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8/26/22 The Stage is Set!

News:

The first release of Initial Unemployment filings fell below 250,000 for the first time in a month.

The report put wind in the market’s sails. And the bulls dominated. 

74% of stocks posted gains … only 22% declined on Thursday.

The indexes surged higher…

This morning futures are down as the world waits for Fed Chair Powell to take the stage.

Scenic image of Jackson, WY
Image of the Tetons mountains in Jackson, WY, from Wikipedia
  • He’s scheduled to speak at 10 am (eastern) at the annual Jackson Hole Economic Symposium.

The market will hang on every word he says as he provides clues about future rate hikes and/or easing.

Your best bet:

  • Watch the market’s reaction, not the speech.
  • Remember this … The market loves Powell.

Sector Roundup

All 11 sectors ended the day green for the second day in a row.

  • Materials (XLB) led (again) with a gain of 2.3%
  • Consumer Staples (XLP) was at the bottom with a respectable gain of 0.5%

Social Stocks

Pinterest and Twitter logos
Image from MarketWatch

Shares of Pinterest (PINS) climbed 14% yesterday after a Bloomberg report said the company is facing an “investigation by California Civil Rights Agency.”

  • The self-described “visual discovery engine” is up 33% over the past month.
  • But down 57% over the past year.

Shares of Twitter (TWTR^) have gone almost dormant (+0.6%) as Elon Musk’s feud with the company continues.

  • Musk and Twitter agreed to a sale in April.
  • Since then, Musk has tried to back out of the deal, and Twitter is suing him.
  • Yesterday a judge order a limited release of user data calling Musk’s request “absurdly broad.”

Technicals:

The VIX tells the story.

Yes, there was selling. Yes, there were bearish signals that made us question everything.

But the VIX didn’t falter. It continues to hold below the key level of 25.

VIX Daily Candles – Chart via thinkorswim

As long as the VIX is below 25, the bulls have the upper hand.

Timing:

Today will end the last full trading week of August.

September is the last month of Q3.

The market’s sweet spot is on the horizon…

Chart show weak average performance in Q2 & 3 that leads to peak performance during Q4, and next years Q1 & Q2.

Data doesn’t lie.

The market is supposed to be weak in the middle of a mid-term year. It’s also supposed to rally over the next three quarters.

Based on this expectation, we are fully invested in the market with little cash reserves.

Watchlist:

*Low Float
^Open Position*

NERV resistance at $8
AXSM is on watch
COGT support at $16
VERV support at $38
RYTM support at $23
CSIQ support at $42, resistance at $45
FLNC support at $19
INFI support at $1.60
PRVA support at $40
^GEO support at $7.50
NDOW support at $12
SEEL support at $1.25
ENVX resistance at $25

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