2/3/23 You Didn’t Miss The Sweet Spot


Thursday belonged to Meta Platforms (META). 

It rose 23% and added $80 billion in market cap after blowout earnings and announcing plans for share buybacks.

Image from Ethereum World News

Everything META touched rose higher.

The indexes closed mixed…

  • Dow Jones -0.1%
  • Nasdaq +3.3%
  • S&P 500 +1.5%
  • Russell 2000 +2.1%

Mega cap stocks didn’t fare as well. Half of the Dow components ended the day lower or flat.

Sector Round Up

There were strong gains in risk-on sectors. 7  of 11 sectors ended Thursday green.

At the top, led by META…

  • Communications (XLC) +6.6%
  • Consumer Discretionary (XLY) +3.1%
  • Technology (XLK) +2.7%

At the bottom…

  • Energy (XLE) -2.3%
  • Consumer Staples (XLP) -0.9%
  • Healthcare (XLV) -0.7%

Tech Tumbles

After the closing bell, earnings for three tech giants were announced—they all let the market down…

At writing, their respective stocks are all trading sharply lower.

Mashup from Getty Images
  • Amazon (AMZN) -6%
  • Apple (AAPL) -3%
  • Alphabet (GOOG, GOOGL) -5%


The market has risen extremely fast and is now flashing clear overbought signals.

Today’s chart shows the 10-day RSI for the S&P 500…

SPY Daily Candles – Chart via thinkorswim

As you can see, when overbought conditions are reached, a reversal is virtually guaranteed. But the timing is not.

Our advice … Take some profit on riskier positions that have surged higher over the past few days.

Here’s the latest reading…

We now believe a short-term reversal is imminent. However, we are unwilling to trade on the short side because the risk to reward doesn’t offer any attractive trades.


The latest jobs report drops at 8:30 this morning. We’ll have eyes on but don’t expect any big moves as a result.

This morning we want to remind you that we are still in the “sweet spot” in the 4-year election cycle.

This chart provides some historical context for you. Enjoy!


*Low Float
^Open Position

*RVSN support at $1.80
*GNS support at $6
*GAME resistance at $1.75
*UIHC on watch
FLWS support at $12
SY support at $2.50, resistance at $3
^AEHR resistance at $37
TRVG support at $1.80
CABA support at $12
^VERI support at $9
FVRR support at $42
LPG support at $21
WNC support at $26
TBBK on watch
LPSN support at $16
CBAY support at $8
HUYA support at $6

Secondary watchlist, stocks with 100+ million float.

RDFN resistance at $10
EGHT support at $6
SUMO support at $12
RKT resistance at $11
TGTX on watch
WB resistance at $25
OI support at $20
IAS support at $11
HIMS support at $8
PTON support at $15
JBLU support at $9
IQ support at $7
TUYA support at $2.75

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