Concerns Continue

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. Sometimes it's tough to be patient. :) ......... Tom ...........

*more discussion at - www.special-risk.net *

I/we have a position in an asset mentioned