Weekly Review U Stocks - 9th Aug 2024
Here is the weekly review figures and charts that I do every week. It is useful only for those interested in trading or those who hold multiple shares and based on performance would like to keep re-balancing as we go. As I have disclosed earlier I do hold a number of U stocks. This is the reason I include a number of other U Stocks in my analysis. In my figures, I also have performances of U stocks for last year - for those interested in looking at longer term view.
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Please note that all my analysis are from a trading perspective looking at short-term view.
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There are no new additions this week, so my stock list contains 33 stocks.
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How are we going in 2024 - General Market
- SP 500 looks like it may have dodged a bullet. Intra-week, it dropped to 5119, just under 10% drop from high of 5669. If it had dropped further, many believed that instead of 10% drop we could see that dreaded 20% drop. But job numbers on Thursday helped and SP 500 finished the week at 5344, last week 5346 - so flat for the week. A good 4% recovery from the drop. Although not out of the woods, but looking healthier now.
- Volatility Index VIX is at 20.37, last week at 23.39. But there is a story within the week. Intra-week it shot up to 65, a number not seen since Covid. Even in 2022 June drop, VIX was able to stay at 30s. Many waiting to see market top to happen after VIX was supposed to reach 60s in 2022. That never happened then. So some unusual play this week. But at just over 20, its looking healthy. Below 20 is neutral to bull market, so it's not very far away now.
- Bitcoin too did its own drama. It plunged over 20% suddenly, dropped below 50k. But then recovered. Like VIX. Like SP 500. Currently at 60k. Last week was 61k. So regained all losses. Another indication that temporary bottom may have had happened this week.
- Sentiment Indicator - on 24, Extreme Fear, last week 27 Fear. Not surprisingly. The plunge on SP 500, VIX, Bitcoin etc have made punters nervous and wary.
- Russell 2000 was doing better in last few weeks than other indices, indicating good time for commodities, risk-on assets. Looked like rotation happening to small caps. All that has been lost in couple of weeks. Its back in it old territory of extreme weakness now, a play for last couple of years, and stuck with weakest index tag for some more time. Dropped from 2109 to 2080, a drop of over 1% for the week. In the shock plunge on Monday, it breached psychological 2000 number to reach 1993, but has recovered, who knows for how long.
- Yields had dropped big previous week, but has again started climbing, moved from 3.8 to 3.94 this week. Better than 2 weeks back but not going in right direction for rate cuts.
- Dollar Index too going like Yields, big drop previous week, now rising.
- Gold, Silver, Oil - no major direction.
- So overall markets looking like consolidating here, trying to assure the 10% drop to 5119 may be the bottom for now. But its still open ended, and till we breach 5669 on the up, downward drop of 10/20% is not gone, reduced odds, but there
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What may happen next week - General Markets/U/Li/REE:
- SP 500 is at another test this week. Last week I had written that this week will be a crucial test this week. It played out that way. Drop till 10% and recovery. For next week, even if it doesn't gain, but holds the level, that will still be very positive. One year back at this time it was 4103. So big gains have been made. Also it went into a straight line, not doing 10% drops - so was unsustainable. Many believe this 10% drop is healthy, this consolidation could be the base for next leg. So lets see.
- All these days we were talking about rate cut. Markets rose getting close to it. A big twist has come now. Those pushing down believe Recession is the big play now. So change in narrative. Lets see if this narrative continues this week.
- Russell 2000 was a big disappointment this week. Its not looking good. All the positivity which was building for last few weeks seems to have evaporated in couple of weeks. Lets hope it turns.
- Uranium Sector overview - I have been writing for couple of months, May top, July end bottom, September end top. CCJ to reverse from here. This week CCJ reached 35.43. It had reached 56.24 high. So a drop of just over 37%, close to 38% those who play Fib. I follow patterns. There were 2 numbers in my mind - 35 was the first high it had reached after breaking 20s, so some support was expected there. Failing which 32 which 52 week low. It has come back from 35. While it was dropping the numbers I was looking to watch 45, then 39, then 35. So going up again crossing 39/40 is crucial. Then getting over 45. After that very good chance of reaching 65 in next couple of months. It finished Friday at 39.55 - so sitting right at a very crucial point. Which side will it tip? I feel if general markets behave, it may go up. I had exited all my U stocks end of May. I was writing for last 2 months I will buy over here. I have bought 40% of what I want to buy this week. Will be watching now to see what to do.
