News:
Markets opened Wednesday’s session with little conviction from buyers or sellers.
As the afternoon wore on, the bears finally made a move, and the bulls didn’t put up a fight.
The indexes plunged during the final hour and a half of trading, and all closed the day deep in the red.
- Dow Jones -1.3%
- Nasdaq -1.5%
- S&P 500 -1.5%
- Russell 2000 -1.9%
Sector Round Up
All 11 sectors ended Wednesday in the red also. Some fared better than others.
At the top…
- Communication (XLC) -0.8%
- Energy (XLE) -0.9%
- Real Estate (XLRE) -1.3%
At the bottom…
- Consumer Discretionary (XLY) -1.9%
- Consumer Staples (XLP) -1.9%
- Utilities (XLU) -2.0%
Technicals:
The Dow Jones has finally returned to earth after spending an unheard-of 19 days in overbought conditions.
During the Dow’s time in overbought territory, it gained 7%.
You could have easily lost more than 20% if you took a leveraged short position.
This chart contains an important lesson. The signals we track are merely clues as to what is likely to come. Overbought (or oversold) conditions rarely signal a time to go short (or long). They act instead as an early warning and can indicate a good time to take profits.
Your latest readout…
- The VIX ticked higher but is still relatively low
- RSI levels have all returned to neutral
- The put-to-call ratio is neutral
Timing:
This morning at 8:30, we’ll get the final Q3 GDP estimate. The first two estimates have been higher than anyone expected.
On Friday, PCE inflation data drops.
After the close on Friday, we’ll go into a long weekend. Markets will reopen on Tuesday, December 26th.
Watchlist:
*Low Float
^Open Position
*IMMX support at $6, resistance at $7
*OPFI support at $4, resistance at $4.50
*PLSE support at $11
*SHFS support at $1
ALXO support at $13
CRGX support at $17 / $18
FUSN support at $6
CENX support at $11, resistance at $12
LQDA on watch
ABSI support at $3, resistance at $3.50
ASPN support at $13
PRCH support at $2.25
SCS support at $13
Secondary watchlist—float about 100 million
ESPR support at $2
RKT on watch
GPS support at $20
MOR support at $9
NMRK support at $10
BVN on watch
S support at $26
LYFT support at $13, resistance at $16