Weekend Power Snapshots

April 13, 2024

Let's Start Here

Weekend Power Snapshots compile the daily snapshots to show how the week progressed. It will be part of the elite memberships and sent out each weekend. These quickly show where each segment stands on the long, intermediate and short-term views from breadth and momentum perspectives each day of the week.

It’s almost like we flipped the script this week. The markets started out decent, maybe a little tepid compared to recent weeks, then took the hits in the second half of the week. We had been seeing early week weakness and late strength through the majority of March while the markets moved mostly sideways on the bigger view. The selling hit hard Friday after a choppy week that took a minute to show its hand. Under 20% of stocks above the 20sma is the line we look for as starting to get oversold short term. It’s not when we cross below that counts; the signal comes when we move back out of that zone. As the shortest measure, you can see many subsectors have already gotten in the low single digits, which was pretty quick, but these were also the subsectors that were already lagging. This action gives sellers control going into next week until buyers prove otherwise. It takes a bit more to push whole sectors and the Universe itself below 20%, so when we get down here, especially in an uptrend, we take note and start to look for short term reversals to gauge the level of interest from both sides after seeing oversold for the first time in a while.

By the end of the week the bulk of the sheet had come off Nitrous and fallen below The Number. The recent leaders are still holding on to strong RSI trends, but even those took hits Friday. On the other side though, Consumer spaces both cyclical and non-cyclical have been taking the biggest hits here. Also, Aerospace & Defense is a rare occurrence where you get a negative CFG in an RSI bull range and still be on Nitrous. That will change with any more weakness, but this is one I would look for buyers to make an attempt here soon and if they can reverse RSI before it loses 40, it should give a decent entry with a tight out if it fails. Not just that one, I would be looking at oversold CFGs with RSI still above 40 to put on the list to watch first.

The week ended with a clear message that bears have finally seized control for the short term. Wednesday was bad, the bounce attempt Thursday didn’t really show well as sellers still were working behind the scenes, and Friday was a clear break on many charts and breadth measures. Now we look for the extremes that we started to see today. Lows are there, MA breadth has a little more room, but getting there. If we do get there, Breadth Thrust should go along with it, seeing some red (35 and under) there is where things are stretched about as far as they can in the shortest time frame. There is a good bit in Consumer Discretionary already there this weekend. Apparel & Luxury Goods and Diversified Consumer Services are showing that stretch now. Reflexivity is a real thing, and with a good trading plan and discipline to execute it, these can be very profitable.

After the shot across the bow last Thursday, we had some caution flags up, but the week started trying to work through it, then Wednesday hit again, and we had the first bigger cracks across other breadth measures. Thursday was benign and then Friday hit hard. Friday was the first 90% down day we have seen in a long time. Many will call out 90% Decliners or 90% down volume, but I learned decades ago that you need both. 80% and 90% days require both Adv/Dec percentage and Volume percentage to make the market to count. They are rare, but usually provide a bounce to gauge investor interest with 1-3 trading days. The bounce is where most of the best information often comes from.

By the end of the week they had gotten to all spots, even Energy and Materials couldn’t muster any buying on Friday.

This is the most new lows we have seen hit since the fall. The sheet grew throughout the week and for the first time this year, didn’t disappear quickly after a day or two at the most.  We are up to 3 days now, so take that in context, but fear set in as the week ended. Markets getting a bit wobbly after a strong run, Inflation rhetoric getting a good bit louder this week, and then warning Friday of a major conflict over the weekend. This news cycle added to the pressure, especially Friday. I would expect if we don’t get conflict, or maybe even if we do, the buyers will make a stand sometime early week and then we will see if they are ready to go again after a few weeks of rest, or if there is more backfill needed for them to get traction again.

A quick review should help you find where money is flowing and get to your fishing lanes for the day a little faster. To dive deeper into any particular space, just go back up top to the menu, you can get to any sector or subsector from there!

This information is for educational purposes only and is not a recommendation.  Please see the full disclosure in the footer.

As always, I hope this helps!