6/17/22 Fear Wins As Energy Falters & The Swiss Surprise

News:

Just one day after The Fed’s latest interest rate hike extreme fear has demonstrated its unwavering grip on the market.

The Dow Jones, fell 2.4% to finish the day just 487 points above an official bear market.

The S&P 500, Nasdaq, and Russell 2000 each fell deeper into bear markets with declines of 3.3%, 4.1%, and 4.7% respectively.

Internationally, the central banks of England, Switzerland, and Brazil all followed The Fed’s lead to hike interest rates in their respective nations. The Swiss hike was the bank’s first in 15 years and came as a surprise to the market.

As markets fell deeper into the red, the day’s worst-performing sector was Energy.


Photo by American Public Power Assoc. on Unsplash

Russia has slashed the flow of natural gas to the EU as political tensions grow. 

Crude oil rose to $117 a barrel, after falling as low as $112.

The latest unemployment filing numbers showed robust strength in the job market. Still, according to the Wall Street Journal, the economy is facing “weakening output” amid “soaring inflation and climbing interest rates.”

As we enter the long weekend the only positive news came from crypto…

At writing, Bitcoin^ is holding up above the 2017 key support level of $20,000. 

Technicals:

The markets closed Thursday grossly oversold as shown in the put-to-call ratio and RSI levels.

But the chart tells the tale…

The major indexes have resumed their downtrend as you can clearly see in the chart representing the S&P 500 below.


SPY Daily Candles – Chart via thinkorswim

The VIX has yet to break 35. But remains very high indicating the bears are in control.

Futures are up this morning but not in a meaningful way, given the market’s volatility.

Timing:

Today is the year’s second triple witching. Expect volatility to remain high.

After the close, the market will kick off a three-day weekend. The nation’s newest federal holiday, Juneteenth, will be observed on Monday, June 20th.

After the long weekend, just 8 trading days are left in Q2 2022.**

Watchlist:

*Low Float
^Open Position

*EVOK is on watch
*CMRA has resistance at $4
*^AERC has support between $16-18
ADN has resistance at $4
CBIO has resistance at $1.50
GASS has resistance at $4
PBTS has support at $1, resistance at $1.50
^HDSN has support at $9
GLOP has resistance at $7, support at $6
OPTN has support between $3-3.25
LI has resistance at $32.50

**In yesterday’s newsletter we erroneously said that there were 8 trading days left in Q2. As of that writing, there were 10.

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