The Shakedown 4-10-22

LAST WEEK, S&P 500 (-1.18%)

Monday:  +0.86%

Tuesday: -1.26%

Wednesday: -1.00%

Thursday: +0.50%

Friday: -0.27%

The Tale of Two Markets

Last week saw a chop fest that really proved you need to be laser focused on which sectors are exhibiting relative strength and which are showing weakness. The soaring inflation and interest rates wreaked havoc in the growth stocks and most areas of tech last week as they plunged into the close Friday. The selling in growth stocks proves they are still not the place to be. Tech stocks closed 1.76% lower Friday. However, we're still seeing great action in value-land, notable energy stocks, financials, materials, metals, scattered retailers and other cyclical stocks as we'll see below. Energy and financials closed up 2.76% and 1.01% respectively Friday. I believe we will continue to see this type of rotation this week.

I'll be looking to take trades in both directions this week as I believe the QQQ shows early weakness with the action we saw Thursday/Friday. The focus on relative strength cannot be emphasized enough.

We have earnings season kicking off with the banks beginning to release their first quarter earnings in the latter half of the week. Earnings season means we should be ready for a ton of action in a few weeks when the bigger companies begin to report. 

Earnings This Week

EQR Long

EQR is a REIT which we've seen great relative strength in as a whole. I know, I know -- a REIT as trade of the week? Not my favorite sector to trade either, but right now you're only getting paid if you're buying the strong sectors and selling the weak ones. I think the market will feel some pressure early in the week and we'll see safe havens like REITs and Utilities move higher. Looking for an entry through 93 resistance.

Trigger: 93

Stop: 89.89

Target: 99+

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