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8/4/22 Markets Surge as Energy Fades

News:

Markets erased the week’s early losses yesterday and closed the day at their highs.

The Nasdaq outperformed, logging a gain of 2.6%. The other three major indexes posted solid gains near 1.5% each.

Three sectors led, gaining more than 2% each.

  • Consumer Discretionary (XLY)
  • Technology (XLK)
  • Communications (XLC)

Energy Tumbles

The lone red sector was Energy (XLE) which fell by almost 3%. It all comes down to supply and demand…

The price of crude settled near $90 per barrel. It’s lowest level since the Russia/Ukraine war began nearly six months ago.

Stock Highlights

Moderna’s (MRNA) stock rose 16% after a blowout earnings report.

  • Vaccine sales obliterated expectations
  • Company profits fell 19%, but that was expected
  • The COVID vaccine maker appears to be in great shape with $18 billion in cash on hand and a growing team.

Shares of Robinhood (HOOD) climbed 12% after announcing lousy earnings and a major shake-up.

  • The stock broker is set to cut 23% of its staff.
  • Active users are down by 34% from the previous year.
  • Revenue fell 44%.
  • Investors appear to believe the worst is behind them.

Tesla’s (TSLA^) stock split decision looms.

  • The annual shareholder meeting is today
  • Investors will have their say on a number of topics, including the proposed 3-to-1 stock split.
  • Expect that announcement and others after the market closes this evening.
  • The share price has risen 35% over the past month.

Bitcoin Boss Booted

Shares of MicroStrategy (MSTR) exploded nearly 13% higher after it announced its founder and CEO, Michael Saylor, would be stepping down.


Image from Twitter

  • The 57-year-old entrepreneur led the company’s efforts to buy billions of dollars worth of Bitcoin.^
  • The Wall Street Journal described the company as “a bitcoin-holding vehicle with a cash-generating software business.”
  • The stock price is down 76% from its peak in early 2021
  • To Saylor’s credit, the share price is 154% higher than before its bitcoin purchases
  • In a tweet, Saylor said, “In my next job, I intend to focus more on #Bitcoin.” 

This morning Bitcoin is trading near $23,000.

Technicals:

The Nasdaq broke out above a critical resistance level yesterday. We had previously highlighted this level on Monday.


QQQ Daily Candles – Chart via thinkorswim

RSI levels are beginning to signal the market is overbought.

But the bulls still have the upper hand…

  • The put-to-call ratio is neutral. 
  • The VIX is continuing its downward side 

Timing:

Labor, labor, labor. 

The first of two key reports drops this morning: 

Watchlist:

*Low Float
^Open Position

*QRTEB is on watch
*AEMD is on watch
TH has resistance at $14
PGY has support at $25
SIGA has support at $18
CELH has resistance at $110
ALDX has support at $5.50
RYTM has support at $15
VUZI has support at $8
CBAY has support at $3.50
INVZ has resistance at $5
EDU has support at $25
ARRY has support at $16
TCRT has resistance at $1.50
GSAT has support at $1.50

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