5/24/22 Money at the Banks & Getting Sideways

News:

Markets closed in the green across the board yesterday. The Dow Jones was the leader with a gain of 2%.

Financials were the strongest sector. Dow component JP Morgan Chase (JPM) gained more than 6% after providing positive forward-looking guidance.

The energy sector came in second.

Consumer discretionary remained the weakest sector.

After the bell, Zoom Communications (ZM) announced better than expected earnings. Shares popped over 20% in the immediate aftermath. This morning they remain in positive territory up about 6%.

The Wall Street Journal reported that the average age of vehicles on U.S. roads is 12.2 years. That’s a new record.

Chip shortages caused supply issues and demand has remained high. The market forces have priced many would-be buyers out, forcing them to keep driving older vehicles.

Technicals:

Little change from yesterday’s figures.

The put-to-call ratio remains oversold, although now it’s just barely over the line as opposed to the extreme levels the market reached the past two days.

The VIX is holding below 35 still.


VIX Daily Candles – Chart via thinkorswim

The technical picture remains mixed. I suspect the market will continue to move sideways in a choppy fashion for the foreseeable future.

Futures are down this morning, stocks look ready to give up yesterday’s gains already.

Timing:

In 1970 the S&P 500 bottomed on May 27th and closed the year flat.

It is the week before Memorial day. As summer unofficially begins expect more vacations and lower volume in the market.

I don’t believe the market can move much lower. But I’m still not convinced we’re ready for a strong rally either.

Sideways is the market’s third option.

Watchlist:

*Low Float
^Open Position

*AMR has support at $160
TNK
has support at $19
TRMD
has support at $12
CBIO is on watch
^HDSN has support at $9, resistance at $10
LPG has support at $15
PANL has support at $6
GNK has resistance at $26
SIGA is on watch
PBT is on watch
VTNR has support at $14
ESTE has support at $15.50
BORR is on watch
TTI has support at $4.60
HRB has support at $32
UNM has resistance at $37, support at $34
AR is on watch

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