On Tuesday, the stock market had its first trading day of the new year.
Despite morning futures popping as much as 1.5%, the market failed to make any substantial rally intraday.
All 4 indexes closed modestly lower…
- Dow Jones -0.0%
- Nasdaq -0.8%
- S&P 500 -0.4%
- Russell 2000 -0.6%
Beneath the surface, things weren’t so bad. 52% of stocks advanced, while 45% declined.
Sector Round Up
The sectors showed a clear division too. 4 were positive, 1 neutral, and 6 ended in the red.
At the top…
- Communications (XLC) +1.3%
- Utilities (XLU) 0.0%
At the bottom…
- Energy (XLE) -3.5%
The remaining sectors ended within 1% of their previous close.
Tesla (TSLA^) plummeted 12% after missing delivery estimates.
- August 2020 was the last time the stock traded at these levels
- Multiple analysts slash their future expectations
- Since TSLA’s November 2021 peak, it’s lost $950 billion in market cap
- Elon Musk’s personal wealth has declined by more than $200 billion, a world record
Energy Sector drops with Oil & Gas. On Tuesday…
- Oil dropped 4%
- Natural Gas fell 10%
- The surge of Covid infections in China is likely causing the repricing … at least in the short-term
- A winter heat wave in Europe is hurting demand too
The Nasdaq’s triple bottom offered a second chance buying opportunity on Tuesday…
The risk to reward is phenomenal on this chart, and we remain long TQQQ in hopes of a rally.
If the market moves lower will exit for small losses
Our signals are more bearish than we’d prefer. So the trade above is not for the faint of heart…
- The VIX rose above 22.5 for only the second time since November 21
- RSI levels are all neutral
- The Put-to-Call Ratio turned neutral
The FOMC minutes drop at 2 PM today. Watch for added volatility as the market digests the document.
Today is the final day of the “Santa Rally.” As of yesterday’s close, the S&P 500 is clinging to a gain of just 0.1%.
- The average return for the Santa rally is +1.3%
- A positive close today will mark a win for the bulls
Day 1 of 5 for the “Early Warning” is in the books. The S&P 500 is currently down 0.4% for this measure.
*KALA support at $20
*TMBR support at $2
*EVER support at $13.50, resistance at $16
*NINE support at $12
PDSB support at $10
CABA resistance at $10
FREQ support at $3
SMMT support at $4, resistance at $5.50
TERN support at $8
ORMP resistance at $12
ORIC resistance at $6
ETNB support at $10
VATE support at $2
GLYC support at $2.50
^CROX support at $104
^PRQR support at $3
VKTX support at $8
WVE support at $6, resistance at $7
AQMS resistance at $1.20
ALLK support at $8
CPRX support at $18
TGTX support at $10
ARDX support at $2.50
WDH support at $3
IQ on watch