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7/12/22 From Russia With No Love

News:

Markets fell yesterday. The Nasdaq and Russell 2000 shed more than 2% each.

Buyers managed to push the Dow into positive territory for a brief moment but were unable to sustain it. The Dow closed down 0.5%.

9 of 11 sectors ended in the red. The holdouts:

  • Utilities with a gain of 0.6%
  • Real Estate—barely above flat

Russian Gas

Fears of a new energy crisis in Europe were the primary drag on the market.


Photo by Amar Preciado from Pexels

Russia shut down its natural gas pipeline, which flows to Germany, for maintenance. It’s expected to come back online in 10 to 14 days.

Russia is upset with the western sanctions … and there is no guarantee they’ll turn the flow back on.

Tech Stocks


Photo by Prateek Katyal from Pexels

The Nasdaq was dragged down by a few notable tech stocks…

  • Meta Platforms (META) fell 4.7% after an analyst downgrade
  • Twitter (TWTR^) dropped 11.3% after Elon Musk abandoned his takeout bid
  • Tesla (TSLA^) slid 6.6% on Musk’s coattail

The Communications sector was the day’s worst performer, losing over 3%.

Technicals:

Yesterday we noted the VIX broke down … But that level failed to hold.

After breaking through some resistance last week the S&P 500 failed its next test.

As today’s chart shows, the Nasdaq also failed to break a meaningful resistance area.


QQQ Daily Candles – Chart via thinkorswim

Other indicators are unchanged…

  • The put-to-call ratio is neutral
  • RSI levels are unremarkable

All things considered, the current outlook is bearish.

But the bulls aren’t throwing in the towel…

The market is waiting for a reason to move … It’ll likely have to wait until tomorrow though.

Timing:

The headline-making CPI inflation reading is due out on Wednesday morning before the open.

And earnings season is about to get started. 

Some notable earnings we’ll have eyes on this week:

  • Delta Air Lines (DAL) reports Wednesday premarket
  • JPMorgan Chase (JPM) reports Thursday premarket
  • Morgan Stanley (MS) reports Thursday premarket

Watchlist:

*Low Float
^Open Position

*USEA is on watch
*TRVI has support at $3.50, resistance at $4
*FNKO has support at $22
^CBIO has resistance at $1.80, support at $1.60
TH is on watch
PLRX is on watch
WVE has support at $4
^ALT has support at $12
CELH has support at $75
JKS has support at $70
VERU has resistance at $16
^CTIC has support at $6.50
CLVS has resistance at $4
SGEN has resistance at $180

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