The Blue-Chip S&P 500 index had a dismal year, down 19.4% in 2022, it was the worst performance since 2008. The benchmark index saw one new high in 2022, January 3 with the now infamous January 5 FOMC minutes from the Federal Reserve putting paid to anymore for the year. By comparison the S&P 500 clocked 70 fresh record highs in 2021. Trailing only 1995 with 77 closing highs. Last year energy companies Devon and Marathon were the top two stocks, energy was the strength this year also being the only sector to post annual gains, rising nearly 60%. Last year the SPX was powered by mega-caps Apple (AAPL) Microsoft (MSFT) Alphabet (GOOG) Netflix (NFLX) Meta Platforms (FB) Tesla (TSLA) and NVIDIA (NVDA). This year they were a millstone around its neck.
Tesla the poster children in what difference a year makes for investors. Tesla stock was down ~66% in 2022 and down 70% from its all-time high in November 2021 in its biggest-ever annual decline.
Top Performing Stocks in the S&P 500 for 2022
Oil and natural gas producers and renewable energy companies made some of the biggest gains in the S&P 500, as they did in 2021. Occidental Petroleum (OXY), Hess (HES) and Marathon Petroleum were the top three percentage gainers on the S&P 500.
- Occidental (OXY) rising 117.3% to end at $62.99
- Hess (HES) rising 91.6% to close at $141.82.
- Marathon (MPC) rising 81.89% to close at $63.99
The S&P 500 energy sector rallied 59% in 2022 as oil and natural gas prices surged in the first quarter. Defensive stocks such as shares of utility, consumer-staples and healthcare companies outperformed the broader index.
Worst Performing Stocks in the S&P 500 for 2022
The top S&P percentage losers were the overvalued darlings of the manic 2021 technology ESG and SPAC market. You can see TradersCommunity’s Dribbler Dirty Dozen (DDD) index for some of the pitiful performance, mostly stocks that were examples of dribbler manic crowd behavior having no solid basis for such lofty valuation. Not all are in the S&P 500.
- Generac (GNRC, declined 71.4% to close at $100.66.
- Match Group (MTCH) falling 68.6 to close at $41.49
- Align Technologies (ALGN) falling 67.9% to close at $210.90.
The biggest loser for the year was Generac (GNRC), a maker of backup generators and solar products declined 71.4% to close at $100.66. The company struggled with a higher-than-average inventory in 2022, which is likely to put pressure on revenue next year.
The market swiped left on Match Group (MTCH), the owner of dating app Tinder, was the second worst S&P performer, falling 68.6% to close at $41.49. Match’s decline was part of a broader collapse in technology and digital services companies.
Align Technologies (ALGN) was the third biggest S&P losers, falling 67.9% to settle at $210.90. The maker of 3D digital scanners and aligners used in orthodontics. A clear example of overpriced valuations coupled with inflation hitting demand for niche product, in this case medical services.
Tesla – From hero to Villian
The electric vehicle and battery maker Tesla finished as the fifth worst S&P 500 performer. The Elon Musk-led firm fell 66% to end at $123.18, setting several new 52-week lows through the year. From the icon of green technology, electric vehicle and ESG run by the world’s living genius, it all come back to earth swiftly. There are many facets to Tesla’s stock price collapse, down 65% in 2022, the fact is it is a dramatic fall from grace.
The move up attracted by big, short players such as Jim Chanos and Michael Burry, who were roundly mocked by the bull market geniuses and Tesla cultists. The long trade was very crowded and there were not the buyers sitting there that cultists had expected to support the stock. (That is how cults work, the live in a dream fed by like-minded and why partisan politics are a dangerous affliction when applied to investments.)
What a Difference a Year Makes from Tech to Energy
Last year risk takers pushed the Standard & Powers 500 index to fresh all times highs as vaccine optimism and the prospects of further fiscal stimulus in the US fueled the mood. This year it all came undone, last year’s move accelerated after bottoming out in late March 2020 massive action by the Fed and fiscal stimulus nudged stocks dramatically to close the year just off record highs.
The S&P 500 is weighted by market capitalization and is dependent on the largest five companies, Apple Inc. Microsoft Corp. Amazon.com Inc. Alphabet Inc and Tesla Inc made up 23% of the SPDR S&P 500 ETF as of the close on Dec. 31 in 2021. Even after last year’s declines, the five FAANG stocks have a 13% weighting in the index, down from about 17% at the end of 2021, according to S&P Dow Jones Indices.
