MY JOURNAL FOR FRIDAY – DECEMBER 23, 2022
NEWS, BREAKOUTS, MOMENTUM PLAYS & BOTTOMS
The Canadian Technician
A Chilly Ending
Greg Schnell | December 23, 2022 at 07:45 PM
The stock market has always come up with ways for challenging investors. What seems to be so obvious rarely works out, and what seems to be irrelevant, surprises you months later with a chart from the bottom left to the top right.
The Nasdaq is now the qadsaN index as it spent the year going backward. All the mega cap names were sold off.
The Mega caps
The electric bears have been taking a swipe at the electric car business for a while, but they picked up voltage, swiping 68% off Tesla. They have taken a lot more percentage from other EV names, but Tesla was by far the largest market cap value change. A year ago, we couldn’t get Tesla bulls off the podium. Meta and Alphabet got shellacked along with the rest of the communications businesses. Amazon dropped 50% after maintaining a big price/earnings ratio for years. Microsoft and Apple, also dropped meaningfully. I am not sure anyone expected the extent of the selling in the special six.
What was bullish?
One of the things I am surprised about is how is the Nasdaq only down 30% if the juggernauts were down so much? There are actually 25 – Nasdaq 100 stocks positive on the year! I know that surprised me.
So the rotation under the surface has been massive. All those long term portfolio strategies would be interesting to review. Were they able to adjust for the selling in the large caps? Or too stubborn to change? This is one area where technical trading should outperform. We can all win in bull markets. It’s the bear markets that are hard.
I think the ARKK chart set a record for an ETF this year. It had an SCTR ranking below 10% for the whole year. Most of the year it was the worst 1%. It still attracted capital inflows. That is remarkable story telling. Yes, I never want to short innovation. But it should be priced right before I invest in it.
For me, just a few weeks ago I published an article about the oil stocks breaking down. There is a reason we look at the charts every week. When things change we need to change as well. I will be discussing that area of the market in my weekend newsletter and you can see everything we do at Osprey Strategic for just $7 for the first month.
Wishing you a wonderful holiday season and a successful 2023!
Welcome to Osprey Strategic
Nearly a Decade of Experience in the Financial Markets
Greg Schnell, CMT, MFTA, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and recent winner of the CSTA’s Technical Analyst of the Year. He is an active member of both the CMT Association and the International Federation of Technical Analysts.
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BREAKOUTS, MOMENTUM PLAYS, & BOTTOMS
CET.TO – Cathedral Energy Services Ltd.
CS.TO – Capstone Copper Corp
CVE.TO – Cenovus Energy Inc.
ELD.TO – Eldorado Gold Corp.
MFC.TO – Manulife Financial Corp.
OLA.TO – Orla Mining Ltd.
PEY.TO – Peyto Exploration & Development Corp.
PSK.TO – PrairieSky Royalty Ltd.
SDE.TO – Spartan Delta Corp.
MOMENTUM ALERT SIGNALS
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The market has had a strong start to 2023 and numerous indicators have broken out above bear market levels. Greg walks through some of those charts that he shares with clients. The PLUMB system created …
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