I explained how and why a 20% broad-market drop was possible – and even likely.
Sure enough, stocks went on to suffer their first official bear market since the COVID-19 crash in March 2020. The S&P 500 Index fell as much as 12% in two weeks in June alone.
Now, we can't escape the reality we face today...
We're living in a recessionary environment. And even worse, it looks like the Federal Reserve wants to keep it that way.
The problem, as you likely know, is inflation...
The Fed is doing everything it can to fight inflation. But the central bank is using blunt weapons. In fact, the Fed's best weapon for curbing inflation hurts everyday people.
That's just what happens when you raise interest rates. Making money more expensive squeezes the people who have the least money to begin with.
It hurts us as investors, too...
Put simply, expensive money limits growth. And downward growth revisions translate directly to pain for stocks. That's exactly what we're seeing right now...
The S&P 500 is down roughly 20% this year. And tech stocks have fared even worse. The tech-heavy Nasdaq Composite Index is down about 27% in 2022.
So I don't blame you if you think this is the end of stocks. It sure feels like it.
The Fed is tightening its lock on the economy. And it looks like the broad market will need to endure more pain before things turn around.
But when it comes to investing, the broad market is a terrible measure of opportunity...
Wall Street legend Marc Chaikin just released brand-new details on his TOP 5 "best of the best" industry stocks – little-known opportunities poised to potentially return three to five times gains while most stocks continue crashing. At least today, you can get the name and ticker of one of these stocks, 100% free. Plus, Marc's No. 1 stock to SELL immediately – before it goes bankrupt. Click here for details before tomorrow's opening bell.
Even to this day, that's how most regular investors and the mainstream financial media think and talk about the market. But in reality, the stock market isn't just one big thing...
It's actually a collection of sectors and subsectors.
That's just scratching the surface, too. These sectors and subsectors can be split in a multitude of ways...
For example, our Power Gauge system tracks and rates 67 different information-technology exchange-traded funds ("ETFs"). And it also breaks down all the individual stocks in these ETFs.
Of course, I realize why most individual investors focus on the broad market. It's easy to look at a single chart and say, "I see the S&P 500 is down this month."
But the Power Gauge sees things differently. It slices the market into its core components. And by doing that, it helps us uncover investment opportunities hiding below the surface.
The Power Gauge sees more opportunity than you might expect right now...
For example, it rates one sector as "very bullish" even in these market conditions. That sector is up about 9% over the past year, easily beating the S&P 500.
The system rates another sector as "neutral+" today that has soared nearly 30% over the past year. While that rating isn't as clear-cut as "bullish" or better, it tells us that the Power Gauge sees a potential opportunity.
Folks, it may feel like we're at the end of the road in stocks. After all, the broad market is taking a beating. The S&P 500 and other major indexes are struggling so far in 2022.
But opportunities are still available. And I'm not talking about microcap stocks or other high-risk strategies, either.
Entire segments of the market are still producing returns for investors. They're still outperforming the broad market. And finding them is just a matter of using the right tools.
Don't let the terrible feeling in the market prevent you from finding these opportunities.
Good investing,
Marc Chaikin
Editor's note: Marc just released a critical update that builds on his previous warning about the markets. It's packed full of details about the current environment, as well as where he believes things will head next. Plus, just for tuning in, you'll learn the names of one stock to buy and one stock to avoid today. Watch Marc's latest presentation right here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+1.10%
3
22
5
S&P 500
+1.46%
41
333
123
Nasdaq
+2.14%
12
56
31
Small Caps
+2.35%
283
1137
479
Bonds
-0.88%
Energy
+3.60%
1
20
0
— According to the Chaikin Power Bar, Large Cap stocks are more Bearish than Small Cap stocks. Major indexes are mixed.
* * * *
Top Movers
Gainers
MRNA
+8.05%
APA
+7.81%
KLAC
+7.22%
CCL
+6.75%
FCX
+6.72%
Losers
XEL
-2.01%
NI
-1.96%
CL
-1.92%
AON
-1.90%
OTIS
-1.64%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
No earnings reporting today.
Earnings Surprises
BYRN Byrna Technologies Inc.
Q2
$-0.05
Missed by $-0.04
HELE Helen of Troy Limited
Q1
$2.41
Beat by $0.55
WDFC WD-40 Company
Q3
$1.07
Missed by $-0.21
* * * *
Sector Tracker
Sector movement over the last 5 days
Discretionary
+6.45%
Communication
+4.99%
Information Technology
+4.48%
Financial
+2.23%
Health Care
+1.65%
Real Estate
+1.37%
Staples
+1.18%
Industrials
+1.11%
Materials
+0.19%
Utilities
-0.11%
Energy
-0.74%
* * * *
Industry Focus
Regional Banking Services
7
117
15
Over the past 6 months, the Regional Banking subsector (KRE) has underperformed the S&P 500 by -5.03%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #7 of 21 subsectors.
Indicative Stocks
TBK
Triumph Bancorp, Inc
FRC
First Republic Bank
CBU
Community Bank Syste
* * * *
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Any brokers mentioned constitute a partial list of available brokers and is for your information only. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors.
Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation.
This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.
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