I’m not going to pretend I understand war-time markets. Putin invades Ukraine and the US equities market goes up on massive intraday volatility ¯\_(ツ)_/¯.
Are we baking in a bottom on the assumption that Putin’s aggression will be short lived? Is this purely a short cover and a dead cat bounce? Regardless of why the market rebounded Thursday and Friday, it’s wise to consult the charts and consider nibbling long. Here is a daily of the SPY:
What I like about it:
- Finished two days in a row at High of Day after starting both days at the Low of Day
- Regained SMA300 and EMA9
What I don’t like about it:
- Thursday started as a lower low (Jan 24)
- SMA200 still not captured and will be an important inflection point
- Bullish MACD still not recorded
- RSI still below recent highs
Although these two days haven’t fully convinced me of a new bull trend, it was enough for me to put some cash to work. Here are my nibbles long from last week:
- 401k moved to 35% S&P500, 65% cash (from 100% cash)
- eTrade Brokerage added long VOO, UNH, COST. Sold SQQQ hedge.
- Webull added long MP (more), GDXJ (more). Sold SH hedge.
Clearly I didn’t do much and am looking for a little less volatility and a regain of SMA200 before considering more long side positions. Regardless of what happens in Russia, inflation is still the biggest overhang and threat to a sustained bull run. I’m not a fan of this market, but will stick to what the charts tell me and allocate accordingly. Even if the Fed slows interest rate hikes, something has to give and it’s likely going to be the consumer.
Protect your ASSets.