12/9/22 Buyer Emerge But Inflation Terrifies Everyone


On Thursday, the markets finally managed to attract enough buyers to push all four major indexes to a positive close…

Image from Antique Galleries
  • Dow Jones +0.3%
  • Nasdaq +1.1%
  • S&P 500 +0.8%
  • Russell 2000 +0.5%

Markets were green in light of the 10-month-high jobless claims data. Which fell in line with projected levels.

Buyers claimed the day but failed to dominate it. Beneath the surface…

  • 60% of stocks advanced 
  • 36% declined

Sector Round Up

9 of 11 sectors ended Thursday in the green. 

At the top…

  • Technology (XLK) +1.6%
  • Consumer Discretionary (XLY) +1.0%
  • Healthcare (XLV) +0.9%

At the bottom…

  • Energy (XLE) -0.5%
  • Communication (XLC) -0.2%

Today’s sector read-out reiterates our stance. 

Image from Finviz

Notable Names

Meme stock Gamestop (GME) jumped 11% after reporting disappointing earnings.

  • The stock fell 20% in the three days before earnings.
  • The bottom often hits on news.
  • Investors expected lousy news and got it … Shorts were likely forced to cover since there was nothing new to price in.

Cloud computing company Cloudflare (NET) jumped 11% also.

  • Buyers added about $1.4 billion in market cap
  • The stock has been consolidating near its yearly low for about 6 months.
  • An analyst upgrade earlier this week likely helped drive yesterday’s gains.


Stock traders must be good at drawing lines.

The rising support line we drew in November is holding true. The critical level helped curb the selling that gripped the market during the first three days of the week.

SPY Daily Candles – Chart via thinkorswim

Not much else to report from a technical standpoint…


This morning the Producer Price Index (PPI) report drops at 8:30. It’s one of the last inflation readings we’ll get before the FOMC meeting next week.

  • The market wants to see signs that inflation is easing.

This week opened with more intense selling than we anticipated. But looking at seller motivations, it all makes sense.

December usually opens weak – Tax selling/portfolio rebalancing…

And next week is loaded with uncertainty…

  • CPI on Tuesday
  • FOMC rate hike on Wednesday

Investors likely sold ahead of the big news events to avoid the uncertainty these events bring.

On Monday morning, we’ll recap the PPI and provide an outlook for the exciting week ahead.

Have a great weekend. 


*Low Float
^Open Position

*KWE on watch
*USEA support at $3.70, resistance at $4
*BIVI support at $8
*BBW support at $25.60
BAND support at $24
RXDX on watch
VOR support at $6
SMMT on watch
REPL support at $22
RCUS support at $31
^CROX support at $95
^RYAM support at $8
^PRQR support at $1.40
CPRX support at $16
TOUR on watch

Secondary watchlist, float over 100 million

YEXT support at $6
GEO support at $11
MOMO support at $6 or 6.50
EDU support at $30
INFN support at $7
MNSO support at $12
MLCO on watch
WDH support at $1.80
RLX support at $2.50
TME support at $7

Leave a Comment

Your email address will not be published. Required fields are marked *