5/3/22 Market Rally, The Fed Meets

News:

Monday the markets went on a wild ride.

The S&P 500 sank nearly 2% through the morning and lunchtime. But in the final hour bargain hunters began snatching up discounts and the markets closed solidly in the green.

The Nasdaq was the leader again, advancing 1.6% while the Dow brought up the rear with a respectable gain of 0.3%.

There was no single catalyst to be found.

Here are the notable developments in the world I watching…

Russian President Putin is rumored to be undergoing “cancer surgery” during which time he will be “incapacitated” according to reporting from the New York Post.

And headlines always follow Warren Buffett’s moves … his buying in the first quarter of 2022 is more than we’ve seen in years. Berkshire’s cash pile is the lowest it’s been since 2018.

Bear in mind Buffett is a long-term investor. Despite being 91 years old, his ideal hold time for a stock is “forever.”

Technicals:

The Hammer! The last candle on the chart is a clear hammer which could indicate a reversal.

SPY Daily Candles – Chart via thinkorswim

The Japanese nicknamed the long lower shadow a “power line” according to Steve Nison’s Candlestick book.

The S&P 500 did reach a 50-week low, less than a percentage point from a full 52-week low.

And the put-to-call ratio remained oversold for an 8th day…

Now there are plenty of signs of a bottom. But I’m not ready to get my cash off the bench just yet. The timing isn’t ideal…

Timing:

The FOMC meeting begins today. The two-day meeting will conclude with a Wednesday afternoon press conference at which the newest interest rate will be revealed.

The first of the month is typically a bullish day. So a single rally without a follow-up isn’t much to get excited about…

I’m going to let the market digest the Fed’s latest move before I make another decision…

Watchlist:

*Low Float
^Open Position

^*RCMT is on watch
HCDI has support at $3.20
*RDBX has support at $5
^CYN has support at $4.50
SGML has support at $15
^REI has support at $4
MBII has resistance at $1.15
ARLP has support at $17.50
^CXW has support at $12 and resistance at $13
SU has support at $35
EDU has support at $12

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