4/29/22 Contraction! Tesla & Amazon

News:

U.S. GDP fell 1.4% in the first quarter according to the “advance estimate” from the Department of Commerce. The contraction came as a surprise with most estimates expecting a gain of ~1%.

The economic contraction is the first since the beginning of the pandemic.

The market’s had little reaction to the news as the indexes climbed higher from oversold conditions. The Nasdaq led the charge gaining 3.1% on the day.

After hours the news kept pouring in…

Amazon (AMZN) reported disappointing earnings and guidance. Shares fell up to 10%, erasing over $140 billion in market cap. At writing the price has stabilized at -8.5%.

Tesla (TSLA^) shares rose about 3.5% after a series of filings revealed Elon Musk had been selling shares of Tesla. According to the filings he sold a little over 4 million shares with about $4 billion.

Musk is likely selling to finance his portion of the $44 billion deal to acquire Twitter (TWTR^).

While there may be more selling yet to be revealed, Musk told his followers on Twitter that he has “No further TSLA sales planned after today.”

The tweet is dated 4/28 while the last filing made public was dated 4/27.

Technicals:

The market bounced off of support yesterday.

You can see a clear triple bottom on the Nasdaq 100 chart below…

QQQ Daily Candles – Chart via thinkorswim

The put-to-call ratio remains oversold for a 6th day.

And the VIX is moving lower from the resistance I predicted in the 30s.

The indicators I’m tracking are showing a bottom.

Timing:

Today is the last trading day of April … The first day of the month is typically bullish.

I remain risk off as we enter summer trading month.

A note on the GDP contraction…

Coming into the year war in Ukraine was not priced into the markets in any regard. The quarterly GDP contraction may be a signal that the worst is over.

Just remember two quarterly contractions are considered a recession.

Watchlist:

*Low Float
^Open Position

*AGRX is on watch
*RCMT has support at $14
*BLBX has support at $5
*ARCH has resistance at $175
^CYN has resistance at $4
NKTX has support at $18
SGML has support at $15
^REI has support at $4
ARLP has support at $17.50
AVT has resistance at $44
SWVL has resistance at $11
^CXW has support at $12.50, resistance at $13
OPCH has support at $30
SU has support at $35

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