My Weekly Stock Debrief (Sep 5-9)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #36 of 2022 (Sep 5-9), our weekly newsletter recapping the stock market performance.
1. Market Performance
The equity markets were up for the week, with the SP500 gaining 3.7%, the Dow Jones 2.7%, and the NASDAQ 4.1%. The S&P 500 broke its three-week losing streak in a broad-based rally. The index displayed strength despite several hawkish comments from FED officials and the European Central Bank's historic 75bps rate increase.
However, after 3 consecutive positive days, this rally is bound to cool down next week. We will likely experience more volatility next week, especially with the CPI for August released on Tuesday.
While the SP500 is firmly back above 4000, the ultimate test remains the 200-day moving average, a critical level that marked the end of the summer rally in August. Until it is successfully cleared, we will have low confidence that the bear market is truly over.
2. SP500 Sector Performance
All the 11 SP500 sectors closed the week higher. Consumer Cyclical and Materials led and were up 5.8% and 5.0%. Energy lagged but still finished up 0.8%.
Only 2 sectors are positive year-to-date. Despite the recent volatility, energy remains the indisputable winner of 2022 with a 45% gain. Communication Services and Consumer Cyclical are the worst performers in 2022.
3. SP500 Heatmap
91% of the SP500 stocks were up in the last 5 trading days. The best performers were Regeneron (REGN, 21%), Albemarle (ALB, 17%), and SolarEdge Technologies, Inc. (SEDG, 16%).
The worst performers were McCormick (MKC, -6%), Occidental Petroleum (OXY, -4%), and Comcast (CMCSA, -4%).
4. SP500 Breadth
Momentum and breadth are mixed for the SP500. Two-thirds of the index trade above the 50-day moving averages but the same proportion trade below their respective 200-day.
We again had more 52-week lows (36) than highs (12), with softness early in the week and new highs on Thursday and Friday.
Read more about moving averages
5. SP500 Daily Chart
The technical indicators are slightly bearish, with the SP500 below its 20 and 200-day moving averages but recovering the 50-day this week. However, like the summer rally, the ultimate test remains the 200-day moving average, and a positive crossover would be highly bullish for the market.
The MACD is still below its signal line but is improving, and we could see a positive cross-up in the coming days or weeks. The RSI is at 51, strongly increasing vs. the previous week.
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 (45), a 4-point improvement vs. the previous week. The VIX was down 10% and closed below 23, still implying a 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 53% of the respondents had a bearish market outlook, a 3-point deterioration from the previous week and still largely above the historical average.
7. Our Earnings Chart of the Week
Adobe (ADBE) is reporting earnings next week. The 1-day stock performance post-earnings were positive in 5 of the past 12 quarters, for a negative daily return of -0.1% and an average move of +/- 5% on the earnings day.
8. Best Tweet of the Week
9. The Week Ahead
99% of the companies in the SP500 have already published Q2 earnings, with 75% reporting EPS ahead of estimates, slightly below the 80% historical average. Companies like Oracle (ORCL) and Adobe (ADBE) will report next week.
The Bureau of Labor Statistics (BLS) will publish the latest Consumer Price Index (CPI) for August on Tuesday and will provide us with more insights on consumer inflation.
10. My Weekly Stock Pick
This week, our stock pick was AMGN, and the stock was up 1.6% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are up 4% cumulatively (no leverage, buy and hold for five days), and our options trading is up 139%.
Access our performance tracking here.
We will trade a stock in the Consumer Cyclical 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 #36 of 2022 (Sep 5 -9).
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.