Something severe ahead of us? My thoughts for the rest of the week - 2023/03/02
I think that something big is brewing up in the market!
Hello and welcome to another issue of 🕵 The Seeker 🕵
"We all float down here." - Stephen King
The Week So Far
It was a real fight between bulls and bears last 2 days in the stock market, with rollercoaster moves intraday and very small daily moves, however this may be about to change soon? ISM PMI index came lower than expectation which fueled the sell yesterday. The mood in the market is kinda shifting fast now as well momentum. This edition would be only on analyzing the current overall market situation, I don’t have any stocks recommendations yet, except that I am still holding and increased my position in OIH 0.00%↑ ETF 😎. (In Oil We Trust)
So over last 2 weeks the Fear/Greed index moved from “Extreme Greed” to “Greed” and now its in the “Neutral” territory.
Analyze Some Charts
SPX
What was going on last few sessions is that the SPX was at a double support level and there was a fierce fight between bulls and bears, however today SPX futures are slowly continuing the move down, looks like the support is ready to be broken? Momentum is heading lower on both RSI and MACD.
My quant tool suggests that the current level may be broken, it doesn’t look like its in the extremum yet, like in the past. That’s further confirmed from the Stationary Returns tool.
SPX doesn’t look like it’s in the extremum, looks like there is more way to go down!
SPX Breadth indicator as well is showing signs of weakness growing accross the market.
2-Year Yield
The 2-year yield, which is proxy for interest rates, continues its slow grinding climb up, which is putting more weight on the market, specially tech stocks.
Dollar Index
Dollar index has as well resumed its upwards trajectory and most probably heading towards the previous top over next weeks/months. This would put more weight on the global economy.
Biggest Stocks In Terms Of Weight In SPX
Let’s Analyze the charts of the biggest stocks in SPX, because actually they are the ones which moving the current market.
What we can see is that AAPL, which is the most important stock in the current market, on a weekly basis is hanging in the air. And there is not much support below it up to the price level ~125-130$. That’s roughly 14% down from here.
Microsoft, which is the next stock after Apple in terms of importance, as well looks like has around ~10% before the support level.
The situation with Tesla haven’t really change much since last 2 weeks, still a whopping 50% before recent lows.
After the great earnings numbers, Nvidia jumped almost 15%, however I see a potential for the price to close the gap in next weeks, so that’s around ~10% downard move from here.
Google is for the first time threathened by competitors in temrs of the newest AI chatbots, why would you ask google, when you can ask the Chat GPT bot, and he knows everything. I see downside potential in Google as well.
Final Thoughts
Overall, I think the situation looks like to get more tense with each day, and all signs are pointing in one direction, and for me it is not up! Most probably the fight between bulls and bears will continue, but I think for next weeks at least the bears may prevail. I will be cautious here and look for potential long put options on QQQ opportunities!
😎 Cheers! 😎
Disclaimer: Please note that the information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. The information provided should not be relied upon as a substitute for financial, legal, or professional advice. Before making any decision, it is important to consider all relevant information and consult with a professional who can provide personalized advice based on your specific circumstances. The author and publisher of this article cannot be held liable for any actions taken based on the information provided. This is not a recommendation to buy or sell any specific securities or financial instruments.