[U.S. Stocks] Review of Week 2024-03-04 and Strategy for the Week (Stocks to Watch)

Last week in the U.S. market, long-term interest rates fell and prices of gold, silver, and other precious metals rose. Although interest rates fell, stock indices also declined.

Checking sector-by-sector movements, utilities and materials outperformed last week. It was the first time since last September that utilities performed well, and at that time they were in an adjustment phase after six months of strong gains.

Also, the VIX is up over 12% for the week, and after about four months of low VIX readings, it is becoming more likely that the VIX will begin to rise in the short term.

Looking around at the stock indices, the performance of small stocks has continued to be relatively better than last week. For the time being, I would like to look for trading opportunities mainly in small-cap stocks.

Now, let's review last week's market by checking the chart.

Table of Contents

Last Week in Review
Strategy of the Week

Last Week in Review

The yield on the 10-year U.S. Treasury note fell -2.51%, breaking below the short-term uptrend that had been in place since the beginning of the year.

The VIX rose +12.27%. This is the first time since September of 2023 that the weekly rise has exceeded 12%. Confirming the movement of the VIX during past upswings, the VIX has tended to rise in cycles of 20 to 25 weeks. Now the VIX has been lower than 16 for 18 weeks and the risk of a gradual increase in the VIX is increasing.

NASDAQ Analysis

The Nasdaq monthly chart shows that the current rate of return for March is +0.05% and is flat at +0.05%. The rate of return has been flat at +0.05% for the month of March.

Here is the weekly chart of the NASDAQ, down -1.34% last week. The weekly uptrend is holding.

Nasdaq Issues Highs - The The number of stocks with low prices fell slightly but remained in positive territory.

Dow Analysis

Here is a monthly chart of the Dow with the current rate of return for March at -0.58%.

Here is the weekly chart of the Dow. Last week was a -0.74% was a decline of -0.74%. It has fallen below the previous week's lows and shows the first signs of a trend change.

Analysis of the S&P 500

Here is a monthly chart of the S&P 500, which is up +0.73% so far in March.

Here is a monthly chart of the S&P 500, which is up +0.73% so far in March Here is a weekly chart of the S&P 500, which is down a modest -0.04% last week. Last week was a modest decline of -0.04%. It is in the crosshairs for the first time during the upswing that began last November and is showing signs of directional hesitation.

Russell 2000 Analysis

Here is the monthly chart of the Russell 2000, which has rallied +1.69% in March, making it the strongest performer among the stock indices.

Here is the weekly chart of the Russell 2000. It was up +0.81% last week.

Commodity Futures Analysis

Crude oil was down -2.47%. It continued the gradual uptrend that began last December.

Natural gas was down a modest -1.63%. The trend has not yet been confirmed.

Gold rose sharply by +4.28%. It has broken out of last December's highs and made new highs. With interest rates about to start a downtrend, it looks likely that gold will continue to rise.

Copper was up a modest +0.78%, with the movement remaining in a range of 3.5 to 3.9. Last week, the price once rose to around 3.9, but selling prevailed and the price has an upper whisker.

Sector Analysis

Utilities, materials, and real estate rose last week, while consumer staples, telecommunication services, and information technology fell. Utilities outperformed for the first time since the week of September 18, 2023. Last September, utilities outperformed followed by a relatively large correction in the stock indices over a period of about a month.

In terms of sector performance, silver, grocery stores, and gold rose while automakers, education, recreational vehicles, and consumer electronics declined.

The performance by market capitalization over the past month shows that small-cap stocks have tended to outperform.

Trend of Individual Issues

Semiconductors (NVDA, TSM, QCOM), banks (WFC, BAC, MUFG, UBS, SMFG), utilities (NEE, D, DUK), gold (NEM, HMY, GOLD), and copper (FCX, SCCO) rose last week, while large tech stocks like AAPL, TSLA, and MSFT and mid- to small-cap software and biotechnology fell.

Strategy of the Week

3Since the beginning of the month, funds have been moving into utility and materials stocks, which have been left relatively undervalued, and since the second half of last week, there has been a move into high-tech stocks, particularly semiconductors, to begin to adjust. In addition, the percentage of stocks that have gapped up on earnings announcements in recent weeks but failed to continue rising and have fallen back is increasing, and buyers are decreasing and sellers are gaining the upper hand.

This week, it seems likely that the adjustment will continue in semiconductors and other high-tech stocks, following the trend in the second half of last week. We will continue to find stocks that can hold up during this adjustment phase without breaking down significantly in the coming weeks and select stocks to prepare for the next upswing.

Looking back at the results of trades so far in March, the win rate for trades originating from the closing has been lower than usual, so I will reduce position sizes and trade more cautiously.

Swing Trade Monitoring Stocks

We have removed stocks on our watch list that have rallied significantly since last November and replaced them with small- and mid-cap stocks that have either started to rise in recent weeks or seem likely to turn from declines to rallies. We are also adding S, PATH, and ERJ, which are scheduled to announce earnings this week, to our watch list.

Click here to see a chart of the stocks monitored.

Stock Screener - Charts AFRM,APP,ASPN,AVAV,AXON,CELH,COIN,DKNG,DXCM,ERJ,FROG,GPS,HIMS,HOOD,IOT,NET,NTNX,OKTA,PATH,PAY,PCOR,PLTR,S,SHAK SG,STNE,SPOT,TOL,UBER,VITL ticker

Stock screener for investors and traders, financial visualizations.

Stocks of particular interest this week are AFRM, GPS, NET, S, and PATH. These are stocks that have been in a period of adjustment and sideways movement after a sharp rise and are preparing for their next move.