Overview
Stocks shuddered as the administration ramped up its warnings about a Russian invasion of Ukraine. The market’s reaction could lead to another ~6% move lower from here, but that’s only a guess.
The S&P-500 index held in the congestion zone around 4350, above its Jan 24 low at 4222, but a Russian invasion could push it through that low.
The FOMC released the minutes of the January meeting, which calmed the markets a bit. But uncertainty about the scope and speed of FOMC actions could add to the market’s volatility through at least the next meeting (March 15-16) and beyond.
Metals (gold, silver, platinum, palladium) rallied, along with agricultural commodities (corn, soybeans), but oil pulled back slightly.
Some travel and leisure stocks (MAR, EXPE) rallied, showing the market is looking towards reopening as mask mandates are withdrawn.
Key Question
Is anything trending higher in this market, given all the headline risk and bearish commentary? Again, we look through our database.
Performance Summary
Another losing week in the market, as fears of a Russian invasion of Ukraine took hold. The impact on the market could be brief but intense, but that is only a guess. As the S&P-500 chart shows, the market broke below a triangular consolidation, a sure sign of weakness. Technology stocks were weak, as top performers like Nvidia reported strong earnings but were punished for not exceeding their wildest expectations. However, the equal-weight S&P-500 ETF held up the best, suggesting the market does have some underlying support.
Our net bull-bear balance ended the week firmly in “strong downtrend” territory. Even a brief bounce in the market has been unable to get any follow-through, indicating the strength of the bearish sentiment.
Where the Up-Trends Are
It is easy to assume that nothing is trending higher in such a bearish market. But long-side opportunities do exist. For example, commodities such as gold and soybeans have rallied well all week. But first, we show a scan of all US ETFs and S&P-500 stocks ranked using the Chande Trend Meter to find the ones with strong uptrends (via the MetaStock Explorer).
The AAAU Goldman Sachs Physical Gold ETF was #4 on the list above with a CTM value of 99.46, and its chart (below) shows that it has rallied over the period of weakness in the market. Other gold and gold-related funds (GLD, DGL, SGOL, BAR) have also trended higher.
Next, we look at Everest RE group, which was on top of the CTM scan table. The green arrow shows that the swing system has been long RE stock since December.
Another fine example is Phillip Morris which is further down the list and hence not visible in the screenshot shown above. This week's strong move in PM was a welcome offset to the general market weakness. (PM was also on the table from my website - see below).
Lastly, we show the Teucrium Corn Fund, which is in the third row up from the bottom of the screenshot of the CTM scan. It, too, has moved higher nicely.
A narrower scan of just stocks in the S&P-500 is shown below. Note the overlap with the CTM Scan from MetaStock shown above (for example, RE, PM, NEM).
These charts should convince you that the CTM can look for trading opportunities to offset the down-shift in the market. For example, in line with our discussion of opportunities in the Travel and Leisure space, EXPE (Expedia) makes our CTM scan list.
Wrap-up
My posts should give you a good starting point, with context and suggestions if you like to do research. Then, you can visit my website, chandeindicators.com, for more information and ideas. I hope you stay tuned and help by subscribing and recommending it to your friends and colleagues.
Thank you for spending some time with me.
Disclaimer
And now for some housekeeping. This publication is for “edutainment,” education, information, and entertainment purposes only. It is not to be construed as investment advice. Past performance is not necessarily indicative of future results. Our disclaimer at chandeindicators.com is included herein by reference.