On Thursday, the open belonged decisively to the bulls. In the first two hours of trading, the indexes climbed as much as 2%.
Markets peaked around 11 am. Then the bears took over. Most stocks were in the red with just one hour to go in the trading session.
In the final hour, stocks rebounded slightly.
The major indexes closed mixed and mostly near flat, the bulls had a slight advantage…
- Dow Jones +0.2%
- Nasdaq +1.0%
- S&P 500 +0.2%
- Russell 2000 -0.4%
Under the surface, it was tilted towards the bears. 44% of stocks posted gains, while 53% declined.
Sector Round Up
Here’s where things get really interesting…
9 of the 11 sectors ended Thursday lower.
- Technology (XLK) +1.6%
- Communications (XLC) +1.6%
Finishing at the bottom…
- Financials (XLF) -0.7%
- Utilities (XLU) -1.0%
- Energy (XLE) -1.4%
The Consumer Discretionary (XLY) sector ended in the red, -0.1%, but came in third overall.
The “risk-on” sectors were clustered at the top. The top gainers gained more than the biggest losers lost… That’s bullish.
But the fact that 9 sectors finished in the red is bearish.
The Bank of England announced a +0.25% rate hike, following central banks around the globe in the fight against inflation.
Shares of Coinbase (COIN) fell 14% after announcing that the SEC is investigating the company for “violations of the federal securities laws.”
- ^Bitcoin’s price remains strong despite the SEC crackdown
- We maintain that regulation is bullish in the crypto space
The Nasdaq, represented in the chart below, has shown more strength than any other index since the banking crisis began.
Now it’s looking very toppy…
The last two candles have long upper shadows. And a clear double top has formed, that’s a bearish pattern.
Our top data points…
- The VIX popped above 22.50 — bearish
- RSI levels are all neutral
- The Put-to-Call Ratio is oversold — bullish
Today investors must decide how much risk to take on over the weekend.
Last week, the banking crisis accelerated over the weekend. If the markets end green on a Friday, it’s a bullish sign.
Last up is our watchlist. It’s expanding—that’s bullish.
*DHHC on watch
*JMAC support at $12
*BLPH support at $7
^AEHR support at $37
ZURA on watch
ARAV support at $2.20
^CIFR support at $2, resistance at $2.50
ETNB support at $15.50
ALDX support at $8
PRQR support at $3.50
DTC support at $6, resistance at $6.80
ACCD support at $13, resistance at $13.50
EMAN on watch
^INDI support at $10, resistance at $11
^SQSP support at $28
NVTS resistance at $7
IOT resistance at $18
KC support at $5.50
RELY support at $16
RIOT support at $8
ONON support at $28
Adding it all up, we scored 5 points for the bulls and 5 for the bears. The direction remains unclear. We are still short the market.