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Taking Profits While The Market Tanks

ByMichele Schneider
Published 02/13/2022, 03:41 AM
Updated 07/09/2023, 06:31 AM

Both the S&P 500 (SPY) and the NASDAQ 100 (QQQ) failed to clear key resistance areas this past week.

Additionally, the CPI reported that inflation is yet again on the rise sitting over 7% on a year-over-year basis and now talks of the war continue to heat up.

None of this makes a happy market.

With that said, we’ve been able to navigate and take profit targets in three of our positions this past week.

Three symbols we’ve taken profits in are Invesco DB Agriculture Fund (NYSE:DBA), Global X MSCI Greece ETF (NYSE:GREK), and SPDR® Gold Shares (NYSE:GLD).

With rate hikes set to increase, and after such a large runup in 2021, the market has begun to trade in ranges rather than picking an upward or downward trend. This can make very choppy price action and leads to the stagflation type of environment we have been talking about.

Though most of the time we have focused on technical analysis, many of our trades have an underlying fundamental reason behind them.

Both GLD and DBA can help give protection against inflation and even talks of war to some extent. On the other hand, GREK has been able to avoid much of the U.S. markets' volatility recently and was able to set up and trend higher.

IWM-DIA-SPY-QQQ Charts

Looking back towards a rangebound trading style, the above chart shows current ranges we are watching within the major indices.

Looking for support near the lows and resistance near the highs is our focus as the market doesn’t seem to want to fully break down or have enough strength to breakout towards highs.

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Moreover, this gives us a sense of how to trade the equities market with a focus on commodities as potential outliers.

ETF Summary

  • S&P 500 (SPY) Either needs to clear back over 200-DMA around 444, or could break to lower of range.
  • Russell 2000 (IWM) Flirting with the 10-DMA at 201.54.
  • Dow (DIA) 337.90 support area.
  • NASDAQ (QQQ) 338 support area.
  • KRE (Regional Banks) 72.52 support area.
  • SMH (Semiconductors) 249.46 main support area.
  • IYT (Transportation) Needs to get back over 257.89 and hold.
  • IBB (Biotechnology) 129.09 support.
  • XRT) (Retail) 83.14 resistance area.
  • Junk Bonds (JNK) Needs to find support.
  • SLV (Silver) 21.13 the 50-DMA support.
  • USO (US Oil Fund) 63.81 support.
  • TLT (iShares 20+ Year Bonds) Needs to clear 10-DMA t 139.66 next.
  • DBA (Agriculture) 20.39 support.

Latest comments

PPI, a look at input costs (+9.2%) on last read and productivity (+6.6%) last read minus CPI leaves us with a 2% pricing gap (corporate earnings) will have to come down or prices must go up. Another good jump in productivity may be a glimmer of light at the end of the tunnel. I won't be surprised if the Fed raises more than 50 bips, lending to my front loading theory. Traders market.
dont believe these cpi have big meaning they are eratic at best and offcourse people going to leverage there pay during the peek of the pandemic i would do the same. there is shuffle going to household names its easier for them passthrough costs so dj is a big buy. tech is weak do.
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