Need to Know: FAANGs ain’t what they used to be, so beware the bear-market bounce says this hedge fund manager

by | Aug 1, 2022 | Stock Market

It’s been some rally. The S&P 500
is starting the week at a seven-week high, bolstered by hopes for a less hawkish Fed and a sense that earnings pessimism was overdone. The benchmark stock index is up 12.6% from the recent low hit md-June, having delivered its best July performance since 1939, according to Dow Jones Market Data. Last week’s 4.2% pop took it through resistance at 4,000, moving further above its 50-day moving average in the process. And so on.

But, naturally, some are not convinced. With the S&P 500’s relative strength index now at 74 and in “overbought” territory, bearish short-term traders may be expecting a bit of a pull back. And Kevin Smith, chief investment officer at hedge fund Crescat Capital, thinks the problems are greater than just an over-extended momentum gauge. “Last week looked like short-seller capitulation to us for the market at large and in mega-cap tech stocks in particular. Crescat is not capitulating at all. There were many ‘buy-the-news’ headlines that could mark the peak of yet another bear market rally,” Smith says …

Article Attribution | Read More at Article Source

Share This