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7/19/22 Rejected! (Technically Speaking)

News:

Yesterday markets opened higher and held their gains into the afternoon.

But as lunchtime ended, the indexes erased their gains. The divide between winners and losers was nearly 50/50 … But the large caps dragged the indexes down.

The three major indexes declined about ¾ percent each.

Want a reason? Take your pick…

  • Apple (AAPL) is reportedly “slowing hiring”
  • The Fed might be too hawkish … or too dovish
  • Recession fears
  • And don’t forget, it’s a mid-term year

The sectors closed mixed … But you can find bright spots in there:


Image from Finviz

  • Energy gained more than 2% as Crude settled above $100 per barrel for the first time in about a week.
  • Materials and Consumer Discretionary ended the day modestly higher.
  • The biggest loser was the healthcare sector which gave up all of last Friday’s gains with a loss of more than 2%.

8 of 11 sectors closed red.

The real story came from the tape. Check out the chart below…

Technicals:

We drew the top line in JUNE!

Technicals matter—The market trades on human emotion.

The study of charts is the study of human psychology. Our brains don’t change, so the patterns don’t change.

This is why we track support and resistance levels…


SPY Daily Candles – Chart via thinkorswim

Markets gapped up to resistance and got firmly rejected. The close was at the bottom of a deep red candle.

Why did the market close red? ***It bounced off of resistance.***

This is a TEXTBOOK rejection of higher prices at the exact spot we expected.

Also on our radar…

  • The put-to-call ratio opened overbought but closed oversold
  • RSI levels are unremarkable

Timing:

Netflix (NFLX) reports earnings after the close today.

  • The stock is down about 70% from its high in November.
  • From 2010 to 2020, the stock gained more than 4,000%—making it the best-performing stock of the decade.

Only 9 days until July 28th. When…

  • Q2 GDP data is released (premarket)
  • The FOMC will announce the size of the latest rate hike (afternoon)

Watchlist:

*Low Float
^Open Position

*^FNKO has support at $22
*BRPM has support at $10
CLNN has support at $4
^CBIO has resistance at $1.80
TH has support at $11
SIGA has resistance at $15
CELH has support at $70, resistance at $80
MREO has resistance at $2
RYTH has resistance at $12
VERU has resistance at $16
GOSS has support at $10
PAYO has resistance at $5.50

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