The Week’s Key Charts and Data
Hey There Income Hunters,
Don’t expect a pull back in volatility over the next two weeks.
The Ukraine invasion will keep the unpredictable moves in the markets going, including:
– Wild swings in commodity prices.
– Extreme volatility in interest rates especially with $100 billion-plus in Treasury bond supply this week (Tuesday, Wednesday and Thursday)
– A CPI report that will shed further light on the Fed’s rate hiking cycle that begins on March 16.
The Stage 4 Bear Market Forces Dominate Price Action
Technology, Consumer Discretionary and Financials are the top-3 most bearish sectors in the Power Income Trader inflation stage forecast for the next few months.
And, sure enough, they were the worst performers last week.
Today, we’ll look at the key charts and data to focus on for the upcoming week.
The Cyber Security Sector
This war in Ukraine will be going on for a while and could easily expand into a larger cyber war in the months ahead.
This will send significant money flows into the cyber security space.
One ETF to watch is the First Trust NASDAQ Cybersecurity ETF (Ticker: CIBR).
When looking for ETFs in certain sectors, always look at the holdings to see if they are heavily weighted to just a few individual companies and also to at volumes traded to ensure liquidity.
I like CIBR on both counts. Its holdings are balanced and well diversified and their assets under management and traded volumes are high (i.e. $5.8 billion AUM & $1.2 million ADV).
As you can see below the chart pattern is ideal …
The market broke out above the 50- and 200-day moving average on very high volume once the invasion commenced.
Prices pulled back last week and are retesting the moving averages, which is a healthy sign.
CIBR should hold around the $48 area and make a run at the highs up at $56 in the weeks ahead.
Sprott Physical Silver Trust (Ticker: PSLV)
Silver had an excellent week (+6.7%) in the face of a stronger dollar and weaker stock market.
My favorite silver play right now is PSLV because it is a closed –end fund that only invests in unencumbered and fully-allocated silver bars. This protects you from manipulations of unallocated futures.
You can even redeem the shares for the actual physical silver, which is held in reliable storage facilities.
In times of extreme financial stress and uncertainty, you are better off owning physical gold and silver. This is the safest way to not only protect your wealth but outperform financial assets in an inflationary environment such as the one we are today.
This is another safe asset that is in an ideal chart setup. On Friday PSLV broke above its downtrend after holding above the 50 DMA on above average volume.
iShares 20+ Maturity Treasury Bond ETF (Ticker TLT)
Treasury Bonds have been wildly volatile as the Russian invasion into Ukraine creates so much uncertainty around oil, wheat and many other commodities impacted by the invasion.
Inflation is high and could get higher just as the Treasury must sell $100bn+ billion bonds into the market this week.
This is a great time to short TLT into the supply. That kicks off on Tuesday with 3-years, then 10-years on Wednesday and 30-years on Thursday, the day of the CPI number.
As you can see in the chart below TLT is sitting under the 50 DMA, which presents a good resistance to sell TLT against heading into the supply.
Bring It Home
This week, I’ll continue to press the strategy that has delivered win after win ….
My Power Income Trader system has been focused on selling financials, tech and SPY against value -oriented stocks with strong balance sheets (and preferably dividend distributions that provide income).
I have been stacking gains above 100% for short-term trades and if you want to get real-time alerts on trades and have exclusive access to timely information and real time events call our Customer Care Team at 1-888-872-3301 to become a member of the PIT crew.
This is a time to capitalize on historically high volatility and a Fed that is easy to beat.
Live and Trade With Passion My Friend,
Griff