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Happy Monday.
My friend Alex’s campaign for Ukranian families has raised $650,000 so 650 families will get a bit of financial help. You can make a difference here.
I will get right to this weeks Momentum Monday episode with Ivanhoff. You can watch/listen on YouTube right here. I have also embedded it right below on the blog:
Here is the quick and dirty in the markets…
Aluminum…oil…coal…wheat all continue to have all the positive momentum. It was the best week for commodtiies since 1974
Meanwhile, the bear market in technology continues to rage:
Europe has given back the pandemic gains and has an energy crisis:
If you want to build a list of the best performing, highest momentum energy and commodity stocks, the Stocktwits 25 lists has them here.
Charlie’s 7 chart Sunday is excellent.
Here is Ivanhoff’s take:
The market is flexible, adaptable to new conditions. Money always goes somewhere. While the main indexes continue to be under pressure, select sectors are thriving. Last week, the big winners were oil, coal, grains, metals, grocery stores, military stocks, railways. The losers were tech, consumer discretionary, Europe. In fact, most of the European indexes and ETFs made fresh 52-week lows on Friday.
For a brief moment last week, alternative energy stocks also perked up – solar, fuel cells, you name it. It only makes sense. If oil, gas, and coal are getting way more expensive, their alternative should be worth more. This is exactly what happened in 2007-mid2008 when oil went from $60 to $140 per barrel. ESG wasn’t even a thing at the time. It’ll be interesting to see if the same patterns repeat this time again. Most alt energy names are down more than 70% from their recent highs and still in a downtrend but I’ll be paying attention.
I don’t know how long the run in commodities will last but what I know is that eventually, it leads to further weakness in the general market. Most stocks keep making lower highs and lower lows in a declining market but shorting is not easy when volatility is elevated. In a headline-driven market, even a rumor can cause a quick short-term bounce that can stop you out before a stock continues lower. The cure is to be aware of the choppy nature of down-trending markets, be nimble, take frequent profits when you have them and use smaller positon size; be selectively active, and simplify things as much as possible.
The USD is romping as it generally does during a crisis and I continue to have a high cash position and wait the tech bear market out.
Morgan Housel had a great riff that I will include here:
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