Despite that, many investors are still seeking shelter from the storm. They haven't forgotten the staggering losses and financial hardships. And they think the next storm is approaching.
Now, don't get me wrong...
I still expect to see a lot of volatility this year. In fact, history shows that the market is likely to endure more pullbacks on the way to higher levels in the coming months.
So I understand the urge to take shelter. But there's a big problem with that right now...
You see, investors tend to use two market sectors in particular as a volatility shield. And today, these sectors both earn a "bearish" rating from the Power Gauge.
That means investors looking to protect themselves could be making a huge mistake. Folks who turn to these sectors could wind up with even more losses in the weeks ahead.
But fortunately, investors can avoid falling into this trap...
Last week, while most investors panicked over the Fed's latest rate hike... and the big swing that followed... a new financial crisis had quietly taken hold of the U.S. stock market. And if you're following the usual crisis playbook... staying on the sidelines... or hoarding cash... your money is more at risk than at any other time in recent history. But there's a dead-simple way to take advantage of what's coming, instead of being blindsided. Click here for this major story. (Includes two stocks to SELL immediately.)
The man who called the 2008 crash reveals a financial fraud that could be BIGGER than FTX and Bernie Madoff combined... and could soon impact millions of Americans. Click here for details.
Now, if you're reading this essay, you likely know that the Power Gauge is our stock-rating system. It's based on my many decades of market experience with institutional insiders.
The Power Gauge starts with 20 key factors that these Wall Street titans use to find winning investments. Then, it bundles these factors into a quantitative system for investors.
That might sound like a lot – because, well, it is. Identifying the best proprietary weightings behind each factor took years of fine-tuning. But now, it's helping everyday folks succeed.
Fortunately, interpreting the system is easy...
Each of these 20 factors receives a rating that ranges from "bearish" to "bullish." And then, every stock receives a distinct overall grade that also ranges from "bearish" to "bullish."
So at a glance, you can see the rating that each stock has earned from the Power Gauge.
With those ratings, we can also analyze many exchange-traded funds ("ETFs"). Among other things, these ETFs cover market sectors like financials, health care, and real estate.
Knowing all of that, we can get back to the topic at hand...
You see, investors consider two sectors in particular – consumer staples and utilities – to be "defensive plays." Folks often turn to these sectors as protection during volatile times.
But today, the Power Gauge is steering us away from consumer staples and utilities. The main tracking ETFs for these sectors rank as "bearish" and "very bearish," respectively.
That means investors who turn to these sectors could be making a costly mistake.
My point is simple...
You don't want to focus your attention on these classic defensive plays right now. In fact, according to the Power Gauge, almost any other sector would be a better bet.
Despite that, I know countless investors will cling to these two "bearish" investments much longer than they should. And in turn, they'll likely suffer further declines from here.
Avoid that mistake.
Instead, do what I do and listen to the Power Gauge. When it says consumer staples and utilities are both "bearish" or worse, I pay attention.
And you should, too.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.25%
9
19
2
S&P 500
-0.24%
177
263
59
Nasdaq
-0.71%
39
47
14
Small Caps
+0.26%
557
1018
319
Bonds
+0.78%
Consumer Staples
+1.29%
3
23
7
— According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish.. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Discretionary
+1.63%
Utilities
+1.14%
Staples
+0.97%
Industrials
+0.87%
Communication
+0.71%
Financial
-0.27%
Health Care
-0.38%
Information Technology
-0.40%
Materials
-0.89%
Real Estate
-1.27%
Energy
-6.33%
* * * *
Industry Focus
Biotech Services
56
85
12
Over the past 6 months, the Biotech subsector (XBI) has outperformed the S&P 500 by +1.45%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors and has moved up 4 slots over the past week.
Top Stocks
REGN
Regeneron Pharmaceut
VIR
Vir Biotechnology, I
EXEL
Exelixis, Inc.
* * * *
Top Movers
Gainers
DE
+7.53%
BIO
+6.02%
OGN
+4.62%
GEHC
+3.19%
TSLA
+3.10%
Losers
ALB
-9.67%
HES
-5.73%
HAL
-5.39%
EOG
-5.37%
BKR
-5.18%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
IR
KEYS
MDT, PEG, TAP, WMT
CZR, FANG, O, PSA
SBAC
No earnings reporting today.
Earnings Surprises
DE Deere & Company
Q1
$6.55
Beat by $1.08
PPL PPL Corporation
Q4
$0.28
Missed by $-0.01
CNP CenterPoint Energy, Inc.
Q4
$0.28
Missed by $-0.01
* * * *
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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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