Minerva Market View for Apr 21, 2024

We may get a bounce from oversold conditions, but the risk/reward don't favor being long here.

Apr 22, 2024

Good evening. Indices and sectors like Semiconductors are getting oversold and are ripe for a bounce here. However, the dip/correction is likely not over yet, and we’re likely to give up those gains and head lower before forming a tradeable bottom.

IBD / MarketSurge have changed their outlook to "Market in Correction". Exposure is their minimal recommended range at 0-20%.

Both major indices have their 21-day EMA breaking their 50-day SMA. The power trend that had been on since the October low is now off (one of the shortest power trends).

Daily chart of the Nasdaq Composite Index

The Insurance sector has been showing relative strength of late. Let’s see if that follows through this week. We have a few holdings in this space including ALL 0.00%↑ PGR 0.00%↑ and ACGL 0.00%↑.

The next important date for a major inflection point is May 1st when the Treasury will announce the split of the QRA (Quarterly Refunding Announcement) into bills and bonds. If they announce more bills than expected, that can provide liquidity for the next leg higher. On the other hand, more bonds would spike long-term yields higher and suppress all risk assets further.