5/4/22 When the Fed Speaks

News:

Markets moved sideways yesterday as the Fed began its two-day FOMC meeting.

At the close, all of the indexes were in positive territory. The Russell 2000 led the way with a gain of 0.8%.

Earnings reports continue to pour. Some positive like Advanced Micro Devices (AMD) rising 6% on a positive report.

But disappointing earnings have led to big declines in stock prices. For example, Lyft (LYFT) is down more than 25% in pre-market trading.

Technicals:

The put-to-call ratio is oversold for a 9th day, as investors continue to bet against the rally.

The VIX reached resistance at fell back to a more normal level. See the chart below…

VIX Daily Candles – Chart via thinkorswim

We can look at charts all day but the real story is in today’s press conference…

Timing:

Fed Chair Powell is scheduled to take the stage at 2 p.m. and deliver the latest interest rate hike. The market will try to figure out what’s in store for June’s meeting.

Today a 0.5% increase is expected.

I expect some volatility afterward 2 p.m. The close will provide a better signal of the market’s direction.

Watchlist:

*Low Float
^Open Position

^*RCMT is on watch
*HCDI has support at $3.20
CVI has support at $29
NKTX has resistance at $20
SGML has support at $16
TWI has support at $5.50
^REI has resistance at $5
BORR is on watch
ARLP has support at $17.50
TTI has resistance at $4.50
^CXW has support at $12 and resistance at $13
CC is on watch
^DVN has resistance at $65
SU has support at $35
EDU has support at $12

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