12/6/22 Oil Plummets, The Sellers We Saw Coming


The buyers that propped up the market at the end of last week disappeared on Monday.

Image from Adobe

All four indexed closed deep in the red…

  • Dow Jones -1.4%
  • Nasdaq -1.9%
  • S&P 500 -1.8%
  • Russell 2000 -2.8%

Sector Round Up

All 11 sectors ended Monday in the red too.

Falling the hardest…

  • Consumer Discretionary (XLY) -3.0%
  • Energy (XLE) -2.9%

Giving up the least ground…

  • Utilities (XLU) -0.6%
  • Real Estate (XLRE) -1.0%

Energy Buckles

The price of Crude Oil rose about 3% in premarket trading yesterday morning.

Image from Wikipedia
  • The EU set a $60 price cap on Russia’s output
  • China is easing its harsh zero-Covid policy
  • OPEC reaffirmed its previously-planned supply cuts

To recap, that’s higher demand and lower supply … the price should rise.

But it didn’t. Crude oil fell $3, closing nearly 4% lower and down 7% off its early morning highs.

We’ll have eyes on this market as it’s behaving oddly.

The Sellers We Saw Coming

Headlines blamed today’s broader selloff on fears of rate hikes by The Fed … really?

We know early December is usually weak as individuals start to take tax losses and institutions rebalance their portfolios.

The magnitude of yesterday’s selling was a little surprising, but it didn’t cause us to abandon our theory.

  • We still expect a 0.5% rate hike next week. 
  • Our outlook remains bullish.


The VIX rose about 8% but closed below that rising line of support we drew last week. Watch for support to become resistance.

VIX Daily Candles – Chart via thinkorswim

At this point, the selling is in line with the weak open we expected this month.

With no warning signs flashing, we’re maintaining our bullish outlook…


Georgia’s Senate runoff election will conclude this evening. 

While headlines are sure to make dramatic points about the results, we suspect the market doesn’t care.

  • Congress is already split. 
  • If the Democrats win, they’ll be able to push through a few more judges … That’s not likely to rattle the markets.

At writing, futures are in the red near flat.


*Low Float
^Open Position

*USEA support at $3.70
*YMTX resistance at $2.20
*ATAT support at $16
*BBW support at $22
BAND resistance at $24
PDSB support at $9
WNC resistance at $26
RCUS support at $31
^MANU resistance at $23
FIVE on watch
GRWG support at $7
^CROX support at $95
^RYAM support at $7, resistance at $8
PRQR resistance at $1.40
BLUE support at $8
CPRX support at $16
YEXT support at $6
GEO support at $11
MNSO support at $11
WDH support at $1.80
RLX support at $2.50
TME on watch

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