5/4/23 The Fed Is Done! Maybe


Markets opened green on Wednesday ahead of the latest FOMC decision.

At 2 PM, the market cheered the latest announcement

  • The Fed increases its benchmark interest rate by +0.25% to 5.00% – 5.25%
  • Language about future increases was removed from the official statement
  • In prepared remarks, Fed Chair Powell said the rate may be high enough

After Powell left the stage, the markets got a rug pull.

Image from CoinDesk

The indexes went from green to red and closed at their session lows…

  • Dow Jones -0.8%
  • Nasdaq -0.5% 
  • S&P 500 -0.7%
  • Russell 2000 +0.4%

Note the Russell 2000 held onto some of its gains.

Under the surface, the bulls showed some fight… 42% of stocks finished the day higher, and 54% were lower at the closing bell.

Sector Round Up

All 11 sectors ended Wednesday lower.

At the top…

  • Healthcare (XLV) -0.1%
  • Utilities (LXU) -0.3%
  • Industrials (XLI) -0.4%

At the bottom…

  • Materials (XLB) -1.1%
  • Financials (XLF) -1.1%
  • Energy (XLE) -1.9%

Banking Blunders

The banking crisis has yet to be resolved.

Photo by The Wall Street Journal

The latest victim is PacWest Bancorp (PACW) which fell 60% in after-hours trading following an “update” issue via press release.

According to the update…

  • The bank is considering “asset sales”
  • It’s evaluating “all options to maximize shareholder value”

This morning PACW shares are down just 40% from yesterday’s close. And 85% from itd pre-crisis levels.


The VIX moved into no-man’s-land during yesterday’s session.

Between 18 and 20 is essentially neutral for the fear gauge right now…

VIX Daily Candles – Chart by thinkorswim

Keep watch on the VIX during today’s session.

Right now, the market is trying to make sense of a lot of information. Just remember the close is far more important than the open.

Until then, here’s our latest reading…


Tomorrow is the latest jobs report drops at 8:30.

Until then, keep an ear to the ground as earnings reports continue to pour in.

We’ve added more stocks to our watchlist today than at any point in recent history.


^Open Position

ELEV support at $3
BZH support at $18
QTRX support at $15
PLX support at $2.80
APLT support at $1.60, resistance at $2
COCO support at $22
AVDL on watch
PRTA support at $65
SMCI support at $120
SKYW on watch
AQST support at $1.60
LVO support at $1.40
SA resistance at $14
^TDUP support at $2.40
^CBAY support at $10

Secondary watchlist—float 100+ million

TIO support at $2.40
MDGX support at $4.50
TGTX on watch
BLDR on watch
RIOT support at $10, resistance at $12
HIMS support at $10.50, resistance at $12
IMGN on watch
UBER support at $36

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