Market review 22.04.24

They came for (almost) everything

What an ugly week.

I had been cautious this year until 5 weeks ago, I turned bullish. The broad indices held for a while and even the leaders (commodity stocks) kept working. That is until this week where everything got hit. Broad indices, leaders and laggards are all breaking down.

Broad Market

The list of ETFs hitting 52-week lows has piled up:

Canada and Australia were looking very promising - both broke down.

Commodities

For the past year, materials/oil/uranium/agriculture have been the leaders. But they got hit especially hard this week.

Perhaps REMX was precursor when it broke down a few weeks ago:

XAU Weekly. Gold miners with an ugly failed breakout.

Uranium took big losses this week with the URNM ETF down 15%. UEC was one of the hardest hit names:

Similar sharp reversals in the high-flying fertilizer stocks, and a (smaller) hit on oil stocks as well.

Tech

BLOK, XBI and others are breaking down. Though this is not surprising given the strong downtrends that have been in place.

What’s working?

RINF Weekly. While commodity stocks took a hit, inflation expectations continued their climb this week (so too did the 10yr Treasury yield).

USDX, Monthly. The US dollar has been rallying over the past year and now breaking out of a large base.

But how can this be if inflation is ripping?

Remember, USDX is the US Dollar relative to a basket of other currencies - mainly EUR and JPY (both of which have been very weak). The Yen is falling especially hard as the BoJ is still forcing interest rates low while the rest of the world has started rate hikes.

XMR Weekly. Monero (a privacy-focused coin launched in the earlier days of crypto) has been quietly climbing throughout the market carnage. Last month, it confirmed a false breakdown.

And the monthly chart looks fantastic:

Whether this strength is just spurious or a precursor for Bitcoin remains to be seen.

Closing notes

It’s an ugly market out there. Yes, sentiment is in the dumps, but price action is king. The best thing to do in this environment is to keep positions very small and do little.

I also have some personal news: My fiance and I are expecting our first baby in October! We need to do some apartment renovations and moving over the next several months. Given the market and my personal life, I will likely cut back on blogging.

Stay safe and be patient. Protect your mental & financial capital. The opportunities will present themselves again with time.

Twitter: @alphacharts.

---

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.