THE BIG IDEA
Well, here we are again.
Another down week for stocks (the fourth in a row, BTW) and another weekend of looking at the situation and thinking the conditions are ripe for a rebound. Yet also thinking that things could get worse before they get better.
The way that Friday unraveled didn’t make anybody feel good, either. Wall Street came back from lunch and just repeatedly pressed the Sell button. Here’s Friday, in 5-minute intervals:
So, what to do? Do we sell now and risk selling at the bottom, as so many people end up doing? Or do we look for a tradable bottom at the risk of becoming a broken clock. Eventually, the market will go up, right?
We see multiple reasons to be either bullish or bearish.
Reasons to be bearish
Many, many stocks are trending down and, as they say, the trend is your friend. There is a possibility that the selling begets more selling.
Both interest rates and energy prices are heading higher. Not good for most of us. And if it is not good for most of us, it is not good for the businesses that sell us stuff.
Weak countertrend rebounds, such as the one the first two days of last week, can be a symptom of a bear market taking hold.
Reasons to be bullish
Whatever indicator of market sentiment you prefer is almost certainly at levels last seen during the peak of last year’s tariff tantrum.
You would think that stocks in the Defense industry would be doing well now, but they were down last week. Maybe the market is anticipating an end to hostilities in the Strait of Hormuz.
A surprising number of stocks had an up week last week, suggesting that all is not as bleak as it seems. A variety of stocks ranging from Citigroup to Dell to Chipotle Mexican Grill were up 2% or more.
Pick a side
In the end, we come down on the side of being short-term bullish. More likely than not, we will see a rebound even if it lasts no more than a couple of weeks.
Some part of Friday’s relentless selling was likely related to the notorious “triple witching” expiration day for stock options, stock index futures, and stock index options. That can reverse itself as early as Monday.
If the U.S. government can find, and take, a way to declare victory in its military operations, then the market will (temporarily) overlook any economic damage done.
If we play it right, we’ll be head & shoulders above the rest of the market.
SEEN ON THE INTERNETS
Joe Duarte’s latest edition of his newsletter, Smart Money Passport, got our attention this weekend even if only for the hilariously long headline. Go ahead and take a look before we continue.
Aside from the headline, he comes through with some clear-headed comments on the state of the stock market. Yes, market sentiment is at levels that often produce a noteworthy bounce. However, “sometimes the bears are right”.
Duarte is looking for the market to jump but wants to see proof of it instead of speculating about what could/should happen.
He sums up his current thinking this way:
One aspect of the recent panic is the lessening of liquidity in the market. I don’t know if we need to call it a “crisis”, as Duarte does, but it is an underreported issue. He is the only one I have seen commenting on it.
NUMBERS ONLY
- 4.95% | After a robust start to the year, the S&P 500 is now down nearly 5% YTD. |
87.4% | 7 out of every 8 stocks in the S&P 500 are currently below their 20-day average. |
13 weeks | Energy stocks are up 13 weeks in a row and counting. Will this be the week we finally see a reversal? |
SWINGEX INDEX
As of market close on: 20 March 2026
Swingy says: The headlines are looking rough, but the index says the storm will pass.
Learn more about how the Swingex Index works here.
WATCHER
Stocks highlighted here each week are not recommendations to buy or sell. They are provided as ideas for swing traders to follow up on with their own research.
NVT (nVent Electric): It is not exactly a well-known name. According to their website, they “connect and protect our customers with inventive electrical solutions”.
One thing we know is they are in the Electronic Equipment industry, which has been an area of strength this year.
Another thing we know is the stock has been trending higher for a while. Every dip in price - including one earlier this month - has been quickly bought up.
From looking at a chart of NVT, you would hardly know there was a retreat underway on Wall Street. It’s that relative strength and proximity to all-time highs that makes this our Watcher pick this week.