- Lithium Sector overview - I am writing same as for several weeks now, no change, sadly for Li holders. Close to 2 months back I wrote that - "Lithium sector is in serious trouble". Nothing has changed. We are in more trouble. At this stage, one would think the sector is nearly dead. No new money will come here. Last week was bad. This week was another forgettable week. ALB that I track to get sentiment, dropped another decent chunk, from 87 to 81 level, making a new 52 week low at 79. I think it is reaching a stage of complete capitulation. No one knows where the bottom is. Ganfeng too at 26.90, close to 52 week low of 26.30, so not looking good. For last couple of years, every week people feel it has dropped a lot, may be its bottom. But then it falls again. And again. So we don't know where the bottom lies. Money is getting out of sector. Li macro is very poor. One solace, if general markets too were to collapse, it may have gone worse, or who knows, everything going bad, a collapse may have moved from tech/Magnificent 7 into resource, so hard to predict. Good market is not helping. Will bad market make it worse, or better for Li stocks? Not an easy answer.
- REE Sector overview - I feel same as last week. REE stocks overall have done better than Li stocks. But now over 1 month, big signs that it is falling in line with the malaise happening in Li sector. So the bright spot which was there, I can feel its no longer bright. Its getting very serious now. Few stocks had done very well - WA1/BRE/ENR/MEI etc. All faltering now. Signs are not good, especially now that general markets are also looking into going into consolidation/correction mode. So I feel extreme caution now required for new entry. For last 5 weeks, across 30 REE stocks I track, we were in red for consecutive 5 weeks, so not a good look. This week another drop of 5% across 30 stocks.
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Personally:
This week there was a big change for me. I bought a lot of U stocks, have done 40% of my U shopping. If markets behave and U stocks look like they may have bottomed for this phase, then I will buy the rest. If something does not look right, I will exit immediately, with very low tolerance. I am not that much worried about U stocks on its own falling much bigger from here, but if general markets tank and SP 500 goes into 20% correction, it will drag U stocks down as well. That's my thinking, could be wrong, so please dyor. Otherwise I am playing very cautiously, not playing Li/REE at this stage. Just a few stocks here and there. For Lithium/REE I don't think in short-term sentiment may change, so may wait. Other plays in health stocks, with some splattering across Gold and Oil/gas - most of these I play standard spreading the money, so don't usually write there, but currently I have got around 10 stocks in these sector I am playing there.
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Stock/Sector specific Info:
- This week AGE playing in 3.3/3.8 zone, losing 3.8/4.6 zone. It literally played copybook range in this zone in this week. it touched 3.4 on 4 days, just staying above 3.3. Yesterday while coming back, it touched 3.8, but may need a push to get over the hump
- From a weekly perspective moved from 4 to 3.7 this week, last week from 4.5 to 4, so back to back losses have brought it to 52 week low of 3.4, hopefully that holds and we see a reversal
- No ASX U stocks that I track did a 52 week high this week, again this week. We are clearly in correction zone now
- U stocks down 31% for the year, so not a good look, in January we were in front, in mid 30s, so a big turnaround, nearly 70/75% drop from January for a lot of U stocks. This week average loss was another 8% across 33 U stocks that I track. last week was 5% drop, before that 4% drop, a week before 7% drop - so brutal 4 weeks in U space
- In May I had written I had exited most of my stocks at average 6.2. This week bought at 3.5 and 3.6, average 3.55, have bought around 40% of my quota. I will buy next, if market looks all right. If for some reason it does not, eg general markets start falling big, I will exit again immediately and then wait.
- U future is now at 81.60, last week at 85.05, week before at 82.45 - so no real movement for sometime. It has been playing around 85+/-for months. So nothing dramatic has yet happened to make an impact. Unless it gets towards 100, I feel it may be ignored, but markets may still like a break into 90s. .
- On Friday US U were mixed. CCJ gained, a few other too, but many other U stocks were in red including URNM ETF. General markets was in green. So may be a timid start to the week, confused, go up and down during the day
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Here is the Figures for the Week:
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(20min delay)