Markets opened deep in the red yesterday but closed near flat after buyers scooped up perceived discounts.
While testifying before a Senate panel, Fed Chair Powell said a recession is “not our intended outcome at all, but it’s certainly a possibility.”
Fed Chair Powell; Photo by Win McNamee from Getty Images
He admitted that tamping down inflation is “very challenging” and the global energy crisis has made it “more difficult for us to achieve what we want.”
The market took his words in stride as much of the negative sentiment appears to have already been priced in.
Real Estate and Healthcare we the day’s top-performing sectors gaining about 1.5% each.
And, once again, Energy was the worst, declining 4% as oil prices inch lower towards $100 per barrel.
The oversold conditions the market started the week with are gone.
Although the put-to-call ratio shows that investors are betting against a rally…
But the bulls are showing some signs of strength.
As you can see on the chart below markets have closed well off of their lows for the past six trading days.
SPY Daily Candles – Chart via thinkorswim
And strong interaction with resistance/support levels is usually a sign the bulls are trying to take control.
We can’t definitively call a bottom yet but we expect one in the nearish future…
Six trading days remain in Q2.
The latest unemployment filing numbers drop at 8:30 this morning. If the labor market starts to show signs of weakness the likelihood of a recession increases.
As long as new filings stay in check, near 200K, the odds of a recession remain low.
*CMRA has support at $4
HNRG has support at $6.50, resistance at $7.50
CBIO has resistance at $1.50
PBTS has support at $1, resistance at $1.50
^HDSN has support at $9, resistance at $10
COGT has support at $9, resistance at $10
KDNY has support at $18
OPTN has support between $3-3.25
LI is on watch
SGEN has support at $160