News:
Markets soared on Tuesday after the latest CPI report revealed headline inflation has returned to a “normal” zone.
Check out the 20-year chart…
- Month-over-month prices were unchanged
- Year-over-year prices rose just +3.2%
For reference, last month’s increase was +3.7%.
The major indexes ended the session sharply higher…
- Dow Jones +1.4%
- Nasdaq +2.4%
- S&P 500 +1.9%
- Russell 2000 +5.4%
Our seasonal swing position in the ETF Small Cap Bull 3X Shares (TNA) returned 16.5% yesterday.
Sector Round Up
All 11 sectors posted gains on Tuesday.
At the top…
- Real Estate (XLRE) +5.4%
- Utilities (XLU) +4.0%
- Consumer Discretionary (XLY) +3.4%
At the bottom, the only sectors to add less than 1%…
- Energy (XLE) +0.9%
- Healthcare (XLV) +0.7%
Technicals:
The Real Estate sector (XLRE) soared the most yesterday. And this morning, it’s at a critical resistance level.
While there is no single catalyst driving yesterday’s surge… a combination of the lower inflation and a ground-breaking verdict that seeks to limit commissions for agents are the most obvious culprits.
We’ll be watching for the XLRE to break through and retest the marked level.
Two stocks that were added to the watchlist are related to the Real Estate sector. They are marked with an (RE) below.
Your latest readout…
- The VIX is near 52-week lows
- RSI levels are now mostly overbought
- The put-to-call ratio is neutral
Given the overbought conditions, expect some sideways action or even a reversal in the coming days.
Timing:
This morning at 8:30, the PPI report drops.
It’s unlikely to cause a big stir, but worth keeping an eye on.
A friendly reminder … November is the BEST month for stocks.
Watchlist:
*Low Float
^Open Position
*DRCT support at $4.50
*SHOT on watch
*ACIC support at $9 (RE)
TOI support at $2.25, resistance at $2.50
^WRAP support at 2.75, resistance at $3
DUOL on watch
METC resistance at $20
RYTM on watch
ALKT support at $22
TLS support at $4
Seconard watchlist—float about 100 million
NMRK support at $7.50 (RE)
AFRM support at $24
KD support at $17, resistance at $18
PINS support at $32