1/18/22 Earnings Season Arrives, Markets Fall Below Support

Hello! Here’s what’s happening in the market today…

News:

Earnings season is here. Banks will take the lead with GS, BAC, and MS reporting today and tomorrow. Later in the week AA and NFLX will give us some insights into travel and tech.

Inflation concerns remain the lead problem for the markets. The 10-year bond jump above 1.8% this morning. That’s a 2-year high.

Calls for the Fed to raise rates are growing louder. Hedge fund manager Bill Ackman wants a big increase to “shock and awe the market.”

Technicals:

Futures are down across the board. The SPY is sitting just above support. The NASDAQ and the Russell 2000 are below support.

But I’m not as concerned about how the market opens. My focus will be on how it closes.

Watch for the rising support level to hold. A close below this critical level could spell bigger trouble for the market.

QQQ 1-day candles – Chart via thinkorswim

My indicators don’t look bearish yet:
The VIX continues to stay rather low.
And the put-to-call ratio is clearly oversold.

Generally, the market’s in a position for a bounce but after last week’s failed rally the chances of a correction or bear market are increasing.

Timing:

As January goes so goes the year.

So far 2022 has been rough. If support fails today there is no clear bottom in sight.

We’ve already received an “early warning” when the first five days of the year failed to produce a profit. There are ten trading days left in the month. I’m not looking to get ahead of myself just yet.

Today I’m in a wait-and-see mode. Let’s see how things shake out. Hold on to your hat … it might be a wild ride.

Watchlist:

*Low Float
^Open position

*IMTE has support at $7.50
*RELI has resistance at $10
SBEV is on watch
DWAC has support at $65
KBH is on watch
^F has support at $25

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