The Weekly Selection: 03/12/2023

Volume 029

Introduction

Loyal subscribers and new readers alike,

Welcome back to another volume of my weekly newsletter, where I combine market analysis with stock selection to bring together a short form Sunday read to prepare market enthusiasts for the week ahead.

Last week was looking great going in, until we saw turmoil in the banking sector with popular tech/vc bank Silicon Valley Bank ( SIVB 0.00%↑) failing on Thursday. This, combined with more hawkish comments from the fed really took us down past some key price levels, setting us up for an interesting scenario this week. With CPI on Tuesday, and now continued fear in banking over the weekend, I will be remaining extremely defensive, with only a couple stocks to watch and an SQQQ 0.00%↑ hedge to keep things level in the event of a market capitulation. While I’d like to remain hopeful as I have for some weeks now, Ive converted most of my positions to cash, and would rather be wrong here and miss a move to the upside rather than give back what has been generated YTD.

Ill include the SPY 0.00%↑ chart below, however I get the feeling price action will not be as strong of an indicator as we would like it to be in the upcoming days.

As it can be observed, we sliced through all 3 major MAs this week, really hammering in the bearish thesis moving forward.

Tip of the week

With the news on Thursday of the second largest bank failure in history, many speculators are anticipating a bank run this week, or are at least trying to force one. In these times, It’s best to stay nimble, and if an active portfolio is in play to pay attention to the key price action of the broad markets. IWM and SPY, which essentially makes up all businesses of importance from large to small cap got absolutely crushed, changing my personal tune from heavily exposed to almost all cash in a matter of a day. With binary economic events driving price in sporadic ways, protecting what has been made is of the utmost importance.

Past Performance

Not so great for individuals. The Majority of them began their break upward from last week, and gave all of it back in the last 2 sessions, taking the performance down significantly. ANET 0.00%↑ has been a standout after its latest report, and that is certainly noteworthy going forward.

Charts

Only a couple this week, with a note at the bottom about stock picking in uncertainty.

CDNS 0.00%↑ with a nice print on Friday, showing relative strength to the market. I like this one moving forward as it has a solid, straightforward setup, giving a tight stop at the previous ATH price level.

STM 0.00%↑ giving us some additional RS, making a consolidation on its moving averages.

PI 0.00%↑ has been itching to breakout with solid flat action since its last ER reports. Rev has slowed slightly, but still technically aligned.

Thats all for this week. Remember, when selecting individual stocks looking at a week like this upcoming, its significantly better to be on the sidelines watching yourself be wrong, than convince yourself otherwise and feel the true burn of expecting what’s to come, and getting torn up by the exact outcome you predicted. Don’t fight the trend!

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