3/8/23 Prepared to Flip


The Market kept careful tabs on every word Fed Chair Powell uttered to Congress on Tuesday.

He opened with prepared remarks and said, “interest rates [are] likely to be higher than previously anticipated.”

Image from the Yorkshire Post

After those words, buyers stopped buying, and sellers went on the offensive.

Each of the four major indexes posted a steep decline…

  • Dow Jones -1.7%
  • Nasdaq -1.2%
  • S&P 500 -1.5%
  • Russell 2000 -1.1%

Sector Round Up

The bulls failed to make any gains on any front. All 11 sectors ended Tuesday lower.

Declining the least…

  • Consumer Staples (XLP) -1.0%
  • Communications (XLC) -1.0%
  • Technology (XLK) -1.2%

Declining the most…

  • Materials (XLB) -2.0%
  • Real Estate (XLRE) -2.5%
  • Financials (XLF) -2.6%

Bulls or Bears

One could make a case for either the bulls or the bears right now. Here’s how we see it…

For the bulls…

  • Timing—It’s a bullish time of year & in the 4-year election cycle
  • Earnings Winners—Good stocks/stories are still being rewarded
  • Fear—The VIX shows very little fear

And for the bears…

  • The Fed—Higher interest rates can hurt the economy
  • The Chart—Yesterday’s selloff showed little regard for important support levels


The S&P 500 has one last important level to hold…

SPY Daily Candles – Chart via thinkorswim

The rising support is a last stand for the bulls—they had the momentum going in.

Our seasonal swing stop is under the marked line. If this rising support level fails, we’ll be booking profits and looking to flip bearish.

For now, we’re waiting for the market to tell us we’re wrong.

This morning…


Powell heads back to Capitol Hill again this morning.

At 10 am, Fed Chair Powell will sit before the U.S. House Financial Services Committee for its Semiannual Monetary Policy Report to the Congress.

The market will once again hang on to every word. You can find the live broadcast here.


*Low Float
^Open Position

*BLPH on watch
*AMAM on watch
*BLBX support at $1
*RRGB support at $10.50
*XPOF support at $28
AMPY resistance at $10
NRDS support at $20
PTGX support at $18
WW support at $6
DKS support at $140
LVO support at $1.20
INDI support at $10.50
SQSP support at $25

Secondary Watchlist, float 100+ million

IOT on watch
BBIO on watch
^SLQT support at $2.50
ZETA support at $10
STGW on watch
NEO resistance at $18
NGL support at $3.60
RELY support at $15
ARDX support at $3.50
NAT support at $4
GOTU resistance at $4.50
BGCP on watch

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