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The Price Action Lab Report-Week of March 13, 2023 [Premium Articles]

Photo by Burak The Weekender

Market analysis for the week of March 13, 2023. Major market indexes, ETFs, commodities, and forex. This report includes 17 charts and tables. Free access to weekly summary. Access to the full report requires a Premium Articles or an All-in-One subscription.

Announcement: We are terminating extended subscription offers. We are still offering an 8-month Premium Articles subscription at a 30% discount until Monday, March 13, 2023. Click here for more details. 

Report contents

  1. Weekly Summary.
  2. Chart of the Week.
  3. Market Performance Recap.
  4. Major Market Indexes.
  5. Commodity ETFs and ETNs.
  6. Strategy ETFs.
  7. Spot Currency Pairs.
  8. Strategic Allocations.

1. Weekly Summary (March 6 – March 10, 2023)

  • Stocks were down due to risks from the SVB bank run.
  • Bond prices rallied and yields fell.
  • Commodities fell due to a broad market sell-off.
  • The US dollar ended the week slightly higher.

Stocks and commodities fell hard after the SVB collapse. Bonds, gold, and the US dollar gained amid rising volatility.

Large-cap stocks ($SPX) dropped 4.5%. The Dow Jones Industrial Average ($DJI) lost 4.4%. Small-cap stocks ($RUT) plunged 8.1%. Tech stocks ($NDX) concluded the week with a 3.7% loss. The S&P 500 high beta index (SP5HBI) shed 7.5%. The S&P 500 low volatility index (SP5LVI) declined 3.5%.

The US Treasury Bond Total Return Index rose 1.4%, due to a flight to quality. The yield on 10-year notes fell 26 basis points and declined to 3.7%. The spot price of crude oil was down 3.9%. Gold on the spot market (@GC) gained 1.1%. Commodities ($CRB) concluded the week down 3.7% with losses across the board. Action in the US dollar was volatile, with the index (USDX) up 0.1% after rising as much as 1.3% earlier in the week.

Year-to-date, tech stocks ($NDX) and the S&P 500 high beta index ($SP5HBI) are up 8.1% and 7.6%, respectively. Crude oil (@WTI) is down 4.4%, commodities ($CRB) are down 4.6%, and the S&P 500 low volatility index ($SP5LVI) has dropped 6.4%.

The ensemble of our six systematic strategies is down 1.9% year-to-date. Our PSI5TF trend-following strategy with 23 futures contracts (long and short) is down 2.3% after gains of about 24% last year.

International Market Performance

All international markets fell this week, except for Vietnam (VNM) and a few markets in the Middle East.

Mexico (EWW) is up 15.2% year-to-date, after finishing up 1.2% last year. Malaysia (EWM) is down 6.4% year-to-date after dropping 6% last year. European markets have rebounded this year, with Spain (EWP) up 11.5%. UK (EWU) is down the least from all-time highs (-6.4%). The Brazil ETF (EWZ) has been the most volatile.

2. Chart Of The Week

At times, tail risk is unexpected, but in the case of SIVB, there were signs that the risk could get worse. Below is a table of daily drops of more than 20% in this stock.

The 60.4% drop on Thursday, March 9, 2023, was the largest, but this stock had a history of large daily drops in the past, including a 23.9% drop on October 21, 2022.

3. Market Performance Recap

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Specific disclaimer: This report includes charts that may reference price target levels determined by technical and/or quantitative analysis. No charts will be updated if the market condition changes affect the charts’ levels and/or any analysis based on them. All charts in this report are for informational purposes only. See the disclaimer for more information.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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