Daily Market News - 11th August 2022
The Big Summer Lift Off
What a week.
Calling market tops and market bottoms, that’s the easy bit.
But where we are RIGHT now, that’s the tricky bit. Trying to figure out whether we should be booking massive profits, or continue to hold the nerve and stay the course.
In this weeks letter, I have important charts as well as a beaten up area of the market that could potentially be setting up for a rebound / mean reversion.
But lets start with Captain Obvious.
It’s an obvious starting point. In my world we’re now pushing up against a decent hurdle for price, if we resolve higher, it’s going to be another feather in the cap of the bulls.
Before you say it, I know, the economy’s a shit show.
So I’d argue this is the time more than ever to pay attention to charts over headlines.
The macro guys with their economic models aren’t having a great time just now.
They can’t understand why stocks put in a bottom 2 months ago.
As the chart shows, it was all perfectly reasonable.
9.5% left to go after a massive 12.5% rally off the lows. Will we get back to All Time Highs?
I’ve honestly no idea, but I do know how to manage risk and use systematic process.
Metals and Mining have been great for a few weeks now. The above chart is 1 of the charts from our members accessible Sector ETF Chartbook and while I already made a bottom call. it looks to be moving above another significant level.
If we see that $47-$48 level hold up in a pullback (something I’m now expecting), it could be another good entry.
If metals and mining names are going to move higher (many of them have VERY reasonable fundamentals), stocks like FCX become appealing. Again, I already made a bottom call on this a few weeks ago, but it could now just be getting started.
The biggest danger is stocks falling off a cliff on the back of a “news event” and a ripping VIX (which is at the low end of its range).I’m open to it.
So I’ll wrap up this weeks letter with a quote (by me last month).
“The great thing about great stocks that’ve crashed … they eventually turn around and become uptrends. By the time all the beaten up stocks show up on your relative strength scans, you’ve already lost the bulk of the move.”
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