News:
Estimated annualized GDP growth in Q4 of 2022 came in at 2.9%.
In short … People are still spending money, and a recession is becoming less and less likely.
After the data was released, the markets lurched higher, traded mostly in the green, and closed at their highs.
- Dow Jones +0.6%
- Nasdaq +1.8%
- S&P 500 +1.1%
- Russell 2000 +0.7%
The Nasdaq led. It was pulled higher by Tesla (TSLA^), which surged 11% after solid earnings.
The icing on the cake came from the latest unemployment claims. Despite the headlines about tech layoffs, new unemployment claims fell again to 186,000 last week—the lowest level in months.
Sector Round Up
There was barely a bear to be found on Wall Street. 10 of 11 sectors ended the day higher.
At the top…
- Energy (XLE) +3.2%
- Consumer Discretionary (XLY) +2.1%
- Technology (XLK) +1.6%
The lone loser…
- Consumer Staples (XLP) -0.4%
Technicals:
The S&P 500 broke out yesterday and even bounced off the former resistance level confirming that it is now acting support.
As we said yesterday, “a breakout is inevitable.” We remain long SPXL.
Our main signals…
- The VIX continues to trend lower.
- The Put-to-Call Ratio is neutral
- RSI levels are all mostly neutral, the Nasdaq is now overbought
Timing:
As we finish up the last full trading of January, we are keeping close tabs on our final early-year indicator…
The January Barometer remains positive…
- At writing, the S&P 500 is up 5.6% since January 1.
The next FOMC meeting is next week. What happens there could trump the technicals and timing we are watching. For now, we remain bullish.
Have a great weekend!
Watchlist:
*Low Float
^Open Position
*APXC support at $4
*BWEN support at $5, resistance at $6
SY on watch
VERA support at $8
^AEHR support at $30
BOOT support at $76
SDRL resistance at $41
DPRO support at $1.40
LX support at $3.25, resistance at $3.50
PTGX support at $13
^CROX support at $120
CBAY support at $7
TOUR support at $2.50
SUMO on watch
TGTX support at $14
WB support at $22.40
AMLI support at $3.30