11/3/22 Powell v Market — Who Blinks First?


Stocks opened lower on Wednesday and slowly rose throughout the day.

At 2 p.m., the Fed announced the expected 0.75% interest rate hike, and the major indexes turned positive.

Then Fed Chair Powell took the stage at 2:30…

Photo of Fed Chair Powell speaking
Image from Reuters

He took a hawkish tone, “Policy needs to be more restrictive,” he said, “ and that narrows the path to a soft landing.”

He left open the possibility of a lower rate hike at the December meeting, “it may come as soon as the next meeting or the one after that. No decision has been made.”

The markets hung on every word … and tanked. 

All four indexes plummeted for the final hour and a half of trading, closing the day sharply lower…

  • Dow Jones -1.5%
  • Nasdaq -3.4%
  • S&P 500 -2.5%
  • Russell 2000 -3.4%

Sector Round Up

All 11 sectors ended Wednesday in the red.

The small losses belong to…

  • Utilities (XLU) -1.0%
  • Financials (XLF) -1.3%

At the bottom…

  • Consumer Discretionary (XLY) -3.8%
  • Technology (XLK) -3.5%
  • Communications (XLC) -2.8%

Notable Names

Cartoon image of Etsy logo with shopping basket near by
Images from Alphr

Shares of Etsy (ETSY) are up 10% in premarket trading

  • The online marketplace reported lower sales
  • But higher fees increased revenues
  • If the gains hold, the company will add more than $1 billion in market cap today


Despite the heavy selling, the VIX barely budged.

Chart of the VIX with key level 25 marked
VIX Daily Candles – Chart via thinkorswim

The fear gauge has been trending toward the key level of 25 for three weeks.

A break lower would be a decisive win for the bulls. But after yesterday’s sell-off, we are reevaluating our bullish stance.

This morning…


In the next 26 hours, the market will get more insights into the labor market.

  • Today at 8:30 a.m., weekly unemployment claims drop.
  • Tomorrow morning we’ll get the latest jobs data & the unemployment rate.

A Note: Digesting the Fed

As markets fell yesterday, the VIX barely budged. I suspect the market markers could have marked prices down to flush out stop-loss selling at critical support levels.

This morning futures are near flat.

We are reserving judgment on the Fed’s latest words until after the close today.

Remember this, amateurs open the market, and the pros close it.


*Low Float
^Open Position

*KLXE support at $15
*^RELL resistance at $24
*NINE support at $5, resistance at $6
SLS resistance at $4
ATNM on watch
ASC on watch
ETNB support at $9, resistance at $10
NUVL on watch
^IMVT support $11
UTHR support at $245
SMCI support at $75
WNC on watch
PCVX support at $42
HRMY support at $55 or $57
PARR support at $21, resistance at $24
RYAM support at $5.50
VIST support at $12.50, resistance at $14
OII support at $13.50
MCRB on watch
HLX on watch
ROL on watch
ELP resistance at $8
GILD resistance at $80

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