Concerns Continue February 13, 2022
Posted by Tom in Thoughts.Tags: market analysis, market commentary, stock market commentary, technical analysis
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February 11, 2022 – This market is pretty much “over” Covid, concerns linger about inflation and rising interest rates, but the hot topic next week (or more) will likely be Ukraine. A quick thought dump:
- Hedging is at a 22 year high (i.e. buying of Put options)
- Evaluations of stocks remain high (P/E metric, revenue to growth, etc.)
- The spread between Junk and Treasury bonds are increasing (risk off for bonds)
- Rising interest rates into a slowing economy (major caution sign)
So these are a few topics that raise the hair on the back of Wall Street’s neck (so to speak). The path forward is unclear and that’s what concerns investors. A time for caution particularly if you’re buying securities. I’m a fan of “scaling in” to any position. You don’t have to jump in with both feet even if you’re 100% sure / optimistic about it. Be selective. To use a phrase “We’re closer to the top than to the bottom”.

It looks like 14532 is resistance and 13097 / 1300 is support. That’s about where the trading range box is right now. Investors that were counting on a ‘V’ shaped bottom will likely be disappointed. A double bottom (or worse) looks like a possibility.
The Short Term Sector Strength table is shown below –
That’s about it for now. I’m lightly in some Energy and Bank sectors. I’m waiting for more signs of leadership before entering in a bigger way. BTW, if you hold bonds or interest rate sensitive securities, it may be a good time to re-evaluate them . . . interest rates are making a major turn as signaled by the Federal Reserve.
Have a good week and be careful. ………….. Tom ………….
Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.
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