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7/21/22 The Gas is Back!

News:

Yesterday was another day of gains, especially for the “risk on” areas of the market. 

  • The Nasdaq and Russell 2000 posted gains of 1.6% each.
  • The Dow and S&P 500 closed green but with gains under 1%.

Overnight the flow of natural gas from Russia to the EU resumed.


Image from Reuters

The flow stopped for 10 days as part of scheduled maintenance on the pipeline.

The news sent oil futures lower, at writing crude is trading near $96 per barrel, a decline of more than 6% from yesterday’s close.

Sector Update

Yesterday, the top performing sectors mirrored the top indexes…

  • Communications +1.7%
  • Consumer Discretionary 1.6%
  • Technology 1.6%

The Utilities sector was the worst performer for a second day.

Generally, this is what we expect to find in a bull market. The “risk on” sectors are at the top, and the safer, lower volatility sectors at the bottom.

Tesla Earnings & Crypto

Tesla’s (TSLA^) stock is up 2.6% this morning after its earnings call last night.

  • The company posted a $2.3 billion profit in Q2 (ahead of estimates but below the record of $3.3B)
  • It sold about 75% of its Bitcoin^ holdings dues to concerns “about overall liquidity.”
  • Tesla is still holding all its DOGECOIN^.
  • CEO Elon Musk did say, “We are certainly open to increasing our Bitcoin holdings in [the] future.”

Technicals:

The VIX is continuing its meltdown. And that’s a good thing…


VIX Daily Candles – Chart via thinkorswim

The volatility gauge reached its lowest level since late April. It’s clear, at this moment, the bulls are at the helm.

While we understand that anything is possible … Our belief is that the bottom of 2022 is in.

Also on our radar…

  • The put-to-call ratio is in neutral territory
  • RSI levels are neutral but at their highest levels since April (bullish)

Timing:

Snap (SNAP^) reports earnings after the closing bell today. This metaverse play is worth keeping an eye on.

We’re closely watching next week’s news cycle for the next big catalysts…

  • Wednesday afternoon, the FOMC will announce the size of the latest rate hike
  • Thursday, preliminary Q2 GDP data will be released premarket

Watchlist:

*Low Float
^Open Position

*^FNKO has support at $22
CLNN has support at $4, resistance at $5
SMR has support at $11
^CBIO has resistance at $1.80
TH has support at $12
VERV is on watch
SIGA has resistance at $15
CELH resistance at $80
MREO has resistance at $1.80
RYTH has support at $12
NCNA has support at $1.50
MRTN has support at $20
VUZI has support at $7.50
VERU has support at $16
GOSS has support at $10, resistance at $11
CNK has support at $19
PAYO has support at $5.50

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