Here is this week’s video
The S&P500 hit all-time highs 5 days in a row from Tuesday Aug. 10 till Monday August 16. During that time, 4 stocks went from BUY Signals to Sell Signals, out of about 6400 stocks.
On the last day of that run, the markets opened very low, but managed to rally in the afternoon to and end at new market highs. On Tuesday Morning, the markets opened down and went further down. Nasdaq, the DJIA, and the S&P500 were each down about 1.5% before a rally erased half the losses.
I then reran the numbers to create a new interim Slay the SPiDeR circle.
Here is the circle from the close on Friday Aug. 13.
There are 15 sectors on the Bull side, and 25 on the Bear side.
Here is the circle from after the close on Tuesday Aug. 17.
Notice that 8 of the sectors went from the Bull side to the Bear side. Those sectors were Real Estate, Telephones, Steel, Software, Gaming, Internet, Leisure, and Healthcare. There are now 7 sectors on the Bull side and 33 on the Bear side.
In addition, it should be noted that both Semiconductors and Bio/Medical sectors are on the brink of also moving to the Bear side.
The weakest major sectors are Healthcare and Consumer Discretionary stocks. The strongest major sectors are Financials and Industrials.
The Financials and Industrials had very good earnings for 2Q. The earnings reporting season is nearly over, so we cannot expect that to continue to prop up the markets for at least a couple of months now. We are in the doldrums in regards to earnings now.
The major market news this past week was the embarrassing American collapse in Afghanistan, the sudden slowdown in retail sales in July, the threat of the covid 4th wave shutting down restaurants, travel, and new covid mandates for schools, businesses, and the general population. The Michigan Consumer Confidence survey also posted it’s 6th largest downturn in it’s 50 year history this month, meaning Americans are losing confidence in our government and economy. As a result, the retail sales numbers in July falling quite short of expectations was not really a surprise.
The swing in the number of stocks on BUYs and SELLs was also quite remarkable for Monday and Tuesday. We went from nearly equal numbers to 2998 BUYs and 3412 SELLs in just 2 days, on a 1.5% pullback in the S&P.
It appears my guess 4 weeks ago that the 4 O’clock Loop downturn would be underway by now was a week or perhaps 2 weeks off-base. My apologies for that. There is a 50-50 chance it might still be underway by Thursday/Friday, but don’t hold your breathe.
I’m going to be adding to my Changing My Life puts late this week.
Consider protecting your portfolio of stocks by either taking some profits, or buying insurance in the form of a Put Option. 1 S&P500 (SPY) put contract will protect roughly $25,000 of your portfolio. If choosing that route, then buy the October 15 expirations using an at-the-money strike price.
Let’s Go Get the Money…
or at least keep what we have.
JimB