6/2/22 Energy Leads, VIX Slides With Markets

News:

Yesterday the market finished another choppy session in the red. All four indexes closed down between 0.5% and 0.7%.

10 of the 11 sectors closed red also. The lone holdout was energy, the top sector for 2022 so far.

The stock of the day was Salesforce (CRM). It closed the day up nearly 10% adding more than $17 billion to its market cap. The work-from-home software stock delivered an earnings beat and received several analyst upgrades.

Despite the second day of selling one key indicator is giving a bullish signal.

Technicals:

The VIX, a measure of volatility in the market, closed lower for the second day in a row.

It’s on a downtrend and nearing a critical support line at 25. See the chart…


VIX Daily Candles – Chart via thinkorswim

A higher VIX favors the bears, while a lower VIX favors the bulls. So despite two days of sideways movement in the markets, the path of least resistance, according to the VIX, is up.

The put-to-call ratio did close in oversold territory … investors are betting against a short-term rally.

Timing:

This morning we will get the latest new unemployment filing numbers. The big jobs report comes out tomorrow. Both news releases happen at 8:30 AM.

I’m not expecting any major fireworks from these news releases, but it’s always worth noting how the markets react.

Markets tend to rally on the first of the month but failed to yesterday.

Taking the mixed signals into account, my current outlook is flat. 

Unless something changes, I expect sideways action for the remainder of the summer, and a big Q4 rally.

Watchlist:

*Low Float
^Open Position

*LPI has support at $90
*AMR
has support at $160, resistance at $180
TNK
has support at $20
CNCE has support at $5
^HDSN has resistance at $10
PANL has support at $6.65
GLOP has resistance at $6
LPG is on watch
SD has support at $21
SIGA is on watch
CTT is on watch
PLAB has support at $20
ESTE has resistance at $20
BORR is on watch
TTI has resistance at $5.50
HRB has resistance at $35.50
CIB has support at $44
UNM resistance at $36.60
AR has resistance at $45

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