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Afternoon Note

Still Struggling

By Karina Hernandez, Senior Research Analyst
5/6/2022 1:20 PM

The market is off this morning’s lows, and it moved briefly into positive territory, but it remains unable to dig itself out of its hole. Dovish comments from Minneapolis Fed President Neel Kashkari helped cut some of the  losses after mentioning that he sees the Fed’s neutral rate at 2% and is confident the Fed will do what is needed to bring inflation down.

While stocks are down, the 10-year note continues its road higher and is up 2 basis points to 3.08%.

Only two sectors are in green territory with Energy leading. NRG Energy (NRG) is the top gainer in the S&P 500 after posting a big profit this morning.

S&P 500 Index



Communication Services XLC



Consumer Discretionary XLY



Consumer Staples XLP



Energy XLE



Financials XLF



Health Care XLV



Industrials XLI



Materials XLB



Real Estate XLRE



Technology XLK



Utilities XLU




Points to Resolve

Let’s look at this data from Sentiment Trader, which confirms the market is oversold and is getting closer to a bottom. Correlations go to 1 during panics (see chart). While we are not there yet, it is climbing quickly among tech stocks.

This is a bottoming process, and we should be prepared to score big.  

Have a great weekend and prayer for peace and the Ukrainians.

I'll go old school. May will be very disappointing/weak. Then we will have a summer rally. Then look out for the second leg of the bear market in the fall. Tune out the noise and do your homework.

Michael D Thomas on 5/6/2022 2:18:29 PM
Hey Charles,
Just a quick note to say thanks for sharing your knowledge, insight, and guests. I appreciate it!
Also, i see Narragansett, RI on your backdrops occasionally. Let us know when youíre in the area (westerly Ri).

Ssweeney on 5/6/2022 8:12:29 PM
I think the market is oversold and the Dow can climb back to 34,000 buying some DIA, SPY, & QQQ for the bounce or some June calls on these positions for a quick trade

christopher voccola on 5/7/2022 3:14:57 PM

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