Here’s the market observations for today
Markets should be wary of high inflation and the potential spread of new COVID variants in 2022 ~ Bank of America.
Apple stock continues to give a misleading picture of the index. It keeps going higher and optically, it looks good.
The Story: Covid Variant Omicron is not causing serious illness.
It’s driving sell-off in Vaccine stocks.
But this is good news for Home Away stocks. Hence, the news is leading to an oversold bounce in Airline stocks. But does this offer any buying opportunity in this sector? The answer is No because it looks like a relief rally. There is no evidence that the trend has reversed.
It’s not only Airlines but the entire travel group stocks (Cruises, Casinos, Car rental, Online booking services) are rallying today but again the whole pack is in a deep downtrend.
No Good news for Large-cap Growth stocks (along with Semiconductor): They continue to tumble on fear of tighter monetary policy as the US Fed fights inflation.
Growth stocks have become toxic and they are falling as if there is no tomorrow. Just see MTTR
One interesting observation: There is an oversold bounce happening in Chinese stocks be it Alibaba or Didi but again these stocks are in a deep downtrend. See Alibaba Chart
What will I do now?: Sell stocks on rallies, Ruthlessly cut losses wherever I can, and not add anything to a trading position
Trade Sheet:
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
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