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Market review 22.04.10
Staying the course, Uranium, Jack Schwager
3 weeks ago, I wrote the post “time to be broadly bullish.” The S&P 500 hasn’t gained much since, but the picture remains generally constructive.
Many global indices retested multi-month breakouts this week. Here’s Australia shown below. It’s a similar picture on Canada, Norway, UK, and South Africa.
HYG:IEI Weekly. This duration-matched bond ratio measures risk-appetite. It hit support a month ago before beating the SPX to new highs. AUD:JPY is another risk-on measure and it hit new multi-year highs this week.
AAII Net Bulls. Retail has been very pessimistic all year. They did begin to dip their toes back into the market last week after SPX surged. But they’re rushing for the exits again after just a 2-3% market decline.
An area of concern is that defensive sectors (utilities, health care, staples) are breaking out to new highs while tech, financials, transports, and especially home builders are struggling. The broad market needs to show some strength ASAP.
Let’s look more at what’s working and that looks best here.
On the ETF leadership board, we see the uranium sector now showing strength.
And the price charts look fantastic.
URA Weekly. Breakout.
CCJ Weekly. The largest uranium producer made a breakout weeks ago and is now running.
GLO Weekly. Setting up for a breakout. It’s a similar picture on NXE and UEC.
This little sector has a lot of potential from here. URNM is already one of the strongest ETFs since the start of 2020 (link) - ahead of XLE, TAN, SLX, LIT, and even LAND.
Here are more charts that stand out.
PSA and COST, Weekly. Recent breakouts and excellent follow-through.
CWST Monthly. The cleanest uptrends over the past several years have ironically come from garbage removal stocks. Here’s Casella which has quietly produced a 45% CAGR over the past 5 years. See also WM and RSG.
LAND Weekly. Farmland has now almost doubled since becoming involved 6 months ago.
IPI Weekly. Fertilizer stocks are on fire. Intrepid gained another 30% this week, now up 3x in the past 11 weeks.
Oil & Gas stocks also keep grinding higher, despite crude oil prices dropping $30.
Meanwhile, rare earths, railroads, and tankers are groups that looked strong but then took a hit recently. Breakout trading isn’t always easy and so diversifying helps manage volatility (more on this at the end of the post).
Jack Schwager did this presentation many years ago. It’s full of important lessons so be sure to watch it when you have a chance.
Great traders have both a proven edge and proper risk management.
Many approaches work, but it’s key to find one that fits your personality.
Developing your trading strategy requires a ton of hard work, but applying it should be effortless! If there’s any effort, force, strain, struggling, or trying – it’s wrong!
Be objective. Know the reason why you’ll exit before you place a trade.
Amateurs are lured into markets thinking it’s an easy way to make money, and an initial lucky streak solidifies this complacency.
Finally, something to keep in mind in this volatile market:
That’s all for this week! If you found this post useful, please sign-up for the e-mail list if you haven’t already. Thanks for reading.
Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.