fbpx

8/11/22 It’s a Bull Market, You Know

News:

Yesterday the Nasdaq Composite:

  • Rallied 2.9% 
  • Closed 20.7% above its June low 
  • Officially entered a bull market
Photo of a bull in a field
Photo by Dylan Leagh on Unsplash

The Russell 2000 also jumped 2.9%… 

  • It’s up 19.3% from its lows
  • Nearing an end to its bear market.

The S&P 500 and Dow Jones gained 2.1% and 1.6%, respectively. Both remain in bear markets … for now.

Inflation Has Peaked

Headline inflation, per the CPI summary, rose 8.5% year-over-year and 0.0% month-over-month.

Bear in mind this is a single data point… 

But it aligns directly with our expectations and that of JP Morgan (JMP).

Here’s their graph. We shared it with you last month too.

Graph showing inflation reading and a project peak in June.

Note the headline … “inflation peaked in June.”

Look to The Fed

The better-than-expected inflation reading paves the way for the Fed to begin easing its aggressive rate hikes.

Markets are pricing in a 0.5% increase next month.

The Fed hiked by 0.75% at the last few FOMC meetings.

Technicals:

April 4th, 2022.

That’s the last time the VIX closed below 20.

Grapg showing the VIX
VIX Daily Candles – Chart via thinkorswim

Futures are on the rise this morning as RSI levels point to overbought conditions.

  • The market needs to cool off. 
  • But with so many bears fighting the trend, the market could squeeze higher first.

Our outlook remains bullish.

It’s a bull market, you know.

Timing:

We are still in the middle of earnings season … keep your eye out for surprises.

The big news items we’re anticipating…

  • Friday 8/12, Univ of Mich Consumer Sentiment
  • Wednesday 8/17, June FOMC minutes release
  • Thursday 8/25, Q2 GDP final number
  • Wednesday 9/21, FOMC meeting conclusion with rate hike announcement

Watchlist:

*Low Float
^Open Position

*FAZE support at $15
AEHR on watch
SUNW resistance at $4
TPIC on watch
COGT support at $12
SIGA support at $20-22
AERI support at $10
ALDX on watch
KOD support at $10
RYTM on watch
TCDA support at $12
VUZI support at $9
RVNC support at $21.50
MRSN support at $6
CYTK support at $50
BLU support at $11
CPRX on watch

Secondary watchlist … +100m float

DVAX resistance at $17.50
ARRY on watch
BFLY support at $6
ABCL support at $12
BNGO support at $2.75
^GERN support at $2

Leave a Comment

Your email address will not be published.