EarningsBeats Digest

Published: Mon, 05/23/22

EarningsBeats.com Digest for May 23, 2022

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Rescheduled for this Thursday, May 26th

Knowing Historical Trends Will Make You A Better Trader

Thursday, May 26th at 4:30pm ET*

About This Event: Tom Bowley, Chief Market Strategist, has been tracking daily S&P 500 performance since 1950. Given his background as a former practicing CPA, Tom spent years analyzing this data to better understand historical tendencies to improve his trading success. In this information-packed webinar, you'll learn:

To differentiate between strong and weak historical periods
To assess the psychological implications of history
To understand the impacts of historical performance on bull markets vs. bear markets
To use all of this information to generate higher profits

This is a members-only event, including those on trial. To join our FREE 30-day trial and reserve your seat, click below. The session will be recorded for those unable to attend live.

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*Please note the change in date. This session was originally announced for Tuesday, May 24th and has since changed.

We're In A Sweet Spot For Health Care (XLV)

I wrote an article over the weekend in the ChartWatchers newsletter at StockCharts.com, discussing the upcoming historical relative strength of health care stocks (XLV). It was titled, "The Brutal Summer Ahead Will Favor Health Care". The sector is enjoying current relative strength and if we see another absolute price decline, it'll likely be accompanied by a positive divergence. Therefore, using any further weakness as possible entry into the sector makes both technical and historical sense. One individual medical equipment stock that I like is Waters Corp (WAT). It's been trending lower the past several months, but this comes after a lengthy uptrend following the pandemic lows. Here's how the weekly chart stacks up:

If the overall market remains weak, then WAT could potentially struggle along with it. But during this market weakness in 2022, we have seen Wall Street favor health care companies, so perhaps WAT continues to outperform vs. the S&P 500 as it has been doing for the past month. This certainly isn't an overwhelmingly bullish call, but if the DJUSAM:SPX ratio (bottom panel in chart above) breaks above those 3 red arrows and to a new relative high in 2022, then a stock like WAT could very well be positioned to benefit from it.

Happy Trading!

Tom Bowley
Chief Market Strategist

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