Inverted Head-and-Shoulder?
As hot inflation cools the market, we wonder if a pattern is forming.
Overview
The inflation data came in above expectations, but some large managers wondered if this was the peak. However, the fear of a fierce Fed and hot inflation data cooled the markets this week.
Predictably, tech stocks got hit hard, but the small-cap stocks were relatively stable.
The one hope for the bulls is that the earlier lows have held, and we may even be putting in the right shoulder for an inverted head-and-shoulder pattern.
Performance Summary
A down week, as traders worried about the war and did not wish to carry long positions over the holiday weekend.
The sensitive net bull-bear balance from leveraged and inverse index ETFs became more negative, so the mood remained bearish through the week. Further, we made lows below -60, so I take that to indicate that the bearishness will continue.
The major sectors that are still trending higher are as follows:
Looking further into the Consumer Staples sector, the top trending stocks are these.
We highlighted Hershey last week, so this week we point to Cardinal Health (CAH), which moves steadily higher this week, even as some other stocks in the sector, such as ABBV, reversed strongly after a long trend.
Energy stocks also had a good week, especially Murphy USA, a gasoline retailer and convenience store operator. About 65% of the 121 stocks in the Energy sector had Chande Trend Meter values greater than 80, confirming that the sector is rising implacably.
Wrap-up
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Disclaimer
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