A Page From My 'Playbook' for Risk in the Markets

I don't relive my glory days in sports often, mainly because they're only exciting to me... As a kid, I excelled in multiple sports. And I played football in high school and college. As I got to those levels, the competition was fierce. So it helped to have special skills... [Chaikin PowerFeed]( A Page From My 'Playbook' for Risk in the Markets By Pete Carmasino, chief market strategist, Chaikin Analytics I don't relive my glory days in sports often, mainly because they're only exciting to me... As a kid, I excelled in multiple sports. And I played football in high school and college. As I got to those levels, the competition was fierce. So it helped to have special skills... I was fast. And I could also jump really high for my height. At age 15, I was only about 5 feet, 7 inches tall. But I could grab the rim of a 10-foot, regulation-sized basketball hoop. In my personal "playbook" for sports, I learned that I could disrupt the other team with my speed and jumping ability. It didn't matter whether I was on offense or defense. My glory days eventually ended. But when I entered the financial industry, I realized that finding long-term success in the market is a lot like building a playbook in sports. The competition is just as fierce in the markets as it is in sports. Speed matters. And so does the ability to jump from "risk on" to "risk off" assets. Here's what I mean... Recommended Links: [How "Playing it Safe" Could Lead to 9x Gains, Starting Immediately]( If you think the only way to see huge upside is with complex and risky strategies – like trading options... or buying penny stocks... a top analyst has news for you: You can do it with ordinary stocks anyone can buy. In fact, he's shown his readers closed gains as high as 629% with this simple, low-risk strategy... and he says today is an even better time for you to start doing this, too. Until midnight tonight, [click here for details](. [His System Isolated NVIDIA – Here's His NEXT Buy]( Marc Chaikin's stock-picking system isolated NVIDIA before its massive bull run this year. Now, it just flashed "BUY" on a new AI company that no one is talking about yet. It's not a household name... but Marc predicts it could quickly double or triple from here. [Click here for the name and ticker](. First, let's define the terms... "Risk on" is about being invested in growth stocks. These types of stocks inherently come with higher risk... You're betting on future growth. It's not guaranteed to happen. But investors hope these riskier bets pay off. And they often do. That's when it pays to have a risk-on approach. When it comes to Wall Street's playbook, a risk-on approach is like playing offense. On the flip side, "risk off" is like playing defense. With a risk-on approach, investors are trying to "score" – or increase their profits. But a risk-off approach focuses on stopping or limiting losses. Now that we're on the same page, here are my top three risk-on sectors... • Technology Select Sector SPDR Fund (XLK) • Communication Services Select Sector SPDR Fund (XLC) • Consumer Discretionary Select Sector SPDR Fund (XLY) This play in my risk-on playbook consists of tracking the trends of these three sectors. These sectors are full of the growth stocks that investors turn to when they're willing to take on more risk. It's like how a scout watches the next opponent of a college football team. The scout goes to the opponent's games to find the players that his team needs to focus on defending. In this case, I'm also always scouting against the benchmark S&P 500 Index using the SPDR S&P 500 Fund (SPY). That brings us to the three-paneled chart below... [Chaikin PowerFeed] Now, this chart looks more complex than a basic stock chart. But it's easy to understand... The top panel shows XLK's ratio against SPY. That just means XLK is divided by SPY to form a ratio. When the ratio is moving up, XLK is outperforming SPY – and vice versa. The same thing is true for the other two panels in the above chart, except they show the performance of XLC and XLY versus SPY. You've probably never noticed the word "versus" in finance before. But by comparing these risk-on sectors versus SPY, we can see that they're all currently in uptrends. In other words... the offense is on the field right now. When the offense is on the field, the defense isn't. And when we look at a similar chart of three typical "risk off" sectors, you can see that's true today... [Chaikin PowerFeed] The top panel shows the ratio of the Health Care Select Sector SPDR Fund (XLV) versus SPY. In the middle, it's the Consumer Staples Select Sector SPDR Fund (XLP). And the Utilities Select Sector SPDR Fund (XLU) is in the bottom panel. These sectors are considered risk-off areas of the market because they're less about growth and more about safe returns. Since these sectors all deal with our everyday needs in one way or another, they're good places to shelter from a market storm. As you can see, all three risk-off sectors are in obvious downtrends right now. So our takeaway is clear... Using my playbook for risk, it's obvious that investors are willing to take on more risk today. And they're not as concerned about playing defense. But keep in mind... When the risk-on approach is in an uptrend like right now, pullbacks can still occur. The difference is that you can view them as buying opportunities instead of reasons to get out. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.05% 14 13 3 S&P 500 +0.54% 174 247 78 Nasdaq +1.12% 53 39 7 Small Caps -0.16% 553 972 415 Bonds -0.22% Information Technology +1.60% 39 25 1 — 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 Energy +2.93% Health Care +1.61% Utilities +0.13% Industrials -0.58% Communication -0.76% Real Estate -0.93% Staples -1.10% Information Technology -1.21% Materials -1.45% Financial -1.54% Discretionary -1.77% * * * * Industry Focus Software & Services 93 55 1 Over the past 6 months, the Software & Services subsector (XSW) has underperformed the S&P 500 by -1.97%. However, its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors and has moved up 2 slots over the past week. Top Stocks [rating] RPD Rapid7, Inc. [rating] CTSH Cognizant Technology [rating] QLYS Qualys, Inc. * * * * Top Movers Gainers [rating] NVDA +7.09% [rating] MU +6.07% [rating] STLD +5.23% [rating] TDY +4.98% [rating] MPWR +4.48% Losers [rating] FTRE -12.21% [rating] KEY -4.67% [rating] CMA -3.90% [rating] CFG -3.68% [rating] TFC -3.66% * * * * Earnings Report Reporting Today Rating Before Open After Close CAH HD, TPR A, JKHY No earnings reporting today. Earnings Surprises [rating] ROIV Roivant Sciences Ltd. Q1 $-0.28 Met estimate * * * * 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. © 2023 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. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors. Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.