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VoSI Focus List Review for the Week Ended November 11, 2022

As the Dow has led the market rally off the mid-October lows, by Wednesday of this past week the NASDAQ Composite looked set to test those same October lows in what has been more than just a bifurcated market, but a multifurcated market. Thursday's CPI report, however, came in at 0.3% vs. expectations of a 0.5% month-over-month inflation growth, sparking a massive rally based on the idea that the CPI is inflecting back to the downside and peak inflation has been reached. This remains to be seen as we await Tuesday's Producer Price Index number which will give some idea as to the validity of any peak inflation theories.
Meanwhile, mega-cap names continue to lead the market as the Dow pushes well past its 200-day moving average and looks set to test the mid-August bear market rally peak.
The benign CPI number, what we like to refer to as CPI Lite, also sparked a big rally in the precious metals sector. Two Thursdays ago, a week before the CPI report was released, we issued U&R Reports for both the Sprott Physical Gold Trust (PHYS) and the Sprott Physical Silver Trust (PSLV). At that time the PHYS posted a U&R long entry along its September 26th low at 12.50 and its October 20th low at 12.52. It has since scooted higher since then, gaining further momentum after the CPI report this past Thursday, fully a week after the PHYS posted its U&R long entry point and giving traders an opportunity to build a profit cushion in the PHYS ahead of the CPI number. It is now extended.
The Sprott Physical Silver Trust (PSLV), reflecting the outperformance of the white metal vs. gold since the October lows posted a moving average undercut & rally or MAU&R at its 50-dma two Thursdays ago. It has since streaked higher and is now encountering potential 200-day moving average resistance. For now, we would watch for constructive pullbacks to the rapidly rising 10-dma or 20-dema if the current Fed pivot market rally holds.
In addition to streaking upside moves off the lows on Thursday and Friday, we also saw many reversals heading into the end of the week. The long side of the market is somewhat problematic since the sharpest, highest-velocity moves have occurred from otherwise moribund chart patterns. Various sector ETFs illustrate the ugliness seen across the board on Wednesday that instantly changed direction after Thursday's CPI Lite report. Big-stock NASDAQ (QQQ), Retail (RTH), Cloud Software (SKYY), Semiconductors (SMH), Homebuilders (XHB) and Metals (XME) all illustrate the erratic nature of the overall market action this past week. If these are all signaling glorious new intermediate-term uptrends from here, then it will take some time for these and other areas of the market to consolidate their upside turns over the past two days and set-up properly for any potential, sustained uptrends from here. As our knees do not jerk so readily, we feel it is best to let thing settle down and set up as the case may be. Otherwise, our reports on Gold and Silver two Thursdays ago, long before the CPI number was released, have given traders very reasonable targets with which to participate in the erratic and sudden upside action even before it occurred.
The Market Direction Model (MDM) remains on a SELL signal. Please read the latest MLR report for a brief update on potentialities with regards to market direction over the intermediate term. 

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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