What a week. Holy Shit Batman keeps repeating in my head. Yep, this isn’t your regular stuffed shirt stock research. I’m dead serious about what I do but if we can’t have a little fun mixed in then count me out. OK, some serious stuff…
Major stock indexes all over the world sold off, again, last week. Well, except Mexico (EWW). EWW is popping off long term rising support. Go figure.
iShares MSCI Mexico Index Fund ETF (EWW)
The S&P 500 Index ETF (SPY), the Nasdaq 100 (QQQ) and Russell 2000 Index (IWM) got crushed Wednesday-Friday after a little run up Monday and Tuesday. Prices closed at the lows of the week and came to rest on precarious levels. There are no signs of bottoming.
SPDR’s S&P 500 Trust Series ETF (SPY) weekly
Invesco QQQTrust Ser 1 (QQQ) weekly
iShares Russell 2000 Index Fund ETF (IWM) weekly
The technology sector ETF (XLK) has closed below (again) rising intermediate support. No signs of bottoming. Tech is a wreck.
SPDR’s Select Sector Technology ETF (XLK) weekly
The only sector that is doing well is utilities (XLU) which I recommended in May.
SPDR’s Select Sector Utilities ETF (XLU) weekly
The bottom line is I wouldn’t recommend buying anything right now. There is just too much risk.
Interest rates are just all over the map. TLT, the 20+year Treasury Bond ETF, spiked up into resistance last week after trading mostly down from the end of August. This was likely caused by capital fleeing equities, buying bonds and pushing rates lower. The fear now, in a downward trending equity market, is lower interest rates. Kind of counterintuitive but if rates are now moving lower without any QE, money is rotating from equities to bonds. The good news is that TLT has run into resistance which may push rates higher which would probably be a plus for equities in the current environment.
iShares Barclay’s 20+ Year Treasury Bond Fund (TLT)
Gold (GLD) and the US$ (UUP) have an opportunity to continue higher if equity selling expands. Consider GLD and UUP as a hedge to lower equity prices.
SPDR Gold Trust (GLD) weekly
Invesco DB USDollar Index Bullish Fund (UUP) weekly
There are some bright spots amid the turmoil. I have about 20 names on my serious watch list but in light of the volatility the market is experiencing I think it best to limit exposure until there are clearer signs that the selling is exhausted.
I’ll give you a little sneak peek of one potential bright spot. Facebook Inc (FB) has corrected 35% from its high in July. Price is trying to settle on support from 2017 that looks to be fairly strong. If it starts to bottom in here it is a logical place to begin another significant leg up. I’ll send you an alert if I buy some.
When this selling is over with there are going to be some incredible buys. We just need to be very patient.
If you would like me to chart and comment on any stock or ETF just send me an email. I would be happy to do this for you.
That’s it. I don’t want to bore you any longer than required.
Trade Smart,
Don