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4/22/22 Failed Follow-up

News:

Yesterday markets failed to follow up on Wednesday’s gains. After gapping up the indexes faded all day long.

Elon Musk still wants to buy Twitter (TWTR^). In a filing released yesterday, he announced financing “commitment[s] … to provide … approximately $46.5 billion” for his take-over bid.

The board still doesn’t seem interested but users on Twitter appear to favor Musk. If shareholders get to vote on the merger I expect it to pass.

Technicals:

The Dow fell back below its support line.

DIA Daily Candles – Chart via thinkorswim

But the bulls still do have room to rally…

The VIX remains below 25, the level I’ve been watching all week. And the put-to-call ratio closed oversold suggesting shorts could get squeezed and the markets could move back higher.

However, the failed breakouts and lack of follow-through are giving me pause.

I can’t tell if this is a bear trap or a bull trap so at the moment I’m remaining risk off and mostly on the sidelines.

Timing:

Just six days of trading left in April, the best month for stock.

When the market has every opportunity to rally be fails to it’s not a great sign for the bulls.

I’ve cut my watchlist as the market works to sort itself out…

Watchlist:

*Low Float
^Open Position

*BLBX has support at $4
*MDVL has resistance at $3
*AMR is on watch
TRVI has support at $3
TH has support at $6
AMPY has support at $7
^SGML has support at $15, resistance at $18
FPI has support at $15
CAR has support at $300
REI has support at $4
CRGE has support at $7
BTU is on watch
CXW has support at $13
^TWTR has support at $45

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