Markets surged higher again on Friday … closing out a 4th consecutive week of gains.
The Russell 2000 gained 2.1% and closed 22.2% above its lowest close of the year … Officially ending its bear market.
The Nasdaq, also logging a gain of 2.1%, met the definition of a bull market last week.
The remaining indexes logged gains but remain in bear markets.
- S&P 500 +1.7% (+16.7% above June’s lowest close)
- Dow Jones +1.3% (+13.0%)
All 11 sectors ended the day in positive territory. At the top…
- Consumer Discretionary (XLY) +2.2%
- Technology (XLK) +2.0%
At the bottom…
- Consumer Staples (XLP) +0.9%
- Energy (XLE) +0.8%
Headlines We’re Watching
The “Inflation Reduction Act” is on its way to President Biden for a signature. The bill, according to the Democrats, is designed to:
- “Fight inflation” with “deficit reduction”
- “Expands medicare benefits”
- “Reduce carbon emissions by roughly 40 percent by 2030” with a $369 billion investment in “Energy Security and Climate Change”
- Solar stocks have been outperforming … See the watchlist below for our favorites.
Consumer Sentiment continues to improve…
- The Univ of Mich said it’s “about 5 index points above the all-time low reached in June.”
- Expectations among “low and middle income consumers” were notably higher.
Meme Stock Mania
- Bed Bath & Beyond (BBBY^) rose 21% on Friday … It’s up 184% over the past three weeks.
- AMC Entertainment (AMC^) is up 71% over the same 3-week period.
- The Wall Street Journal reported retail investors poured an average of $1.35 billion into the market daily in August.
- Retail’s top pick is Tesla (TSLA^). The stock is up more than 30% from its July low.
The VIX closed at its lowest level since April (bullish), and the put-to-call ratio is neutral.
The signals don’t agree…
Despite the overbought conditions, it appears the bears have little advantage.
This week we’ll get a look at retail earnings for Q2…
- Walmart (WMT) reports Tuesday premarket
- Home Depot (HD) Tuesday morning
- Target (TGT) Wednesday morning
- Lowe’s (LOW^) Wednesday morning
- Kohl’s (KSS) Thursday morning
- Foot Locker (FL) Friday morning
*VEEE on watch
*VRNA resistance at $14
MAXN support at $20 ← SOLAR
AEHR resistance at $18
SUNW support at $4 ← SOLAR
COGT support at $14
SIGA support at $22 ← SOLAR
ALT on watch
AERI resistance at $12
KOD support at $10
LQDA resistance at $8
RYTM support at $20
TCDA support at $12
RAD support at $10
VUZI support at $10
VERU support at $18
RVNC support at $21
MRSN resistance at $8
PAVM support ta $2
CPRX on watch
Secondary watchlist … +100m float
PCT support at $10
DVAX support at $16
ARRY resistance at $24 ← SOLAR
BFLY on watch
ABCL support at $12
BNGO support at $3
^GERN on watch