Important Weekly Update 44

 The VIX in uptrend and changing pictures for more Sectors this week!

Last week we noticed changes in trends, in the Consumer Cyclical Sector and Consumer Defensive Sector and Energy Sector. This week the bearish signals grew stronger in every Sector except in  the Communications Services Sector. That is the only Sector that is positive in all timeframes at the moment. It also renewed it´s Daily trend and the stocks are doing well here. In the Sven Connection Premium I will suggest a couple of Stocks that you can have a look at.

The Sector list have a lot of red Daily trends now. No less than eight Sectors are Red in Daily. The Financial Services Sector and Consumer Cyclical Sector are at 0. The worst performer this week is Energy Sector. As I discussed last week this is not a good sign for the Stock Market. Whatever happens in the election we still have a world in chaos and war. That creates doubt in the Markets. 

S&P 500

Weekly

This chart is well past it´s best before date. Since Covid it took 1,8 year before the correction from January to October 2022. The index went down -27%. Since the bottom in 2022 to today the rise has been going for 2,1 year. If we then look at the MA20 and MA50 of the S&P500 we can see that they are close to be broken to the downside. The MA20 already is and MA50 is support. It would not take much to break this and send the market lower. To buy now is not to prefer. Investors forget. Psychology works that way. Humans think the market will continue higher, especially when the talk goes on about the liquidity and rate cuts and the end of QT. QT is still 125B a month. The expectations of the pace in rate cuts are according to Bloomberg 125 basis points for 2025 to be compared with 175 a month ago. How much can the Stock Market withstand?

S&P500

Daily

VIX-X

CBOE Market Volatility Index

Daily

VIX is now at resistance where it has been several times before. It takes a trigger to go above that but we don´t know what that might be? I made changes this week in the portfolio. Taking profit and I will continue next week. The thing with Stocks right now is the algorithms and how certain stocks behave. Some stock shoot up like rockets and small investors pile in to try to catch some of the momentum, making short term gains. Like gambling. These folks do not know anything about Trend. Because there are lots of investors in the North American Stock Markets and lots of capital Stocks can make huge moves in a short timespan. However if the Markets crack down these investors will be stuck with losses.

Have we seen this before in History? Yes. And here we are at a new but different time with new and different set of conditions.

 

Article about the housing market and consumers: Housing and Economy

This was a lengthy update but I consider it important.

This week in Premium I will show some trades and update the Completed Trades section!

Changes will be made to the portfolio and we will disect the Sector Trends.

Also we will Trade! We will maybe do the highly risky Short Term Trend Trade! That is serious business, not a game.

Stay focused now, limit risk overall.

Best regards,

Trader Sven