February 13, 2022

Thursday's worse-than-forecast print of the consumer inflation report pulled the rug out from under a budding contra-trend rally, as the bond market was quick to discount further Fed tightenings later this year.

Amid the fire and the smoke of Thursday and Friday's 4.8% mauling of the Nasdaq, a positive emerged, though you had to squint to see it.

Aggressive growth, though lower, held up better than expected.

Specifically, on Friday the Nasdaq lost 2.8% vs. ARK Innovation's (ARKK) -2.5%, the median software stock's -2.7%, the Russell 2000's -1.01%, and a broader market that held up better than losses in the S&P and Naz.

Otherwise, if a rally presents itself this week, we will look to position in one of the inverse ETFs, which did not give us an opening last week that met our criteria. Last week was instructive as it presented the initial separation of the wheat -- the tennis balls -- from the chaff, the broken eggs.

At the moment, there is nothing for us to do besides protect capital and be thankful that we learned how to do that from Bill O'Neil.

Kevin Marder