Good Monday morning everyone.

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We have the worst inflation numbers since the early 1980’s but the S&P is at all-time highs. Microsoft, Apple and McDonald’s are carrying us higher for whatever reasons while ‘growth tech’ continues to get hammered. To further confuse me, Ford is at highs not seen since the horse and buggy were believed to be a better option than cars.

Consumer Staples hit 52 week highs last week because you know food and toilet paper are essential during inflation…

I will get right to this week’s episode of Momentum Monday. Ivanhoff an I do a wide tour of sectors and offer up some thoughts. You can watch/listen to this weeks episode here. I have embedded the video below:

Here are Ivanhoff’s thoughts:

The large caps are holding above their big gap from last Tuesday and acting relatively constructively. Both $QQQ and $SPY have consolidated near a potential pivot. Going above last week’s highs would be a buying signal. I would not trust those potential breakouts for anything more than a quick scalp because there is simply too much weakness among individual stocks.

In the meantime, the divergences continue. While defensive sectors like consumer staples (XLP), healthcare (XLV), and some semiconductors are perking up, small caps and many software/internet stocks are under pressure. The recipe to surviving in this tape (meaning limiting drawdowns and if possible, growing our accounts) is to trade smaller and be selectively active, only focus on the best setups, and be willing to play both sides of the market.

Howard here…

Shortsellers are having a day which means of course, the government is after them, because you know why have a market with any sellers…

Charlie’s 6 Chart Saturday was excellent as usual.

The FED is way behind the markets here because they have been politicized for decades so when inflation gets politicized enough they should act exactly at the wrong time.

Here is Stocktwits momentum 25 lists.

Have a great week everyone.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here. report