Weekly Macro & Sector Reviews – Feb 7th, 2022
Weekly Macro & Sector Reviews
MACRO REVIEW:
https://power-investing.com/weekly-macro-review-02-07-2022/
Daily Triple play chart shows the ups and downs of the week as we try to work off the lows. Still in bear ranges, but Friday gave the bulls a chance to retrace a larger portion of the drop if they take the opening. $SPY did the best job holding the early week gains. Burden of proof is still on the buyers.
Next we look at the Intermarket view by ranking all of the asset classes with each other. Commodities dominated this week with JJC joining USO at the top performer. We discussed last week the UUP direction could provide clues to commodities and the drop in the dollar lit up JJC and USO alike It is worth noting, GLD and SLV didn’t participate as much. Equities are still in the bottom half so caution persists.
Size and style remains ranked from Large to small and Value to growth across all levels, but chart below is sorted by the weekly performance which flipped the list and put many growth areas on top.
- * Breadth is making slow progress. Needs to continue and expand from short measures to longer term ones.
- * MA Breadth all in the 30% zones and need work, but 5>20sma just came out of the lower quadrant for a signal
- * Summation tried to flatten and turn, but got pushed back end of the week
- * Oscillator needs to clear flatline to get any more progress
- * NHNL still on a full sell signal. that needs to change
Energy is the leader still by a solid clip, but Financials made a bit RSI move this week up at the same time Consumer Staples stumbled on most levels. Behind energy, Communication Services and Information Technology put in solid, albeit rocky, weeks. If the bounce continues we are likely to see more stretched areas continue to retrace.
Just a quick glance at the subsector performers for the week shows it littered with Oil & Gas subsectors, but also showing some low RS spaces putting in the strongest bounces and held most of it into the end of the week. Interactive Media & Entertainment, Semiconductors, Industrial Metals, Brokerage & Capital Markets all worth a closer look.
We cover all of this and more in the video at the top of the page. Also look for our Power Sector Review for a closer look under the hood. you can find these and other charts on our Stocktwits and Twitter feed @Power1nvesting and throughout this site.
SECTOR REVIEW:
https://power-investing.com/weekly-sector-review-02-07-2022/
As we start the week Energy, Financials, and Utilities still lead in RS rankings. However, late last week consumer discretionary and tech made an attempt to outperform. It will be interesting to monitor this rotation and if it has any staying power.
Financials was the RS mover leader last week as rates shot up. While Energy remains the leader, the question is will it slow down and then what? We will be able to see exactly when that happens with and react as necessary based on how it holds up to any challenge. If energy takes a rest and rates take a break, we may see technology and discretionary get the bid. Amazon was a catalyst late last week for discretionary and will need to follow through on its earnings move, but it certainly was not the only mover in the space.
The short term breadth picture is very mixed, while still leaning toward the weaker side. We see mixed results on the 10 days highs and 10 day lows. The percent of stocks above their 20 day moving average still shows mostly red, but breadth thrusts continue to work off their extremes. Most were oversold, so those that are the highest here saw the strongest participation off the recent lows.. Energy still continues to lead along with financials. It’s interesting to note that Communication services has the most stocks trading above the 20 day moving average, and they attempted to make significant 10 day highs as well. An area to keep an eye on if the bounce gains steam as it has been a chronic underperformer for a while now.
Equal weighted Subsector ranked by weekly performance shows the start of a potential rotation into discretionary, health care, and technology. By ranking by weekly performance and looking at the RS rankings, we can see that the recent relative losers made the most gains last week. There’s a lot of red at the top of the RS rankings. It’s interesting to see Hotel, Restaurant, and Leisure outperforming all others. The re-opening theme will be something to monitor as last week’s price movements show it should be.
The video will take you through our move down into the sectors that are moving and look at many of the setups based on our 4 pillars of relative strength. Also a quick introduction to the Custom RS scans that allow you to put in stocks, ETFs and mutual funds and rank them versus each other using our relative strength scoring.
As always, I hope this helps!
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