News:
Bottoming action continued on Friday. Markets logged decent gains ahead of the 3-day weekend.
- Dow Jones +0.5%
- Nasdaq +0.2%
- S&P 500 +0.6%
- Russell 2000 +0.4%
Markets hate uncertainty, and with Covid cases rising in China, the energy crisis in Europe, and the ongoing war in Ukraine, the market had plenty to hate.
Nonetheless, buyers showed undeterred strength heading into the holiday.
Sector Round Up
All 11 sectors ended Friday higher.
At the top…
- Energy (XLE) +3.2%
- Utilities (XLU) +1.0%
Eking out the smallest gains…
- Healthcare (XLV) +0.1%
- Technology (XLK) +0.1%
The remaining sectors ended the day with gains between 0.5% and 1.0%
Covid & China
Starting January 8, inbound travelers to China will only be required to test negative for Covid 48 hours before arrival.
- Quarantine requirements are set to end
- The Chinese government has downgraded Covid from a “Class A” infection to a “Class B”
Infections have soared as China has pivoted from its “zero-Covid” policy. The Wall Street Journal reports that…
- Emergency rooms across the country are swamped with infected people.
- A health official expects cases to peak around New Year’s Day.
Technicals:
On Friday, while the indexes logged modest moves, The VIX showed a more dramatic drop…
The fear gauge’s attempts to rise have been continually rejected since mid-November.
- The critical level of 25 now appears out of reach
- 22.5 has emerged as the level to watch … for now
This morning futures are higher, and…
- RSI levels are all neutral
- The Put-to-Call Ratio is neutral again … bearish bets have nearly disappeared
Timing:
2023 is now 4 trading days away.
Day 1 of the “Santa Rally” delivered a gain of 0.6% for the S&P 500. We’ll continue to monitor the progress.
- The average return for the Santa rally is +1.3%
- It runs through January 3rd
Watchlist:
*Low Float
^Open Position
*ACER support at $3.50
*EVER on watch
*NINE on watch
CABA support at $7
TERN support at $8, resistance at $9
ORMP support at $10
ORIC support at $5
YQ support at $2
ETNB support at $10
^CROX support at $100
^PRQR on watch
VKTX on watch
WVE support at $5, resistance at $6.50
HUYA support at $3.50, resistance at $4
CPRX support at $18
ARDX support at $2
GOTU on watch