News:
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.
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.
- Amazon (AMZN) -6%
- Apple (AAPL) -3%
- Alphabet (GOOG, GOOGL) -5%
Technicals:
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…
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…
- The VIX rose slightly but remains in a downtrend
- The Put-to-Call Ratio is neutral
- RSI levels are overbought for all major indexes except for the Dow Jones
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.
Timing:
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!
Watchlist:
*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