My Weekly Stock Debrief (Sep 26-30)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #39 of 2022 (Sep 26-30), our weekly newsletter recapping the stock market performance.
1. Market Performance
The equity markets were down for the week, with the SP500 losing 2.9%, the Dow Jones 2.9%, and the NASDAQ 3.0%.
The major indexes ended another volatile and upsetting week for their third consecutive weekly drop. The SP500 hit a new low for the year and is currently trading at levels last seen in 2020. September is historically the weakest month, and this year was no exception. The SP500 lost 9% in September, with 95% of the stocks finishing the month down.
There is no evidence that the bear market is close to an end, especially as the markets are navigating several threats, including inflation, economic recession, and a hawkish FED. And even though we may get a few days of relief, volatility will likely remain elevated.
2. SP500 Sector Performance
Only 1 of the 11 SP500 sectors closed the week higher. Energy led and closed up 2.2%. Utilities and Technology lagged and finished down 8.7% and 4.0%.
Year-to-date, only 1 sector is positive. Despite the recent volatility, energy remains the indisputable winner of 2022 with a 30% gain. Communication Services and Consumer Cyclical are the worst performers in 2022.
3. SP500 Heatmap
Only 19% of the SP500 stocks were up in the last 5 trading days. The best performers were Biogen Inc. (BIIB, 35%), Marathon Petroleum (MPC, 9%), and Valero Energy (VLO, 6%).
The worst performers were Carnival Corporation & plc (CCL, -21%), CarMax, Inc. (KMX, -17%), and V.F. Corporation (VFC, -16%).
4. SP500 Breadth
Momentum and breadth are bearish for the SP500. 90% of the index trade below the 50 and 200-day moving averages.
We again had more 52-week lows (206) than highs (1), with 40% of the index making a new low in the last 5 days.
Read more about moving averages
5. SP500 Daily Chart
The technical indicators are bearish, with the SP500 below its 20, 50, and 200-day moving averages. The index made a new low for the year, and we may see further weakness.
The MACD is still below its signal line, with no sign of reversal yet. The RSI is at 28, in line with the previous week and almost at an oversold 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 “Extreme Fear” level (15), a 9-point deterioration vs. the previous week. The VIX was up 6% and closed above 31, implying a very high level of market uncertainty.
AAII Investor Sentiment Survey
The American Association of Individual Investors surveys its members each week 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 61% of the respondents had a bearish market outlook, with no change from the previous week. Note that this is one of the five highest bearish sentiment readings since 1987.
7. Our Earnings Chart of the Week
Levi Strauss (LEVI) is reporting earnings next week. The 1-day stock performance post-earnings were positive in 7 of the past 12 quarters, for a 1-day return of +1.1% and an average move of +/- 4.9% on the earnings day.
8. Best Tweets of the Week
9. The Week Ahead
Almost all the companies in the SP500 have already published Q2 earnings, with 76% reporting EPS ahead of estimates, slightly below the 80% historical average. Companies like Levi Strauss (LEVI), Conagra Brands (CAG), and McCormick & Company (MKC) will report next week.
Next week, the Labor Department’s nonfarm payrolls report will provide more information on the job market strength.
10. My Weekly Stock Pick
This week, our stock pick was UNH, and the stock was down 0.5% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are flat cumulatively (no leverage, buy and hold for five days), and our options trading is up 135%.
Access our performance tracking here.
We will trade a stock in the Healthcare sector for the week ahead. Our stock pick will be released on Sunday. 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 #39 of 2022 (Sep 26-30).
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Have a lovely trading week,
My Weekly Stock
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