ARKK SPY 

I want to look at a bearish wedge pattern here. Let’s look at ARK ( NYSEARCA: ARKK ). I know that some of you guys are still worshiping at the altar of Cathie, and she’s the world’s most amazing stock picker in the world. We’ll see if you are still saying that when this stock is down 80 percent, which personally I would say it’s at least going to do that. That’s not what I am talking about here.

I am talking about this particular pattern and here’s why. When you see a stock within a downtrend and then it starts making higher highs and higher lows but it hasn’t broken the downtrend, it leads to a poor outcome, like water pouring out of a garden hose. You could kind of say the same thing here, where the highs and the lows are both higher but they are kind of converging.

The way that you can really watch for this pattern is, first, it has got to be in a downtrend, it’s got to be in a downtrend. And once it’s in a downtrend, you could have even looked back here and see the same kind of thing, it’s in a downtrend. From 130.00 down to 90.00, I would say that qualifies as a downtrend.

And so then it finds this support here and then it starts drifting up but it never breaks any moving averages, it is still in a bearish situation. Once this stock falls below you can see what happens. The same thing here, it didn’t challenge these moving averages. And then once it falls below you see it. We can do the same thing here, you can do the same thing here, I’m doing it right here.

The point is, right now we are in big, big bearish territory here for this stock. There are any number of other tech stocks that would give you the same patterns. The reason that I am pointing this out is this, this is not the bottom. But I want to distinguish something here, just because I am saying this is not the bottom, I am not even saying this stock is just going to continue to go lower and it’s going to implode, and this and that.

I think a better way for me to say it is, I just don’t think it’s a buying opportunity. Because you have got markdown phases and then after the markdown phases then you’ve got this period of accumulation where a stock is going to drift sideways for a while. I don’t want to be in the sideways drifting. I want to be in the next phase which is the markup phase, where the stock is done being accumulated. It’s done making a base and now it is moving up from there and this is not that stock, this is the other way around.

I will leave you with this, it’s something that I emphasized in our Strategy Session today, and that is, that the market always looks ahead. The market anticipated this crappy economy that we are in right now. The market is anticipating even a bigger crap in the economy. And so you can see the stocks are going down.

But at some point, even as the economy worsens, it gets worse and worse and worse, all of your kids are back living with you and they won’t do the dishes. It gets worse and worse and worse but the market doesn’t continue to go down. It kind of drifts sideways and then like lo and behold, you’re actually seeing some stocks move higher a little bit.

And you are going, what the heck is going on with this? What is happening is, that the market is seeing the end. And it is saying that the end is near. And when I say near, maybe the end is 6 months near or a year near. But the market is anticipating better times ahead.

So don’t just keep looking at the news flow, look at the tape. Look and see what the market is doing. Right now ( NYSEARCA: SPY ) the market is killing you. But there is going to come a time when it is not doing that anymore. So stay engaged, and don’t be losing all your dough. But stay engaged and you are going to wind up being in a great position.

In fact, I was just reading from one of our members who said, “Dan, this is how you saved me lots of cash in March of 2020. I had a record year in 2020 because I was 100 percent in cash and I pounced when it was safe. I appreciate you continually applying the same methodology.

And that is what we are doing, we are just applying the same old thing knowing that sometimes that methodology is going to make us a bunch of money. Other times that methodology is going to keep us out so that we avoid losing a bunch of money.

WWE SPY QQQ 

This is Scott with your Chart of the Day. The market is brutal right now; if I look at the SPY ( NYSEARCA: SPY ), blah, it closed near the lows. QQQ ( NASDAQ: QQQ ), closed near the lows. I think everyone is waiting for CPI to come out and so while we wait for that it is kind of slim pickings in terms of trading opportunities.

But I did spot WWE ( NYSE: WWE ) on a scan tonight and realized this is actually holding up pretty well in a bad market. If I zoom out here you can see that it’s above all the major moving averages and just kind of consolidating around that $66.00 level. If I bring out the drawing tool here, you can see I can draw a downward sloping trendline from there to there and maybe a little support area right there. And so it is just kind of tightening up now.

I don’t know, because of the market, how this is going to react when CPI comes out. But I think it is worth watching for a clear break of this range to the upside and a close above coming on higher than average volume. Now, the volume today here on the daily chart was pretty good, higher than average. If I dialed into a daily chart you can see there is a lot of buying throughout the day and then just kind of a last-hour sell-off with everything else. Even the SPY ( NYSEARCA: SPY ) was dumping into the close.

But I think this ( NYSE: WWE ) has a chance to at least test the highs up here because it is already near the high. So if the market does turn around I think WWE ( NYSE: WWE ) is a stock that we should definitely keep an eye on, I know I will be.

