Folks, the financial news is full of negativity these days... Most pundits are still calling for a recession or major wipeout.
The Power Gauge Is 'Very Bearish' on This Defensive Position
By Marc Chaikin, founder, Chaikin Analytics
Folks, the financial news is full of negativity these days...
Most pundits are still calling for a recession or major wipeout. Take a look...
But as regular Chaikin PowerFeed readers know, the technical details behind the market today are very different. And we're already seeing the beginnings of the next bull market.
Does that mean everything will be smooth sailing from here?
No way.
In fact, there's still a decent chance of an "earnings recession" ahead. And history tells us to expect multiple pullbacks as the market's next bull phase plays out.
But that doesn't mean you should shift completely to defense.
Now, I know that we've already covered this topic recently. However, the market is choppy right now. So it's darn important for you to remember. That's why I'm reiterating it today.
The Power Gauge confirms what I'm saying...
One of the most defensive positions of all now earns a "very bearish" rating from our system. Worse still, according to the Power Gauge, it's the worst-rated market sector today.
So the pundits are full of uncertainty. And you might be confused about what to do with your money.
But the Power Gauge is clear...
If you're investing in this defensive position right now, you're in for trouble.
The last time the setup was this perfect, renowned market expert Rick Rule made 1,000 times his money. Now, for the first time ever, he's stepping forward to show you how the setup today is potentially even more lucrative. Full details here.
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Folks, the defensive position we're talking about is the utilities sector.
The utilities sector is about as boring as it gets. And because of that, many investors see it as a "safe haven" for their money. That's true even if the data behind the idea is a little complicated.
Here's the important part for us...
The utilities sector is underperforming the market so far in 2023. Take a look...
Since the start of the year, the Utilities Select Sector SPDR Fund (XLU) has lost roughly 8%. And the broad market S&P 500 Index has gained around 4% over that span.
That's a major wipeout. And according to the Power Gauge, it's likely to get worse...
You see, XLU currently earns a "very bearish" rating from the Power Gauge. And beyond that, zero of the 30 rated stocks in the exchange-traded fund are rated "bullish" or better.
That means the Power Gauge isn't optimistic on any of these 30 stocks within XLU.
That's as clear as it gets...
Defensive plays like utilities are the wrong place to be looking right now. And although the Power Gauge is "neutral" on the S&P 500 as a whole, it's finding plenty of opportunities...
Four sectors and 12 subsectors currently earn a "bullish" or better rating. And within the S&P 500, 133 stocks are rated as "bullish" or better right now.
Put simply, even if the market is volatile... we can find plenty of opportunities.
So with that in mind, let's do our jobs as investors. Let's go out and find the best opportunities, no matter what's happening in the overall market.
To do that, I'll use the Power Gauge. After all, it's the culmination of my life's work.
But whatever tool you use, just make sure it's not telling you to bury your head in the sand.
Now, more than ever, that's exactly the wrong position to take in your investing approach.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.12%
7
17
6
S&P 500
+0.16%
133
262
104
Nasdaq
+0.50%
35
44
21
Small Caps
+0.04%
493
951
443
Bonds
+0.10%
Real Estate
+1.41%
2
12
16
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes are all bullish.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+3.46%
Utilities
+3.19%
Communication
+2.15%
Real Estate
+1.44%
Industrials
+0.99%
Staples
+0.88%
Energy
-0.43%
Health Care
-0.48%
Discretionary
-0.48%
Materials
-0.58%
Financial
-1.80%
* * * *
Industry Focus
Pharmaceuticals Services
4
30
7
Over the past 6 months, the Pharmaceuticals subsector (XPH) has underperformed the S&P 500 by -1.75%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #18 of 21 subsectors.
Indicative Stocks
TBPH
Theravance Biopharma
AXSM
Axsome Therapeutics,
ARVN
Arvinas, Inc.
* * * *
Top Movers
Gainers
ON
+5.59%
AMD
+3.97%
ANET
+3.87%
NVDA
+3.84%
DXC
+3.55%
Losers
NCLH
-4.26%
BF.B
-4.20%
REGN
-3.70%
CCL
-3.13%
VLO
-3.06%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
TTC
ULTA
ORCL, DOCU
BJ
GPS, MTN
No earnings reporting today.
Earnings Surprises
MDB MongoDB, Inc.
Q4
$0.23
Beat by $0.40
BF.B Brown-Forman Corporation
Q3
$0.21
Missed by $-0.27
CPB Campbell Soup Company
Q2
$0.80
Beat by $0.06
* * * *
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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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