Stocks rose on Wednesday ahead of the FOMC minutes release.
At 2 PM the minutes dropped and revealed little new information.
- Higher rates will be around “for some time.”
- After the Fed rate reaches 5% they’ll be looking to “retain flexibility and optionality”
After the minutes came out the S&P 500 stayed within the day’s previously establish range and all 4 indexes closed with modest gains…
- Dow Jones +0.4%
- Nasdaq +0.7%
- S&P 500 +0.8%
- Russell 2000 +0.6%
The “Santa Rally” we’ve been tracking came to an end at yesterday’s close.
- Santa delivered a return of 0.8%
- Below the average gain of 1.3%
- But still a good omen for the bulls
Sector Round Up
10 of the 11 sectors ended the day with gains.
At the top…
- Reale Estate (XLRE) +2.3%
- Communications (XLC) +1.9%
- Materials (XLB) +1.7%
The lone loser…
- Energy (XLE) -0.0%
The energy sector’s decline is mainly due to warmer weather pushing down the crazy high price of natural gas.
Settlement Day: Notable Names
Crypto-related stocks surged after Coinbase (COIN) settled with regulators agreeing to pay $100 million to New York State.
The gains we’re likely due in part to shorts being squeezed out of positions.
- COIN +12%
- Silvergate Capital (SI) +27%
- Marathon Digital (MARA) +24%
Facebook parent Meta (META) was fined ~$414 million by EU regulators for using user information to deliver personalized ads.
- Shares of META rose about 2% after the news broke
- META regularly pays fines for similar actions in the EU
- With some uncertain behind the communications sector is starting to heat up
2023 trading has yet to reveal the market’s first big move of the year.
At writing the market remains in consolidation but has a slight upward trajectory in the short term.
The long-term trend is still down. But we believe there is a strong likelihood of the trend reversing by the end of Q2 or sooner.
Our signals show bears are growing more aggressive but the market’s not showing signs of fear.
- The VIX fell back below 22.5
- RSI levels are all neutral
- The Put-to-Call Ratio returned to oversold
We are maintaining our bullish outlook.
Weekly unemployment filings drop at 8:30 this morning.
- Not expecting any fireworks from that report but it’s good to key an eye on it.
Tomorrow we’ll get the latest Jobs Report.
- This will likely jolt the market in some fashion.
Day 2 of 5 for the “Early Warning” is in the books. The S&P 500 is currently up 0.4% for this measure.
*KALA on watch
*TMBR support at $2
*EVER support at $13.50, resistance at $16
*NINE support at $12
PDSB support at $10
CABA support at $10
FREQ support at $3
COLL on watch
SMMT support at $4, resistance at $5.50
TERN support at $8
ORMP resistance at $12
EH support at $10
MUX support at $6
ORIC resistance at $6
VATE support at $2
^CROX support at $104
^PRQR support at $3
WVE support at $6, resistance at $7
ALLK support at $8
CPRX support at $18
Secondary watchlist, float 100+ million
TGTX support at $10
QFIN support at $0
JEF support at $38
ARDX support at $2.50
BBWI support at $45
DADA support at $8
WDH support at $3, resistance at $3.35
IQ on watch
GERN support at $3