Welcome back to your weekly market checkup!
I hope you had a great week!
ICYMI, you can see the latest Top Pick of the Week here →
Top Pick of the Week: When Fundamentals Meet Momentum
There’s a difference between finding a company I want to own and finding the right time to pay attention to its stock.
A quick highlight from last week →
Meta Platforms, Inc. META 0.00%↑ printed a doji bar on Thursday and hit an extreme-high RSI reading! This usually signals a top is in and a reversal may be underway.
META was one of our Top Picks of the Week back in May. If this was a swing trade for you, you could close the trade. If this is a position trade, you could lock in some profits and leave the rest to run to its fair value target!
META is still trading undervalued here. Remember to not cut your winners short! Lock in profits, but let your winners run. Congratulations to you in the META / FBL trade!!
Let’s dig into last week’s market recap and the playbook for the week ahead →
The Fed Hiked. The Market Split.
The Fed raised rates. The Nasdaq finished green. The Dow struggled.
So much for a simple market reaction. 😂
Last week, Oil USO 0.00%↑ dominated.
This week, growth stocks ARKK 0.00%↑ bounced, Health Care XLV 0.00%↑ went from worst to first, and rate-sensitive industries remained weak.
The headline was the rate hike. The story was what investors bought—and what they avoided.
Let’s follow the money. 👑
I. The Market Vitals
The Fed Delivered. What Did the Market Do?
The research I’m reviewing reports that the Federal Reserve raised interest rates by a quarter point to 3.75%–4.00%, with projections suggesting another hike before year-end.
Remember last week’s question?
Buy the rumor, sell the news—or sell the rumor, buy the news?
The hike was widely expected. Stocks initially struggled after the announcement, then rebounded, but the recovery wasn’t broad.
Bitcoin (BTC) led. The Nasdaq QQQ 0.00%↑ finished positive. The S&P 500 SPY 0.00%↑ was nearly flat, and The Dow Jones DIA 0.00%↑ lagged.
The charts explain the difference.
QQQ: Closed at $721.45, above its 5-day EMA, 10-day EMA, 20-day SMA and 200-day SMA. RSI is near 56, and the MACD histogram has turned slightly positive.
It’s moving sideways near recent highs, with buyers showing renewed interest.
SPY: Closed at $761.69, above its 5-day and 10-day EMAs but below its 20-day SMA at $762.50. Momentum remains weak.
It’s attempting to stabilize, but there’s still resistance overhead.
Both closed above my 5-day EMA. That’s my initial buying trigger when price is in an accumulation zone, not an automatic buy signal for every stock.
Rates, Oil, & Gold
The supplied research reports that the 20-year Treasury TLT 0.00%↑ yield reached 5%, putting pressure on borrowing costs.
TLT gained 0.47%, but its chart needs to establish whether that rebound can last.
USO slipped 0.70% after last week’s surge. Its one-month gain remains +17.73%, so I’m not calling the energy move finished.
Gold GLD 0.00%↑ gained 0.60%, while BTC jumped 4.70%.
The lesson: One week’s performance doesn’t tell the whole story. I want to know where price sits within the larger trend.
Here’s how the 7 major asset classes ranked this week:
Oil USO 0.00%↑
Bitcoin ($BTCUSD)
The Nasdaq-100 QQQ 0.00%↑
The S&P 500 SPY 0.00%↑
Gold GLD 0.00%↑
20 Year Bonds Treasury ETF TLT 0.00%↑
The Dow Jones 30 DIA 0.00%↑
♥️ Market Pulse: 4/7
4/7 assets are up.
SPY, USO, DIA are down.
BTC, QQQ, GLD, TLT are up.
II. Section Rotation: Health Care Won the Week,But Look At The Chart.
Only Health Care XLV 0.00%↑ and Technology XLK 0.00%↑ finished positive.
XLV gained 1.83%, moving from last week’s weakest sector to this week’s strongest, but its chart tells a more cautious story.
XLV closed at $168.39, barely above its 5-day and 10-day EMAs, but below its 20-day SMA at $170.29. RSI is near 50, and momentum remains weak.
I’m watching for a move back above the 20-day SMA. Until then, it’s a recovering sector, not a confirmed breakout.
I’m watching the XLV for a triple leveraged trade in CURE, along with watching the IBB for another triple leveraged trade in PILL.
Technology’s strength looks more interesting when we examine its industries.
At the other end of the board, Utilities XLU 0.00%↑ , Financials XLF 0.00%↑ , and Real Estate XLRE 0.00%↑ lagged.
This wasn’t a broad move into defensive stocks. Investors were selective.
III. Important Secondary Assets & Sectors
Growth Rebounded. Semiconductors Are Getting Interesting.
ARKK led with a 5.56% gain, followed by Software IGV 0.00%↑ and Semiconductors SOXX 0.00%↑ , but their charts aren’t identical.
ARKK: Closed at $88.23, above all four moving averages. RSI is above 60, and price is approaching resistance near $89. I’m watching whether it clears that area or stalls.
SOXX: Gained 2.69% Friday, closing at $533.07 above all four moving averages. Its MACD histogram turned positive, and money flow improved.
That’s a meaningful recovery, but SOXX still needs to clear its recent trading range around $550–$560 before I’d call it a breakout.
Meanwhile, Regional Banks KRE 0.00%↑ , Homebuilders XHB 0.00%↑ , and Small Caps IWM 0.00%↑ remained weak.
KRE: Closed at $72.75, below its 5-day EMA, 10-day EMA and 20-day SMA. RSI is near 38.
It hasn’t met my entry trigger. I’m waiting for price to stabilize and close back above the 5-day EMA within a developing accumulation zone.
Performance tells me where money has been. The chart tells me whether the setup is ready.
IV. Where I'm Looking Next
From Industry Strength to Individual Stocks
My process stays the same: