The Power Gauge Is NOT Rushing to 'Play Defense'

The stock market is in the middle of a rough patch... The benchmark S&P 500 Index fell as much as 5% from its record high at the end of March. And the Nasdaq Composite Index dropped 7% from April 11 through the end of last week. [Chaikin PowerFeed]( The Power Gauge Is NOT Rushing to 'Play Defense' By Vic Lederman, editorial director, Chaikin Analytics The stock market is in the middle of a rough patch... The benchmark S&P 500 Index fell as much as 5% from its record high at the end of March. And the Nasdaq Composite Index dropped 7% from April 11 through the end of last week. This recent pullback is scaring some investors. These folks worry that a bigger, longer decline could be coming. As Chaikin Analytics founder Marc Chaikin [noted last Thursday](... Volatility is back. It makes sense. After all, a lot of storm clouds are looming on the economic horizon... Inflation remains high. So in turn, the Federal Reserve is still in a holding pattern. The central bank isn't lowering interest rates yet. Consumer credit and auto-loan defaults are on the rise as well. And the unemployment rate is inching up. My point is simple... If you look in the right places, it seems like the market is coming apart at the seams. As a result, some folks want to hunker down and get ready for a prolonged downturn. So they're searching for the best ways to "play defense." But as I'll show you today, the Power Gauge is telling us to do something different... Recommended Links: ["Things don't feel right in America..."]( And regardless of who wins the White House, it's unlikely to get any better. But this 95% accurate trading strategy can help. It has racked up 55 winners and ZERO losers during the last three elections... and can add thousands of dollars to your income every month, no matter what's happening in Washington, D.C., or on Wall Street. [Click here for this "instant cash" solution](. [Forget the Election – This Man Could Shape Our Destiny]( With the election around the corner, you're probably wondering who will take the White House and how that could impact your lifestyle and finances. But Pentagon consultant Joel Litman warns it won't matter who sits in the oval office – because this "shadow" politician has triggered a chain of events that could have far more impact on your money than any President. [Click here for details](. Regular Chaikin PowerFeed readers know that [Marc expected to see a bout of volatility]( before the summer. That's exactly what we're dealing with right now. But this pullback doesn't mean we need to run for the hills. The Power Gauge helps us see that... We can use our one-of-a-kind system to look at the so-called "defensive" sectors. By defensive, I'm talking about sectors like utilities, consumer staples, and health care. The idea is that demand in these three sectors will remain constant no matter what's going on in the economy. So if the economy struggles, these sectors aren't as risky as areas of the market that depend on a lot of growth. In other words, these sectors often provide great ways to play defense. But we're not seeing that yet this time... Take the utilities sector, for example. We track this space through the Utilities Select Sector SPDR Fund (XLU). And as you can see in the screenshot below, it's "neutral" today... [Chaikin PowerFeed] Four of the 30 stocks with Power Gauge ratings in XLU are "bullish" or better right now. None of the ETF's holdings are "bearish" or worse. And as you can see, most are "neutral." Put simply, the utilities sector isn't screaming "buy" at us right now. Plus, despite a recent uptick, XLU is still lagging over the longer term. Take a look... [Chaikin PowerFeed] XLU is up around 18% from its October 2023 low. But as you can see, it's still down roughly 15% from its September 2022 high. You'll also notice that the sector has been mostly "neutral" or worse since the end of 2022. Next, look at the relative strength panel at the bottom of the chart... XLU has significantly underperformed the broad market over the past 18 months. And most importantly, that's still true today. The other defensive sectors tell the same story. The main ETFs for consumer staples and health care both hold "neutral" ratings. And they're both underperforming the market. So yes, the broad market is pulling back right now. But the Power Gauge is clear... It's not time to play defense yet. The three main defensive sectors aren't clear-cut buys today. That's true despite the recent pullback in the broad market. So instead, for now, I'll keep using the Power Gauge to focus on the strongest corners of the market. By that, I'm talking about the sectors that earn "bullish" or better ratings today. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.69% 8 20 2 S&P 500 +1.15% 131 311 56 Nasdaq +1.49% 16 70 14 Small Caps +1.67% 431 1054 419 Bonds +0.03% Communication Services +1.52% 3 13 3 — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Utilities +5.69% Financial +3.97% Staples +3.08% Health Care +1.89% Energy +1.77% Real Estate +1.3% Industrials +1.09% Communication +0.95% Discretionary -0.36% Materials -0.59% Information Technology -2.34% * * * * Industry Focus Transportation Services 13 21 9 Over the past 6 months, the Transportation subsector (XTN) has underperformed the S&P 500 by -6.34%. However, its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #12 of 21 subsectors. Top Stocks [rating] ARCB ArcBest Corporation [rating] AAL American Airlines Gr [rating] ALK Alaska Air Group, In * * * * Top Movers Gainers [rating] GL +14.11% [rating] GE +8.28% [rating] DHR +7.21% [rating] SMCI +6.25% [rating] KMB +5.51% Losers [rating] LKQ -14.88% [rating] MSCI -13.43% [rating] NUE -8.87% [rating] IVZ -6.42% [rating] WRB -5.21% * * * * Earnings Report Reporting Today Rating Before Open After Close BG, WAB, TEL, SYF, NVR, GD, ETR, BSX APH, WM, RJF, ORLY, META, CMG, ALGN AVY, FTV, TMO, BIIB, TDY, T, OTIS, ODFL, CME, NSC, MAS, IPG, HLT, HAS F, IBM, IEX, LRCX, MOH, NOW, CDNS, BA, ROL, TER, TYL, UHS, URI HUM No earnings reporting today. Earnings Surprises [rating] SPOT Spotify Technology S.A. Q1 $1.04 Beat by $0.34 [rating] CSGP CoStar Group, Inc. Q1 $0.10 Beat by $0.03 [rating] PHM PulteGroup, Inc. Q1 $3.15 Beat by $0.79 [rating] EQT EQT Corporation Q1 $0.82 Beat by $0.17 [rating] GM General Motors Company Q1 $2.62 Beat by $0.51 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2024 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. [www.chaikinanalytics.com.]( Any brokers mentioned constitute a partial list of available brokers and is for your information only. 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