I believe for the first time she's on taking stock, someone I've wanted to interview for a very long time, Katie Stockton, founder and managing partner at Fair Lead Strategies.
Welcome to the broadcast.
Great to see you here today.
Good to be here on the floor.
What do you make of a cooler than expected CPI print yesterday?
Cooler than expected wholesale PPI numbers today.
And the market's reaction to getting those prints before the opening bell.
Well, the reaction is what I care most about as a technical analyst.
It's how does the market absorb the news, not as much the news itself, and we have a little bit of a crack in the armor of the market from a momentum perspective.
You're seeing it much more in the NASDAQ 100 than the S&P 500, but we don't have a breakdown.
The NASDAQ 100 has been testing its 50 day moving average, and the S&P 500.
Holding up decently above, but it's getting what I would call coiled up, and that means we've seen sort of volatility lessen and lessen further, and that usually precedes a big pickup in volatility, and we'll see which way that comes.
As a technical analyst, are there any parts of the technical analysis of the S&P 500, these big picture indexes, you think is worth it for the average investor at home to maybe pay a bit more attention to or maybe even learn in the world?
Of technicals if they don't follow technicals that of course it's really very easy to get started with it.
We like to use moving averages as one.
The 20 day moving average can be a great indication of short term momentum.
So when you see a 20 day moving average roll over, that can be indicative of a loss of momentum that's significant enough to rotate your position, and we have indeed seen that from the broader market, from the major indices, and even from the.
Conductor sector, which of course has been a source of leadership.
So I do think that's the thing to focus on right now for those at home.
I wonder your take on what you've seen out of the big bank earnings.
Maybe you don't pay as much attention to the fundamental side, but anything interesting on the technicals for a lot of these big names who of course once again are kicking off earnings season overall.
And so far a lot of interesting movement from investors in reaction to the Goldman's and JPMs of the world the last few days.
I would say it's been.
Of a muted reaction and not really overwhelmingly positive.
I feel that the banks are holding up nicely, but they're not exactly breaking out.
We have consolidation phases underway, and that's healthy.
Healthy digestion is what I would call it within the context of their longer term uptrends.
Their relative performance has improved for financials in general, and that's helped keep a bid to the market when we have tech pulling back.
I wonder if you're surprised with the year to date.
Performance.
You know the book better than I do.
The Stock Trader's Almanac tells us historically this is the weak spot of the 4 year cycle.
We're inching closer to the midterm elections, despite what history tells us, maybe stronger performance year to date so far, Katie, than many analysts had been expecting.
Yes, that's fair to say that 4 year cycle does appear in many asset classes, and I feel that we're overdue perhaps for an off cycle.
That can mean a trading range for the major industries.
It could mean a bear market cycle, but we truly don't have indications of a bear cycle at this time.
So we want to respect the momentum while it's there and simply position for to manage risk through these corrective phases that we think may soon ensue.
All right, shout out to Jeff Hirsch and his father Neil Hirsch as well for the Stock Trader's Almanac.
Very grateful for your time, Katie Stockton.
Really nice to finally meet you and get to interview you today.
Please come back on the show anytime.
I sure will.
Nice to see you.
