for a disastrous CrowdStrike snafu that took down systems almost across the world. For the moment, though, the selling is still fairly concentrated in CRWD and a few other names out there. The bears are still making choppy, cyclical moves. The advance/decline line, which looked…
Let’s Talk About the Regular Trading Hours Retest
Look at a 24-hour chart of the S&P 500 ETF, SPY, and you’ll see clear gaps in the price action overnight. I’ll show you what I mean in a second, but bear with me. Those happen precisely because of overnight activity; it’s not magic. If the market was open 24 hours a day… the gap…
Risk-Off Signals Mount as Flight to Safety Intensifies
After stocks were bid for about three months straight, we finally saw our first bit of real selling this week. Semiconductors and technology led the selloff, which is a concern given the tendency of those sectors to act as leading indicators. This led to the Nasdaq suffering the brunt of the selloff, as it…
Selling Consumes Big Tech - Here’s What’s Next
That eerie, everywhere-at-once sucking noise you hear when you go outside? That’s the sound of hundreds of billions of dollars in market cap leaving tech stocks. The selling we’ve seen today has been incredibly concentrated in the tech sector… and therein lies the risk. On a point-for-point basis, a drop of 541 on the NASDAQ…
The Dow, the Russell, and the Biotech Sector Are Storming Higher - Here’s What to Do About It
It’s a bull market, alright… and our playbook has helped us to take full advantage. XBI, an ETF that tracks biotech, is up 8% in five sessions. The gold ETF, GLD, is up 3.5% in the same timeframe, while Bitcoin is up more than 13% in five days. The Dow Jones Industrials have come up…