Today’s sell off from the open was technical based. We broke several key Index levels. Most important was the was the SPY 200 day moving average which we closed below for the first time since the breakout. We stopped at the 21 day moving average and formed a Doji. The good thing about the Doji is that it allows us to set tight parameters. Doji’s are a candlestick bar the represent uncertainty. So breaking to the up or downside can give us a short indication on what direction we are going. With the massive rise in the 10 year bond to 2.6% we saw outflows from bonds and this could have led to inflows into beaten down tech. That is not what happened. Instead money flowed into pharmaceuticals, consumer staples and REITS . Some stocks such as LLY made all time highs today. Even the cigarette companies such as MO are setting up to breakout. We are seeing a shift from higher risk assets to safety and dividend yielding stocks. In regard to the QQQ we closed right on the 21 day moving average. The major difference between the two indexes is that there is no leadership in the Nasdaq. Semiconductors , software and biotech are all weak. The focal point continues to be energy names. Avoid small caps as they are most effected by rising interest rates. Its best to have a very short term out look until this settles down. There is too much uncertainty. Investments in oil names can come in as soon as there are peace talks. The best approach is too continually move your stops up. Jobless Claims are the next data point for the Fed and will be released at 8:30 am tomorrow. Let’s get to our charts!
📈Fed Minutes Trigger Selling
📈Fed Minutes Trigger Selling
📈Fed Minutes Trigger Selling
Today’s sell off from the open was technical based. We broke several key Index levels. Most important was the was the SPY 200 day moving average which we closed below for the first time since the breakout. We stopped at the 21 day moving average and formed a Doji. The good thing about the Doji is that it allows us to set tight parameters. Doji’s are a candlestick bar the represent uncertainty. So breaking to the up or downside can give us a short indication on what direction we are going. With the massive rise in the 10 year bond to 2.6% we saw outflows from bonds and this could have led to inflows into beaten down tech. That is not what happened. Instead money flowed into pharmaceuticals, consumer staples and REITS . Some stocks such as LLY made all time highs today. Even the cigarette companies such as MO are setting up to breakout. We are seeing a shift from higher risk assets to safety and dividend yielding stocks. In regard to the QQQ we closed right on the 21 day moving average. The major difference between the two indexes is that there is no leadership in the Nasdaq. Semiconductors , software and biotech are all weak. The focal point continues to be energy names. Avoid small caps as they are most effected by rising interest rates. Its best to have a very short term out look until this settles down. There is too much uncertainty. Investments in oil names can come in as soon as there are peace talks. The best approach is too continually move your stops up. Jobless Claims are the next data point for the Fed and will be released at 8:30 am tomorrow. Let’s get to our charts!