My Weekly Stock Debrief (Apr. 8 - 15)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #15 of 2022 (Apr. 8 - 15), our weekly newsletter reviewing the market performance.
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1. Market Performance
The equity markets were down for the week, with the SP500 losing 2.1%, the Dow Jones 0.8%, and the NASDAQ 2.6%. The indexes were under pressure after the Consumer Price Index for March came in at 8.5%, the highest level in the past 40 years. The expectation of a higher interest rate environment and a slowing-down economy weighed on the markets and impacted in particular the tech shares.
2. SP500 Sector Performance
Only 4 of the 11 SP500 sectors closed the week higher. Materials, Industrials, and Energy led this week, but none rose more than 1%. Health Care and Technology lagged and declined by 2.9% and 3.8%, respectively.
Only 3 sectors are positive year-to-date. Energy remains the indisputable winner of 2022 with a 44% gain. Consumer cyclical, Communication Services, and Technology are the worst performers in 2022 and are down double-digits.
3. SP500 Top / Bottom Stock Performers
Airlines stocks performed well this week after Delta Airlines reported better than expected earnings and helped lift the whole sector. Many more airlines are reporting next week, including United Airlines and American Airlines.
Technology stocks continued to lag the markets. In line with the broader technology sell-off, Nvidia lost another 12% and is down almost 30% in 2022.
4. SP500 Breadth
The SP500 breadth indicators worsened this week. Only 38% of the stocks are within 10% of their 52-week highs, declining 1 point in the last five days.
49% of the index has an RSI above 50, a reading 6 points below the previous week. 47% of the components of the SP500 are trading above their 200-day moving average, a reduction by 2 points vs. last week.
Read more about market breadth
5. SP500 Daily Chart
The SP500 technical indicators are overall bearish. The index is trading below its 20, 50, and 200-day moving averages. MACD crossed negative, the RSI is at 44, and both are on a downtrend.
6. Market Sentiment
Fear & Greed Index
CNN's Fear & Greed Index tracks seven sentiment indicators and is published daily.
Read more about the Fear & Greed Index.
On Friday, the indicator closed at the “Fear” level (42), a 6-point reduction vs. the previous week, and the VIX closed the week again above 20.
AAII Investor Sentiment Survey
The American Association of Individual Investors surveys each week its members on the direction of the stock market for the next six months. The results are published weekly on Wednesdays.
Read more about the AAII sentiment survey
The last AAII survey reported that 48% of the respondents had a bearish market outlook. It is a 7-point increase vs. April 6th. The bullish reading is only at 16%, the lowest level since 1992 (more about it below).
7. Our Chart of the Week
The Q1 2022 earnings season is picking up steam next week, and Netflix will release its results on April 19th after the market close. In the past 12 quarters, the stock traded down 10 times, for an average 1-day performance of negative 3.9%.
8. Our Favorite Analysis of the Week
Worst Bullish Sentiment since 1992
The bullish sentiment among individual investors is at the lowest level since 1992 and reflects a frustrating year for investors so far.
Tom Lee's (Fundstrat) view on the market
Tom Lee from Fundstrat shares his view on the current market conditions in this excellent interview for CNBC.
9. The Week Ahead
The Q1 2022 earnings season will continue with further bank stocks reporting, like Bank of America and mega-caps like P&G, Tesla, and Netflix.
Several Fed members, including chairman Jerome Powell, are speaking next week, and they may provide more perspectives on the Fed's future actions, especially after another week of hot inflation reports. We will also get updates on the US housing markets and CPI reports for the Eurozone and Japan.
Beyond earnings and economic reports, markets will look for updates from Ukraine, the level of interest rates, and the COVID situation in China.
10. My Weekly Stock Pick
This week, our stock pick was United Health (UNH), and the stock closed down 1.6% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are up 36% cumulatively (no leverage, buy and hold five days), and our options trading is up 221%.
Access our performance tracking here.
For the week ahead, we will trade a stock in the energy sector. This stock is one of the best performing mega-cap this year and is trading less than 2% from its 52-week high.
You can learn more about our trading approach in the article below:
Read more about our trading approach here.
Subscribe to My Weekly Stock to unlock our stock picks, access our trading plan, and receive timely buy/sell alerts. We offer a 14-day free trial to all new members!
That’s all for My Weekly Stock’s debrief for week #15 of 2022 (Apr. 8 - 15).
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Have a lovely trading week,
My Weekly Stock
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