Market Thoughts Heading Into The Week of 3/13/2023
SIVB, News, and everything else that doesn't matter ;)
The market continues to be a news-driven mess. Here are some thoughts I posted earlier tonight:
Throughout the rest of this Upside Unlimited edition, I’ll show you how my weekend routine keeps me grounded in the process and system, focusing on the number of actual setups (or lack thereof) that give me the opportunity to make money…
Weekend Routine Notes
Charting Major Themes
Key takeaways
Weekend Routine Notes: How I View The Market’s Recent Action
It’s no secret that the majority of stocks got decimated to end the week last week.
One of the foundational pieces to my weekend routine is reviewing individual industry action over the past month (powered by TraderLion), which we can see here:
It’s clear that the strongest groups on a 1-month basis are Cannabis, Home Construction, and Semiconductors (which I’ll chart out below).
The worst-performing groups are Miners, Genomics, and China Internet.
On a 1-week basis, this is the picture:
This is really where we can see the magnitude of the week’s action. Not a single group was green on the week based on the performance-momentum (not just price % change) chart above.
The losers?
Banking, Genomics, Blockchain all get hammered. Financials & biotech not far behind.
Looking back on Thursday’s “What Would Webby Do”, the major distribution into Friday wasn’t a surprise.
The main takeaway from all of the information above is this:
I see absolutely no reason to be long any particular groups/stocks within those groups after a week of sheer distribution. My process is telling me that the long side of the market is not in favor – no need to fight the market.
Cash is king (and will be for the time being).
Charting Major Themes:
As we saw in the performance-momentum chart above, XLF (Financial ETF) took a massive hit last week. A look at individual charts (SIVB, SCHW, etc) show considerable distribution. Not a good place to be when banks are *massively* under-performing.
XBI (Biotech ETF) breaks through all weekly moving averages on increased volume. RS line now in the dumps as well. There may be individual biotechs that hold up, but on an aggregate basis this group looks to be in trouble.
IWO (Russell 2000 Growth ETF) breaks through all moving averages on slightly increased weekly volume. Currently a set of higher lows and one higher high, watching the $208 area to hold on weakness for growth to continue to build out constructively.
SMH (Semiconductor ETF) surprisingly holds up incredibly well above the rising 10-week MA. If the market continues to deteriorate, want the $230 area to hold on weakness.
Names Showing Relative Strength:
SQSP 0.00%↑ Put some notes on the chart below. Think this name still in tact post EPS gap up.
MAXN 0.00%↑ Trading & closing above the HVC on Friday was impressive. See if it can continue to build out around the $27.5 mark.
DUOL 0.00%↑ Any name above the 10EMA with all KMA's in the correct hierarchy is impressive. Will continue to track this name as a top dog.
Key Takeaways:
My process has shown me this weekend that the market is not ready for long exposure. There are maybe 5 (3 that I listed above) stocks total that have a decent shape, which is no environment to be aggressive in.
With SIVB situation resolved and news coming out over the past couple of hours, we’re bound to have a volatile open to tomorrow’s session. The focus for me will be CASH and waiting for the dust to settle.
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The sell stops on SQSP must be just a millimeter lower. Thanks for the excellent work.
Next time, would you please explain the meaning of "HVC." Thanks.