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9/19/22 Shocking Moment of Truth Ahead

News:

Markets slid lower for a third consecutive day on Friday.

Arrow pointing down
  • Dow Jones -0.5%
  • Nasdaq -0.9%
  • S&P 500 -0.7%
  • Russell 2000 -1.5%

Markets closed near their highs of the day.

Given that the big three indexes dropped nearly 2% intraday, the close was a welcome sign for the bulls.

Sector Round-Up

2 of 11 sectors managed to move slightly higher.

  • Consumer Staples (XLP) +0.2%
  • Real Estate (XLRE) +0.02%

But ultimately, sellers owned the day. Taking the brunt of it…

  • Industrials (XLI) -2.1%
  • Energy (XLE) -2.1%

Bitcoin Below

Bitcoin^ has fallen below $18,500 this morning.

That was the key support level that held earlier this month and in June.

Bitcoin chart with described range marked.
Chart by Barchart.com

The world’s largest cryptocurrency by market cap is still range bound. The bottom of the range is $17,500.

This morning the global crypto market cap is back below $1 trillion. 

It peaked at $3 trillion last November.

Technicals:

The VIX isn’t budging.

Look at the chart … Even though the resistance level is rising, it’s unable to hold on to higher levels.

VIX Chart, with key levels marked. support at $25, resistance ta $28
VIX Daily Candles – Chart via thinkorswim

This morning markets are coming off a losing week.

But the oversold conditions are fast approaching…

The SPY has entered the “buy zone” we specified at the beginning of the month.

We’re looking for a base to form before we initiate a position.

Timing:

The week is about The Fed and The Fed only.

Here’s the schedule for the FOMC meeting:

  • It begins on Tuesday, September 20
  • Concludes on the 21st
  • The new rate announcement comes at 2 pm
  • Fed Chair Powell will take the stage at 2:30

We recommend against getting too attached to any move the market makes before Wednesday afternoon.

Watch for added volatility ahead of and directly after Fed Chair Powell’s sure-to-be shocking speech.

Watchlist:

^Open Position

AAOI resistance at $4
EPM support at $8
MNTK support at $18
DCPH support at $17
CRBU support at $12
RVNC resistance at $29
^GEO support at $8
PGEN support at $2.60
^GERN support at $2.80

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