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8/2/22 Follow the Money—Hygiene Rules

News:

Markets kicked off August by retreating from overbought conditions.

All four indexes ended the day in the red, none lost more than 0.5%.

Your top performing sector was Consumer Staples (XLP) which jumped 1.25%.


Photo by George Becker from Pexels

This move was led by Colgate-Palmolive (CL), which rose 3% after reporting better-than-expected earnings last week and receiving a bullish upgrade from Wells Fargo (WFC) on Monday.

Top and Bottom Sectors

Four of the eleven sectors managed to close the day green.

  • Consumer Discretionary (XLY) rose 0.5%
  • Utilities (XLU) and Industrials (XLI) eked out small gains.

The worst sector was Energy (XLE). It continues to be the most volatile sector.

  • The price of crude is trading near $93 per barrel this morning as it looks to hold onto pre-war levels.

Asian Update

The Hang Seng index, which tracks Hong Kong stocks, fell as much as 3% on Tuesday. 


Hong Kong; photo by Jimmy Chan from Pexels

There’s enough blame to go around for those seeking a reason…

  • Real Estate sales in China are down about 40% from this time last year.
  • China’s GDP growth is low among lingering COVID lockdowns.
  • Tensions with the U.S. are growing as “House of Representatives Speaker Nancy Pelosi is expected to visit Taiwan” this week.

Story Stocks

Boeing (BA) rose more than 6% on Monday after receiving “FAA’s approval to restart 787 Dreamliner deliveries.”

Pinterest (PINS) is up about 20% in premarket trading after reporting earnings despite missing expectations.

  • The number of users fell but beat expectations.
  • Elliott Management confirmed a large stake in the company.

Shares of Revlon (REV) more than doubled after a court approved a bankruptcy loan. 

  • The stock closed the day up 90%.

Technicals:

The VIX is on the rise after falling below 25 last month.

We will be closely monitoring that level as the bears begin to push back against the strong buying.


VIX Daily Candles – Chart via thinkorswim

Right now, the bounce looks to be part of the retreat from overbought conditions. But a couple of closes above 25 will force us to reconsider our bullish stance.

This morning…

  • The put-to-call ratio is oversold
  • Most RSI indicators have returned to neutral

Timing:

It’s still earnings season.

Here’s what we’re watching the rest of the week…

  • Uber (UBER) reports in the premarket today.
  • AMD (AMD) & Paypal (PYPL) report after the closing bell.
  • Robinhood (HOOD) reports Wednesday after the close
  • AMC (AMC) reports Thursday after the close

Watchlist:

*Low Float
^Open Position

*MGAM is on watch
*JAKK is on watch
*REV has support at $8
*QRTEB is on watch
*GOVX has support at $3
*FAZE has support at $13
*HKD is on watch
MAXN has support at $15
SMR is on watch
TH has resistance at $14
SWIR has support near $26
PGY is on watch
SIGA has support at $15
AXTI has support at $8
CELH is on watch
RYTM has support at $12
GETY is on watch
VUZI has support at $7.50
FSLR is on watch
EDU has support at $25
ARRY has support at $15
CSGP has support at $70

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