5/16/22 Back From The Abyss

News:

On Friday, the markets bounced up from extremely oversold conditions. The tech-heavy Nasdaq led with a gain of 3.8%.

MarketWatch described the mood near the close as “panic-like buying.”

The best catalyst came from overseas where China is seeking to lift the lockdown restrictions in Shanghai. The latest report from Reuters points to a June 1 “return to normal.”

Twitter (TWTR^) fell nearly 10% after Musk declared his takeover bid was placed “on hold.”

Notable winners from Friday’s rally are Affirm (AFRM) +31.4%, Duolingo (DUOL) +34.0%, and Robinhood (HOOD) +24.9%.

Technicals:

Most indicators are neutral. The VIX is still at a relatively high level, which favors the bears.


VIX Daily Candles – Chart via thinkorswim

I’d like to see the uptrend broken just like we saw back in March.

Timing:

It’s still earning season. This week is filled with retail sales. Walmart (WMT) reports on Tuesday, Lowe’s (LOW^) on Wednesday, and Footlocker (FL) on Friday.

See all the most anticipated earnings listed here.

Options expiration is on Friday.

I believe we have reached the bottom. I’m a net buyer for the rest of the summer. My hold times are months long.

Watchlist:

TRMD has support at $11
HDSN
has support at $8
LPG has support at $15
VTNR has support at $12
R has resistance at $85
VERU is on watch
BORR has resistance at $5
STKL is on watch
FRGE is on watch
HRB is on watch
UNM has support at $34

^Open Position

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