On Wednesday, The Fed hiked the federal funds rate by 0.5%. It’s now 4-¼% to 4-½%, its highest level in 15 years.
Then Fed Chair Powell spoke…
- Economic data is “what we expected and hoped for”
- The Fed still wants “more evidence … that inflation is on a … downward path.”
- He noted that the hike of “50 basis points is … a historically large increase.”
- “And we still have SOME ways to go.”
The next FOMC meeting is scheduled for Jan 31 – Feb 1, 2023. Right now, we expect another hike, likely 0.25%.
The indexes reacted strongly to every development on Wednesday … positive before the rate hike, negative after, then bottoming as Powell began to speak…
All four indexes settled with modest losses…
- Dow Jones -0.4%
- Nasdaq -0.8%
- S&P 500 -0.6%
- Russell 2000 -0.6%
Sector Round Up
10 of 11 sectors ended the day lower.
The lone winner…
- Healthcare (XLV) +0.2%
At the bottom…
- Financials (XLF) -1.3%
- Communication (XLC) -1.3%
- Materials (XLB) -1.1%
At this point, the rising support we’ve been tracking is still holding up…
We’re in a wait-and-see mode right now. We’ll provide further analysis after today’s trading session.
We believe there’s a strong possibility that support holds and the market will turn green.
- The VIX fell despite the market weakness
- RSI levels are all neutral
- The Put-to-Call Ratio is oversold
Futures are lower this morning. We’ll judge today by the close, not the open.
Today marks the beginning of the “January Effect,” in which small caps in the Russell 2000 traditionally outperform the rest of the market for the next 30 days or so.
- Ticker Symbol TNA is a 3x leveraged bullish index to consider using for short-term trades.
Friday is the final triple witching of the year. Expect volatility to remain elevated through the next two days.
Today is also a notable anniversary…
On this day in 2020, Bitcoin^ smashed through the $20,000 resistance established in 2017.
- This morning it’s trading near $17,600
- It’s down about 75% from all-time highs set in November 2021
- It’s up 135,000% over the past ten years
*CJJD on watch
*BIVI on watch
*SISI on watch
*CLRO resistance at $1.70
*ACER support at $3
BIMI support at $2.50
CABA support at $6
WNW on watch
SMMT resistance at $4
PBYI support at $4.60, resistance at $5
FLNC support at $20
ACLX on watch
REPL on watch
PHR on watch
RYTM support at $29, resistance at $30
^CROX support at $95
^RYAM support at $8.50
^PRQR support at $1.50
WVE support at $5
TOUR support at $1.5
Secondary watchlist, float over 100 million
MOMO resistance at $9
GOTU support at $2
WDH support at $2.10
MRNA resistance at $200
RLX support at $2.50
TME resistance at $8