XLE SLB XOM HAL CVX HES PSX FANG EOG DVN APA BKR PXD MPC MRO WMB VLO CTRA DKE XMI DXY BKR 

This is a really crappy market ( NYSEARCA: XLE ), a lot of stuff is just not really worth looking at, frankly, not much is worth looking at. So why am I doing this video instead of just going, no free stuff today? I will tell you why because I want to show you something that I do probably a little more often than you might think.

I am looking at all of the different industry groups, the sectors. They all really look like crap except energy is the one that seems to work for me. The whole shipping and ports thing, I go into that in a lot of detail in tonight’s Strategy Session. But I just want to look at energy now.

I see energy as working. And so if I am looking for new trades I will do this, I will pull up the energy ETF components, the holdings. And then I will sort according to gains or losses for this particular day. And then I will just start banging through them, and they will all look pretty good ( NYSE: SLB ), ( NYSE: XOM ), ( NYSE: HAL ), but I am looking for a particular look for entries. Chevron ( NYSE: CVX ) looks interesting, but no.

A lot of these are woulda, coulda, I wished I hada, ( NYSE: HES ), ( NYSE: PSX ), ( NASDAQ: FANG ), ( NYSE: EOG ). ( NYSE: DVN ), ( NASDAQ: APA ) kind of thing, ( NASDAQ: BKR ). I will just kind of go through these ( NYSE: PXD ), ( NYSE: MPC ), and look and see ( NYSE: MRO ), ( NYSE: WMB ), ( NYSE: VLO ), ( NYSE: CTRA ), ( NYSE: OKE ), ( NYSE: KMI ), ( NYSE: OXY ), ( TSE: XMI ), for what really seems to be working. It really is a great way to find stocks. It is also, by the way, a great way to get a kind of under the hood assessment of what is really going on.

And this is what I mean, if you are just looking at XLE ( NYSEARCA: XLE ) it looks a little kind of extended here. Now, don’t get too caught up in that because things that get extended tend to get more extended, that’s the way extensions work. But it does look like it is getting a little long in the tooth here and kind of begs for some type of either a sideways consolidation or maybe a little pull back. But is that really true?

This is when I would go in and look at the individual components. And what I am looking at is this ( NYSE: SLB ), am I seeing any good entries? And if I am not seeing any good entries, is it because the stock has already gone up too much and I would be chasing? Or is it because the stock just sucks and there is nothing for me? With those questions being asked I will get a real good sense of the underlying stocks in the sector.

Okay, too far ( NYSE: XOM ), too far ( NYSE: HAL ), we’re in that though. Too far ( NYSE: CVX ), too far ( NYSE: HES ), too far ( NYSE: PSX ). All of these ( NASDAQ: FANG ) are the same ( NYSE: EOG ), ( NYSE: DVN ). They are just like, yes, ( NASDAQ: APA ), most of these stocks have kind of gone too much. And so, so far what am I getting out of the sector? I am getting confirmation that the XLE ( NYSEARCA: XLE ), as it represents all these stocks, is where it is because a broad swath of those stocks has been doing the same thing, which is moving upward. It is not being driven by 1, 2, or 3 big stocks and the others are kind of sluggish ( NASDAQ: BKR ).

And so what this ( NYSE: PXD ) is telling me is ( NYSE: MPC ), there is some real institutional activity here because that’s the only way all the stocks ( NYSE: MRO ) would be going up. So there is some ( NYSE: WMB ) real institutional activity ( NYSE: VLO ), ( NYSE: CTRA ), ( NYSE: OKE ), it’s broad-based buying ( NYSE: KMI ). And by the way, if a stock like, well this is kind of a laggard ( NYSE: OKE ), I should buy that one. No, there is a reason why it is a laggard, I don’t know what it is, but there is a reason why you don’t want to be in this stock. Why you would have rather been in Chevron ( NYSE: CVX ) or Exxon ( NYSE: XOM ), something like that.

We go through all of these stocks and the sense that I get is, yes, this is a really strong sector. Yes, most of the stocks have gone up so much that I wouldn’t be comfortable buying them. That is way more information than the information that you will get if you just looked at the XLE ( NYSEARCA: XLE ). This is the kind of stuff that I do on days when there doesn’t really seem to be much to do. I will look at 500 charts within a certain framework so that I am just not banging through stocks.

You might want to use this in your own trading. Just remember, the buying and the selling are easy. A trained monkey, even an untrained monkey could do that, just click the mouse. But the real money is made in the searching, in the waiting in the patience. This to me is that time when you just really have got to be patient with what you are doing.