My Weekly Stock Debrief (Aug 8 - 12)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #32 of 2022 (Aug 8-12), our weekly newsletter reviewing the stock market performance.
1. Market Performance
The equity markets were up for the week, with the SP500 gaining 3.3%, the Dow Jones 2.9%, and the NASDAQ 2.7%. The CPI report for July showed that prices increased less than feared, a first sign that inflation may have finally peaked. The improved sentiment led to a 4th consecutive positive week for the SP500, with the index up 13% in Q3.
Next week will bring more insights into the strength of the consumer segment with the retail sale report for July due on Wednesday and many retailers reporting quarterly earnings, including Walmart (WMT) and Target (TGT).
While the rally may cool off in the coming days, the trend remains bullish, and it is very likely the SP500 will test its 200-day moving average (around the 4,300 level).
2. SP500 Sector Performance
All of the 11 SP500 sectors closed the week higher. Energy and Financials led this week, finishing up 7% and 6%, respectively. Consumer Defensive lagged but was still up 1%.
Only 2 sectors are positive year-to-date. Despite the recent volatility, energy remains the indisputable winner of 2022 with a 41% gain. Communication Services and Consumer Cyclical are the worst performers in 2022.
3. SP500 Heatmap
90% of the SP500 was up last week. The best performers were Nielsen Holdings (NLSN, +20%), Albermarle (ALB,+18%), and Principal Financial Group (PFG, +17%).
The worst performers were Moderna (MRNA, -8%), Illumina (ILMN, -7%), and Tyson Foods (TSN, -6%).
4. SP500 Breadth
Momentum and breadth are bullish for the SP500. More than 90% of the index is trading above its 20 and 50-day moving averages.
We again had more 52-week highs (21) than lows (3), as many stocks have recovered in the past month.
5. SP500 Daily Chart
The technical indicators are bullish, with the SP500 above its 20-day and 50-day moving averages and its trend lines ascending. The next major test will be the 200-day moving average, now just 1% away.
MACD is positive and rising, while RSI is at 73 and approaching the overbought level.
6. Market Sentiment
Fear & Greed Index
CNN's Fear & Greed Index tracks seven sentiment indicators and is published daily.
On Friday, the indicator closed at the “Neutral” level (55), a 5-point improvement vs. the previous week. The VIX was down 8% and closed below 20, implying an average level of market uncertainty.
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.
The last AAII survey reported that 37% of the respondents had a bearish market outlook, which improved from the previous week and got closer to the historical average.
7. Our Earnings Chart of the Week
Home Depot (HD) is reporting earnings next week. The 1-day stock performance post-earnings were negative in 9 of the past 12 quarters, for a daily return of -1.5% and an average move of +/- 3.5% on the earnings day.
8. Our Favorite Analysis of the Week
The SP500 has retraced 50% of the decline from its January 3rd high, a critical technical level.
9. The Week Ahead
91% of the companies in the SP500 have already published Q2 earnings, with 75% reporting EPS ahead of estimates. Retail stocks like Walmart (WMT), Home Depot (HD), and Target (TGT) will be reporting next week, among others.
Key economic reports for the week ahead will give us more insights into the strength of consumer spending, with the retail sale report for July expected on Wednesday.
10. My Weekly Stock Pick
This week, our stock pick was MRK, and the stock was up 0.7% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are up 9% cumulatively (no leverage, buy and hold for five days), and our options trading is up 151%.
Access our performance tracking here.
We will trade a stock in the Technology sector for the week ahead. Our stock pick will be released on Sunday, and in the meantime, you can learn more about our trading approach in the article below:
Read more about our trading approach here.
And remember to subscribe to My Weekly Stock to receive our stock picks, trading plan, and buy/sell alerts directly in your mailbox.
That’s all for My Weekly Stock’s debrief for week #32 of 2022 (Aug 8-12).
If you enjoy reading our newsletter, please share it via the link below:
You can also follow us on Twitter and Instagram where we post many more charts during the week.
Have a lovely trading week,
My Weekly Stock
Disclaimer
My Weekly Stock shares information and content on our websites, social networks, or newsletters only for educational purposes. The information contained in our publications has been prepared based on publicly available information and proprietary research. The author does not guarantee the information's correctness, accuracy, or completeness.
All information provided by My Weekly Stock or its affiliates is impersonal and not tailored to your needs, your investment objectives, or your financial situation. Nothing contained in the report shall constitute financial advice or an investment recommendation.
You are solely responsible for your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, or financial advisor. If you choose to invest, with or without seeking advice, then any consequences resulting from your investments are your sole responsibility. We are neither liable nor responsible for any profits or losses arising from any investment decision you have taken or made based on information we provide on our websites, social networks, or newsletters.
By using this site, newsletter, or any information provided herein, you indicate your consent and agreement to the terms of this disclaimer.