Weekly Market Report - 5/1/22

It's the end of the world as we know it

War, inflation, rate hikes, supply chain constraints, China lockdowns and the pandemic--this was an ugly week, no way around it. With Amazon, Microsoft, and Apple reporting earnings, all sectors closed lower. SPY continued to close below the 50 and 200 day, exponential moving averages and a "death-cross" seems imminent (a death-cross is when the 50 EMA green line moves below the 200 EMA red line). Consumer Discretionary, Real Estate, and Utilities were the worst hit. ARKK is now down over -60% for the year. GLD was down almost -2%, and SLV was down over -5%. Natural Gas and Oil were both up +10% and +1% respectively. While XHB (Homebuilders) declined, Home Depot and Lowes were able to eek out a small <1% gain each. Did anyone notice that Sherwin Williams and BABA climbed over +12% this week?

The VIX continues to trade north of 30, making long puts expensive, and short premium selling strategies favorable.

The US dollar continued to rise this week almost +2%, although on Friday, strength in the Euro and GBP were starting to show as the dollar started to weaken. See a bearish Dollar trade idea in our Hot Trades Section of this newsletter.

Trading around 38,000, BTC is down almost -3%, and ETH is below 2,800. BTC has a .61 correlation with the Nasdaq (QQQ) over the past 3 months, and is getting higher (to .71) over the past 10 days.(correlation source: The Trade Risk and Macroaxis).

While this week was incredibly red, there was notable market outperformance from MSFT, FB, V and PFE.

source: finviz