Weekend Power Snapshots

April 20, 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.

The consolidation finally turned into more of a correction as OpEx week added some downside pressure once the slide began. The week started rough on Monday and continued to drip the rest of the week. Wednesday was the worst from a short term perspective, but as the week went on the low readings spread to the %>50sma measures even as the shorter measures started to improve a bit by close Friday.

The RSI picture pulled in a lot with this action showing the momentum moved back to oversold across most sectors. Oversold in an uptrend is worth keeping on our radar and the CFG and RSI combination gives a great gauge of how oversold each space is. Technology finally took the brunt of selling late this week. On these measures, Thursday showed the most oversold CFG readings helping feed some better action on Friday. I said better, not good.

Short-term breadth started improving Thursday and by Friday saw buying all around the market, just not in Tech, Industrials or Consumer Discretionary. These are all offensive sectors, so bulls hope this is just sellers taking out the generals near the end of the correction and not a new trend. Next week could give a little cleaner information now that OpEx is out of the way. Once the week started with a strong down day, I think the OpEx positioning exacerbated the selling all week, and may be why we didn’t get the normal oversold bounce yet. If this was a major downtrend, this type of cluster selling would be more understandable, but in an uptrend it is not as normal. It could mean the major uptrend is over, but I think it’s more likely OpEx shenanigans.

Now, what is a little different this time is what they bought when they came back in. Energy was expected, but Utilities, Consumer Staples, Real Estate and Financials all lean defensive, except maybe Financials. Even Telecom stood out, which is a defensive poster child. Even if it was more on the defensive side, the key is rotation is starting to kick in after price discovery looks to have found its level in the short term. This comes outside the 3 day window we usually expect, which is where I think OpEx played its role, but if buyers don’t show up with some vigor this week, something bigger is lurking that might not be in the narrative just yet.

Nice to see a few popping back up here even if it is in defensive sectors. We want rotation, and everyone eventually gets a turn. The message shows fear is rising now that we are back near potential breakout support in many spaces. Gauging these measures during any bounce we do get should help us with both general direction and how aggressive buyers are so we know whether or not to get involved yet.

This really cooled down by the end of the week, but mid week we saw readings that normally come at the beginning of a big downtrend or the end of a correction. We don’t really ever know until we look in the rear view mirror, but it would surprise us if it were the start of something bigger. It may last longer than many want, but we are just down 5% at this point and sentiment is souring quickly. If we hit 10%, it will likely be all out panic and probably the best opportunity we will get this year to beef up our portfolios… and no one will want to. 

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!

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As always, I hope this helps!