S&P Heat Map 2022:
S&P Technical Analysis
The daily SPX on Friday closed out the year right in the sphere of interest at the cloud twist. The market after spitting the 4100 and 38.2% retracement broke through all near support., though managing to capture the Tenkan on the last day of the year. This underscores the power from the SPX spat of June & October lows with impulse through the tenkan and Kijun energized by the daily cloud twist that fueled this rally. The completive wave came off extreme fear and bear that ended with relief. Now we have sated much of the greed phase and short fear phase. We have completed that cycle and from here we measure the alternatives.
Tracing back from highs the fuel from the top of the channel after completing 3 waves off ATH, accelerated after broke the Tenkan through to the 4600 OI where it reversed with impulse back to Tenkan. Bulls, this is likely a (ii) of a 5. Bears this is 1-2 of (i) completive V of degree. We watch if this low was a (iii), (a) or C. We have to respect the number of alternatives of degree of 5. With such trends keep it simple resistance is Tenkan and Kijun and watch for ABC. From no fear to panic is the driving element.
On the downside the Kijun and those June lows now critical and is our trading Bear/Bull pivot in a high vol scenario. Watch each measured 3 wave move on the 240 & Murrey Math highlighted in the podcast. The prices pulled through the downward cloud pulled by the twist ‘helium contusion’ on the completive.
For fractal purposes, SPX completed 5 waves up where it reversed with impulse. Energy fueled from the power impulse down from +1/8 ATH spit of a spit fail. On the way down (just like up) it accelerated after it broke the Tenkan through the rejected Kijun and then through the median after tapping 8/8.
Weekly: In the last week of 2022 we again closed under the Tenkan and 8/8 after the failed rally was rejected at the 50wma and +1/8. Key support is the 38% correction and the previous low. Power came from rejecting the cloud as one would expect in a 3 or C. We have Kijun. the Tenkan and 50wma all above i.e impulse right to the weekly cloud is needed for cycle switching. For that you would have to break the Kijun and 50wma.
We are playing out S&P 500 energy after it held the sphere of influence from Nov 2020 reversed higher after spitting the 38% and key lows. At the time we opined “We do have a weekly cloud twist; however, the energy is waning without sharp impulse.” We got the sharp impulse right to weekly Kijun. For major cycles we watch the S&P 500 over 4,231, the 50% retracement of losses from the Jan. 3 & June 16 close. Since 1950 there has never been a bear market rally that exceeded the 50% retracement then gone on to make new cycle lows. Is this time different, as we tested and spat those June lows?
On the way up each new high evolved after testing Tenkan key support on the way and we are now getting a retest as resistance. We reiterate this needs to be recovered for a resumption of the uptrend meanwhile the bear market plays out. Watch Tenkan this week and watch for Kijun reaction. Extensions are difficult to time, keep it simple.
How Global Indices Fared in 2022
Asia Pacific Region Equity Markets in 2022
- Japan’s Nikkei: (-0.5% for the week/-9.4% for the year)
- Hong Kong’s Hang Seng: (+1.0% for the week/-14.4% for the year)
- China’s Shanghai Composite: (+1.4% for the week/-15.1% for the year)
- India’s Sensex: (+1.7% for the week/+4.4% for the year)
- South Korea’s Kospi: (-3.3% for the week/-24.9% for the year)
- Australia’s S&P/ASX 200: (-0.9% for the week/-5.45% for the year)
- New Zealand’s NZ50: (-0.19% for the week/-11.97% for the year)
North America Region Equity Markets in 2022
- S&P500: (-0.14% for the week/-19.4% for the year)
- Dow 30 (-0.22% for the week/-8.78% for the year)
- S&P 400 Midcaps (-0.22% for the week/-14.50% for the year)
- Small cap Russell 2000 (-0.01% for the week/-21.60% for the year)
- Nasdaq100 (-0.42% for the week/-32.97% for the year)
- Toronto S&P/TSX: (-0.62% for the week/-8.66% for the year)
European Region Equity Markets in 2022
- U.K.’s FTSE 100: (-0.30% for the week/+0.9% for the year)
- Germany’s DAX: (-0.01% for the week/-12.3% for the year)
- France’s CAC 40: (-0.50% for the week/-9.5% for the year)
- Italy’s FTSE MIB: (-0.70% for the week/-13.3% for the year)
- Spain’s IBEX 35: (-0.50% for the week/-5.6% for the year)
From The TradersCommunity Research Desk