Looking For A Modest Pullback

PUBLISHED Aug 20, 2022, 1:38:44 PM        SHARE

imgTom Hamilton

August 19, 2022 - I’ve been expecting to see a modest pullback from the recent market rally for a couple of weeks, the question was ‘When’ would it start. Well we got our answer late this week with what I think is that correction from an ‘overbought’ condition. The S&P 500 Index has touched the declining 200 day moving average and that could have ‘spooked’ investors as prices have gone up rather quickly from the late June low. Time for a pause to refresh.

This ebb and flow, back and forth of prices is to be expected especially when everyone is on “the same side of the boat”. So while this may cause some concern, it is really ‘normal’. Now, where will this go? I’m initially thinking around the 12093 level on the NASDAQ Composite Index; that would be a ‘natural’ place to stop. At that point we’ll have to see what volume has come in on down bars (selling), so far rather light, and what volume is coming in on up bars (buying). Also is there an appetite for risk? The small cap index (Russell 2000 / IWM) will give us an idea if folks are bailing out or seeing this as a buying opportunity.

This past week we’ve seen core and defensive sectors rise to the top and more aggressive sectors (technologies, pharma & biotech) fall off; less risk.

The Short Term Sector table shows this at www.special-risk.net

Let’s see how this pullback develops as next week unfolds. Many traders are on vacation in the Hamptons so volume is typically light which means it’s easier to move price, but price and volume remain as significant clues as to direction. I’m still thinking that the “low is in” for this trend swing in the market, but that does not preclude a correction somewhere in between now and the previous low.

Have a good week. ……….. Tom ……….. Price chart by MetaStock; table by www.HighGrowthStock.com. Used with permission.

Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
Where Are We In The Cycle?

A reminder about what empirical research tells us about business cycle phases and asset class returns.

Playing the housing backlog theme

While the economic outlook in Zimbabwe remains uncertain on the back of local and global headwinds, Piggy believes that the are indeed pockets of opportunity in certain sectors.

A golden opportunity

Piggy has noted with interest that the norm amongst most investors all over the world is that they tend to buy and hold gold during periods of uncertainty.

Form Gold Investment Clubs!

The Reserve Bank of Zimbabwe has now introduced gold coins to the market with a strategic intent of boosting savings and investments in the broader economy.

The Collaborative Economy

The collaborative or sharing economy is an emerging phenomenon that is shaping the cultural, economic and social landscape of the modern world.

Fed Minutes were Not as Dovish as Initially Read

The sell-off in European bonds continues today.

StockBossUp - State of Wealth Creation

Drafting on StockBossUp is ramping up. Here we will discuss how drafted teams are performing

Mercury General (MCY) Cuts Its Dividend

Another Dividend Champion lost its status two weeks ago. Mercury General (MCY), the insurance company, cut its dividend by 50% on August 2, 2022, after a 35-year streak.

Markets Look for Direction

The biggest development today in the capital markets is the jump in benchmark interest rates.

Market Musing 8-16-2022, Can the US Market's continue this 8 week upside rise?

Where do we go from here? The US Markets are rising on slowing inflation and the assumption that the Fed will slow down its aggressive rate hike cycle.



China Disappoints and Surprises with Rate Cut

Equities were mostly higher in the Asia Pacific region, though Chinese and Hong Kong markets eased, and South Korea and India were closed for national holidays.

The Top 3 Dividend Aristocrats Now

When it comes to finding ways to compound wealth over time, we believe the best way is to buy high-quality dividend stocks, reinvest dividends, and hold them for the long-term.

IRS Audits Explained

As an Investor, Make Sure You Know Your Tax Liability!

Will Meta Stock Go Up? Panic, or not to Panic, That is the Question

Will Meta stock go up? Many investors have become skeptical about the future of Meta Platforms due to the continuous loss of share price and advertisement revenue.

Due For A Pull Back

Stock Market Commentary

Opening a New Credit Card Helps Improve Credit Score

A ratio of less than 30 percent of credit to utilization is ideal.

Cisco Systems: Time To Buy

The bear market is making retail and professional investors nervous, but the market will not be down forever.

Heading into the Weekend, Dollar's Downside Momentum Stalls

The markets are putting the finishing touches on this week’s activity.

Insider Trading

One of Piggy’s favourite drama series is “Billions”. It is an American television drama series premiered on Showtime and has produced five complete seasons to date.

Resources for Publishers
Resources for New Investors

Boosted with BossCoin