After starting 2022 with three straight weekly declines, this week’s trading session was the beneficiary of month-end rebalancing activity, first-of-the-month inflows, and better-than-expected earnings reports from many reporting US companies. Stabilizing price action, however, did not provide clear evidence of the resurgence of an equity “Go” trend. The market remains guilty until proven innocent from the intermediate-term perspective.
Welcome to your weekend edition of Launch Conditions from GoNoGo Research. This week we are looking not just at the trading activity for the week ending February 4, 2022, but also the long-term perspective of the primary trend with a look at monthly charts from January’s close on Monday. The chart packs below will provide perspective on the trends across asset classes and global markets. Take time each week to review the bigger picture of the markets to help you better execute your trading plan day to day:
The consumer discretionary sector retraced a good portion of its downslide on Monday, but the energy and financials sectors led the market as each of the major US indices rose more than 1% this week.
Oil surged on Thursday and Friday and the price of U.S. crude climbed above $92 per barrel—the highest level in nearly eight years. The price was up 23% for the year, building on 2021′s gain of more than 50%.
Rotation to cyclical and defensive sectors remains intact as rates continue to rise on Friday’s strong jobs report. Treasury yields pushed higher amid the inflation pressures and expectations for the Fed to hike rates. The 2-yr yield rose 15 basis points to 1.32%, and the 10-yr yield rose 15 basis points to 1.93% —the highest level since December 2019, prior to the start of the pandemic.
And remember, when in doubt, zoom out!
GoNoGo Launch Conditions Monthly 020522 For a better understanding of GoNoGo Charts, watch some of the recent market commentary and webinar sessions for FREE educational insights here:
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