News:
On Wednesday, Stocks opened near flat and treaded water ahead of the much-anticipated Fed announcement.
At 2 PM, the Fed announced a 0.25% rate increase, raising levels to 4.75% – 5%, the highest rate since 2007, before the Great Recession.
The Fed acknowledged the banking crisis … but essentially said they’re not paying it much mind.
- They described the crisis as “Recent developments”
- Their take, “The U.S. banking system is sound and resilient”
- In the end, “The Committee remains highly attentive to inflation risks”
After the announcements, stocks moved generally higher. In the final hour of trading, stocks slipped lower into negative territory. The losses accelerated into the close.
Each of the major indexes closed sharply lower…
- Dow Jones -1.6%
- Nasdaq -1.6%
- S&P 500 -1.6%
- Russell 2000 -2.8%
Sector Round Up
The selloff dragged every single sector lower.
Declining the least…
- Consumer Staples (XLP) -0.9%
- Technology (XLK) -1.0%
- Healthcare (XLV) -1.5%
Finishing at the bottom…
- Consumer Discretionary (XLY) -2.2%
- Financials (XLF) -2.3%
- Real Estate (XLRE) -3.7%
Retail, Real Estate & Financials, the bedrock of the U.S. economy, are underperforming the market.
Technicals:
Despite the selling, the VIX remained below the critical level of 22.50…
It’s tough to get reading at the moment, and that means the market is undecided.
Today we’re updating our stance from bearish to neutral.
With red candles across the market, we are maintaining our short positions. But the restraint in the VIX indicated the market has little fear. And fear is needed for sustained selling.
A few other data points…
- RSI levels are all neutral
- The Put-to-Call Ratio is neutral
Timing:
Today is the three-year anniversary of the bottom of the COVID crash.
In 2020, the S&P 500 ended its 40% decline on this day. Over the next 33 months, it’s gained about 120%…
Your take-home, timelines matter. Always keep the market and your goals in perspective.
Watchlist:
*Low Float
^Open Position
*CRBP support at $6
*JMAC support at $12
*BLPH support at $7
ELEV support at $2
^AEHR resistance at $37
ARAV support at $2.20
^CIFR support at $2, resistance at $2.50
PRQR support at $3.50
DTC support at $6, resistance at $6.80
CDTX support at $1.80, resistance at $2
EMAN on watch
^INDI support at $10
^SQSP support at $28
NVTS resistance at $7
IOT resistance at $18
RELY support at $16
RIOT support at $8
ONON support at $26