News:
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
Technicals:
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.
Timing:
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.
Watchlist:
*Low Float
^Open Position
*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