Another week has come & gone, and markets have continued to venture into higher, uncharted territory.
Uncertainty around inflation, supply chain issues & COVID still exist, as well as growing concerns about the state of debt markets internationally.
Yet the markets have managed to shrug most of it off, as they continue to climb higher.
Energy, Russia & Bearish Emerging Market ETFs Are Leading The Pack
Of the recent top performers, the most bullish names at the moment are focused around the energy space, as well as Russia.
ETFs that are focused on bearish sentiment in China & emerging markets are also performing well, as the supply chain & inflation troubles will hit these areas especially hard, leading to potential unrest.
While other traditional industries such as technology, cloud computing & cyber security continue to do well, these names should be interesting to watch for traders in the near-term.
With so much potential volatility based on general market uncertainties of the last few weeks, there should be some profit opportunities in the names above, as well as their peers.
Cannabis, Online & In-Store Retail, Clean Energy & Airline ETFs Are Lagging The Rest Of The Market
Some of the laggards may become buying opportunities in the near-term, whether via individual stocks or ETFs.
Cannabis ETFs are performing poorly at the moment, as shown below by TOKE, which is struggling to gather momentum on low volume, despite a recent bullish MACD crossover.
I don’t know that it’s wise to count these names out just yet though, due to volatility in the space that is produced by laws & regulations, as well as the fact that they are a vice which has steady demand by the users of their products.
Both in-store & international online retailer names are also struggling to make any consistent gains, mostly due to supply chain issues & inflation fears, as consumers are less confident in spending.
These names may perform better in time for the holidays though, with Christmas 2 months & a day away this could be a time to shop for hidden value as an end of the year gift.
Given that we don’t know if there will be another type of lockdown this winter, it makes sense that in-store purchases will likely go down, especially when coupled with the fact that many stores are facing a shortage of goods & supplies.
These names are also floating around on very low average volume currently while downtrending.
Clean Energy is also not performing as well as you may think, given the talks of green power in the news.
This would make sense though, as more & more people are beginning to realize that while it is a noble idea, implementing it at scale will be rather challenging, and will not remove our reliance on “dirty energy” entirely.
PBW above looks set to continue downtrending, with momentum to come from an impending bearish MACD crossover – get your options contracts ready!
Lastly, I don’t think it comes as a surprise to anyone that the airlines are currently a shaky investment.
With uncertainty about COVID-restrictions, fuel prices & holiday travel demand this year, JETS looks to still have more room to fall.
Watch their 10 & 50 Day Moving-Averages this week, as additional downward pressure & momentum may come out when they cross bearishly in a couple of days.
Tying It All Together
It’s no surprise that there is currently a lot of noise impacting markets.
Given the broad nature of what headlines we are seeing in the news each day, it may be best to pick one area to focus on in the near-term & research into the inputs that drive their price.
From there, once you’re comfortable with it, begin to also strengthen your positioning by trading those areas & industries as well, as it will improve profits while also keeping you focused on what will be moving the prices of the names that you are already in.
*** I DO NOT OWN SHARES OR OPTIONS RELATED TO ANY OF THE NAMES MENTIONED ABOVE AS OF WRITING THIS ARTICLE ***