News:
Thursday was a victory for large-cap stocks.
The Dow and S&P 500 eked out small gains after spending most of the day trading in the red.
The SPY even flirted with our “buy zone.”
But some bulls emerged at the end to close the market.
Now it wasn’t all rainbows and sunshine…
Underneath the surface, tech stocks and small caps continue to pile on the losses. 68% of all stocks lost ground on Thursday.
And the “risk-on” indexes suffered.
- Nasdaq -0.3%
- Russell 2000 -1.2%
Sector Round-Up
Here’s where things get even more interesting…
8 of 11 sectors closed in positive territory.
The leading sectors were the “risk-off” stocks:
- Healthcare (XLV) +1.6%
- Utilities (XLU) +1.4%
At the bottom…
- Technology (XLK) -0.5%
- Materials (XLB) -1.3%
- Energy (XLE) -2.5%
The price of crude oil is on the decline. It continues to flirt with pre-Ukraine invasion support levels.
All-in-all there is no clear direction for the market right now.
Today’s reading makes it look like investors are seeking firm footing. But as always, things must be taken in context.
As we round out the final weeks of the mid-term weak spot, some indecisiveness is to be expected.
We believe this is all part of general seasonal weakness.
In our view: the Q4 rally appears imminent.
Crypto Update
At writing, Bitcoin^ has regained that critical $20,000 level.
We believe the long rut in the crypto market is one of the last great buying opportunities for the digital asset.
Our upside bull-case price target for the next rally is $2.6 million. You can read our full analysis here.
Technicals:
The market’s not very volatile right now.
The VIX, while it did break 25, it’s having trouble getting much higher.
For the bears to do serious damage, they need high volatility. It hasn’t happened on this dip.
Our other signals favor the bulls.
- The Put-to-Call Ratio is oversold for the fourth day but falling.
- RSI levels are near oversold and rising.
We remain in wait-and-see mode. This market dip has not shaken our bullish outlook.
Timing:
This morning the latest unemployment rate drops at 8:30.
This afternoon the markets will close for a long weekend, thanks to Labor Day.
We’ll have a fresh update for you on Tuesday.
Enjoy the holiday!
Watchlist:
*Low Float
^Open Position
*SHPH on watch
COGT support at $16
VERV support at $37
AREC support at $3
FLNC support at $18
DXLG support at $5.50
^GEO support at $8
TCRT support at $2.80
^GERN support at $2.50
TAL support at $5.50
GSAT resistance at $2.10