Republic Risk: Good Time to Focus on the Energy Sector

We're red on technology and energy - something that never happens. So, we are now playing the waiting game on both - with a special focus on Valero and HF Sinclair. Let's get ready to trade soon.

Equity Index Strength Is YELLOW on the S&P 500 and YELLOW on the Russell 2000.

Each morning, we assess the full flows of the market by measuring statistical and technical metrics to determine broader market sentiment and the Equity Strength trend. When these readings turn red, we focus on cash, build trades around positive sectors, or take inverse positions against indices. When it is positive, we focus on short-squeeze stocks, companies with improving fundamentals, and trading/investing around the actions of corporate insiders.

This market is not healthy. Lots of profit taking. The Russell 2000 ETF (IWM) is sitting on the ledge. The Relative Strength Index is just above 50. The MACD is quite negative. The ADX is right at the edge. I don’t know what comes next with the CPI this week and a busy start to earnings. I simply argue that now is a good time to hedge existing positions. In a world dominated by moving averages, we must obey.