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6/30/22 Inflation First, Spirit Vote Delayed, & The End of Q2

News:

The major indexes closed Wednesday’s session little changed. The Dow was up 0.3% while the S&P 500 and Nasdaq were off less than 0.1% each.

Under the surface, things looked gloomy … The Russell 2000 fell about 1%.

The sectors were split with about half advancing and half declining. The leading sector was healthcare rising 0.9%. 

At the bottom were Materials which fell 0.7% and Energy which plummeted ending the day with a loss of 3.5%.

Headlines were focused on Fed Chair Powell’s words again…

During a moderated discussion at the European Central Bank’s (ECB) conference in Portugal, Powell said, fighting inflation, “is highly likely to involve some pain but the worst pain would be from failing to address this high inflation.”


Powell (center) talks with ECB President Christine Lagarde (Right) and a moderator. Image from ECB

He’s basically saying inflation risks outweigh recession risks.

In other news, Spirit Airlines (SAVE) has delayed its shareholder vote on the merger deal with Frontier (ULCC). The vote was originally scheduled for today, the new date is July 8 according to a press release.

Bitcoin^ has slipped below $20,000 after fighting to maintain the level for more than two weeks. 

Not a big surprise here … We projected the bottom to hit in August near $12,000.

The big three indexes failed to tell the whole story. The technicals provide a deeper understanding…

Technicals:

Despite the flat performance from the large caps, under the surface selling pressure overwhelmed buyers.

Decliners outnumbered advancers by a margin of 2:1.


Image from finviz

And the put-to-call ratio jumped to extreme oversold conditions again.

This morning futures are falling … all four indexes are down more than 1% each. And the VIX is climbing.

All signals favor the bears as we look to close out Q2…

Timing:

Today is the final trading session of Q2.

Looking at the four-year election cycle Q2 and Q3 of the midterm year is traditionally the weakest spot in the cycle.

So far 2022 has nailed the weak spot expectation.

Don’t expect relief before Q4.

Watchlist:

*Low Float
^Open Position

*FNKO has support at $22
*HMTV has resistance at $8
^CBIO has support at $1.60
CHEF has support at $38
ALT has resistance at $12
KDNY has support at $18
OPTN has support at $3.25, resistance at $3.90
BORR is on watch
LI has support at $38
SGEN has support at $175, resistance at $180

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