Earth Day may be on the 22cd of April, but the year ending with 22 is not showing the earth any love. The global community faces a rise in living costs, possible famine in the Middle East, worldwide drought that results in huge wildfires, virus in the air along with other pollutants and war. With the eternal hope of spring, we pray that this will pass. In the meantime, we have to adjust and do the best that we can.
Market...
had looked at the situation, heard the threats from the Fed and decided to take profits. For many others, cut their losses as signs appear that this downtrend has strength. Not to give self-praise, but here at Evolution, we called this correction.
Conviction...
comes from many sectors. Sebastian will point out a few past market leaders and their current standing. One leader was NFLX. Netflix double gapped lower. When stocks gap, they trend to come in threes. This is very negative in charting called, "Three Black Crows." NFLX dropped on high volume. It was $700 last November. It closed on Friday at $215. Ouch! By the way, this is its 2019 price.
Facebook, now called Meta Platforms was $350 in November. It closed Friday at $184. It too has a serious, large gap. It too is priced at its 2019 level.
XBI or the biotech sector was $174 in February 2021. It closed Friday at $79 on big, down volume.
XLK or the technology sector was $176 just four months ago. It closed Friday at $143. It is testing a lower low at $140.
Oil...
is always the most important sector. You always have to watch the price action of the commodity. US crude was $130 in March. It closed Friday at $102. Brent was $139 in March. It closed on Friday at $105. Price action is suggesting, (we are not sure) that the $130 could be a top? If that is true, oil could retrace all the way back to $85?
What we see
The market is extremely oversold. This could result in a relief rally. You might want to risk a short term trade, but don't be fooled. The 4th of May and the Federal Reserve will be market moving news. The so-called half-point rate increase is a ploy by the Fed. If they were serious about fighting inflation, a full point would happen. They are liars and manipulators. This is another reason why we say, End the Fed!
Strange Occurrence
Everyone knows about the various consumer products that cost more due to inflation. Food is necessary every day. There have been reports of many fires recently to food warehouses and producers. This is conspiracy stuff to some. However, this is a fact. Massive fires in food plants have happened repeatedly and across the nation. I do have one fear. Could this be the result of Russian hackers who found a way to overload elecric lines? The causes have not been determined. In a related aspect, FBI reports that farmers are also being attacked with ransomware. Back to the fires - these fires are spread across a wide range. There was one in Oregon. There was one in New Hampshire. There was one in California and another in Indiana. One of the largest food banks in Texas went up in flames. No answers to the cause in any of the locations. Sadly, as I am writing this piece, another fire broke out at a General Milla plant in Iowa. We conclude that food inflation will continue to rise, especially with the loss of Ukrainian supply. Let's pray that this will pass. Peace
