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1/31/23 Tested, Your February Outlook

News:

On Monday, markets slid lower ahead of the FOMC meeting, which convenes today.

The selling was controlled but widespread.

Each of the major indexes finished near their lows of the day.

  • Dow Jones -0.8%
  • Nasdaq -2.0%
  • S&P 500 -1.3%
  • Russell 2000 -1.3%

After leading the charge for several days, the Nasdaq dragged the market lower.

Photo by Tima Miroshnichenko from Pexels

The decline was likely driven, in part, by profit-taking after last week’s solid run-up.

Sector Round Up

10 of the 11 sectors ended the day lower.

The lone winner…

  • Consumer Staples (XLP) +0.1%

At the bottom…

  • Energy (XLE) -2.3%
  • Technology (XLK) -1.9%
  • Consumer Discretionary (XLY) -1.7%

Technicals: 

When resistance is broken, it becomes support. The strongest trends will test that support level before moving higher.

SPY Daily Candles – Chart via thinkorswim

The S&P 500 is testing its former resistance. We’re now waiting to see if indeed support holds.

No signal suggests we are heading lower…

Timing:

Heading into its final day of trading, the January Barometer remains positive…

  • At writing, the S&P 500 is up 4.6% since January 1
  • Barring a massive sell-off, January will end in the green

Your February Outlook

As a whole, February is one of the lower-performing months. 

  • It ranks 11 of 12 for S&P 500 returns.
  • Pre-election years fare better. About two-thirds of the time, markets end the month higher.
  • Worth noting …. Trading around President’s Day tends to favor the bears

The news-making days to mark on your calendar…

  • Feb 1, FOMC meeting concludes, new interest rate announced
  • Feb 3, January jobs report
  • Feb 10, U Mich Consumer Sentiment survey
  • Feb 14, CPI inflation data drops on Valentine’s day
  • Feb 16, PPI inflation reading
  • Feb 20, President’s Day—Markets closed
  • Feb 22, FOMC minutes
  • Feb 23, Revised Q4 GDP numbers

Watchlist:

*Low Float
^Open Position

*CUEN on watch
*APXC on watch
*BWEN support at $5, resistance at $6
SY support at $2.50
^AEHR support at $30
CABA resistance at $12
PTGX support at $12.50
TBBK support at $32
APLD support at $3
BZFD support at $2
CBAY support at $7
TOUR resistance at $2.50
SUMO support at $11
TGTX support at $14
AMLI support at $3.30
IQ resistance at $7
TUYA support at $2.75

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