Posted on July 11, 2022 by Scott Shuda
Is it just me or has 2022 seemed like a series of investing head fakes? It’s like trying to tackle Barry Sanders – just when you think you got your hands around him he jukes and bobs you right out of your cleats.
Sanders, the 5’8” humble superstar and Hall of Fame player was the most elusive runner in the history of the NFL. He could make the best tacklers look bad, much like this market has made investors whiff. When you think you have grasped a trend or direction of a commodity or market sector it reverses course like Barry Sanders leaving you clutching at thin air.
Amidst this frustrating turmoil comes some calm for market direction from July Strategy published by Cannacord Genuity analysts Tony Dwyer and Michael Welch.
“All three factors favoring “a” bottom remain in play. Despite the difficult fundamental backdrop, our framework for the anticipated summer rally like 1994, 2000, or 2018 remains based on the short period of time when the market transitions from the fear of higher interest rates creating a sharp economic slowdown to when the data shows it actually becomes a reality. The summer rally in all these periods took place in this transitional window, which showed the following conditions:
1. The market stabilizes from an extreme oversold/pessimistic enough condition to generate a sharp bounce,
2. The belief the bond market had discounted the hawkish Fed,
3. The hope for the rare “soft landing” because the data was slowing, but not yet clearly recessionary.
Most investors don’t realize that while the major market indices made their lows in June, the internals of the market as measured by the NYSE Cumulative Advance/Decline line made its low in May. In addition, Durable Goods inflation, commodity prices, market- based inflation expectations, and long-term U.S. Treasury yields have fallen sharply. In other words, you still have the set-up for a summer rally: (1) Our intermediate tactical indicators are bouncing from extreme oversold and a positive internal divergence, (2) increasing expectations the Fed might be able to back off their planned hikes, and (3) weakening but still positive economic and corporate profit outlook.”
*Snipp Interactive Intro – a NEW PICK is out. SNIPF is the latest selection from Breakout Investor Florian Buschek. It is in his Elite Room.
*Oil forecasts for the rest of the year are all over the place, with Goldman Sachs still calling for crude to hit $140 or more, while Citi sees prices falling to $65/bbl if the economy tips into recession. – Seeking Alpha
*Say it ain’t so: Due to terrible weather conditions there’s a lack of Mexican chiles causing a serious shortage of Sriracha sauce.
*The start of the summer travel season in Europe has been marred by chaos at airports and popular tourist destinations as airlines, government agencies and industry operators struggle to meet travel demand, which, in some spots, has already surpassed 2019 levels. – NYTimes
*Breakout Investor Christopher Moore has an updated chart of QIPT, a healthcare company covered by Aaron Warwick.
*Don’t forget the Elite Call with Ashleigh Day tomorrow, Tuesday July 12 at 3 pm CST after market close. There’s a link on the Feed.
“Nobody in football should be called a genius. A genius is a guy like Norman Einstein.” – JOE THEISMANN
Good luck to all – Chris
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