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9/20/22 Another Bullish Engulfing! For Fed’s Sake

News:

Markets spend the major of Monday flat. But in the final hour, buyers showed and pushed all four major indexes higher.

  • Dow Jones +0.6%
  • Nasdaq +0.8%
  • S&P 500 +0.7%
  • Russell 2000 +0.8%

But beneath the surface, there were still signs of weakness.

Image of arrows. One pointing up and another pointing down

Of all listed stocks, only 55% advanced, while 41% declined.

Sector Round-Up

9 of 11 ended the day higher. The charge higher was broad…

  • Materials (XLB) +1.7%
  • Consumer Discretionary (XLY) +1.4%
  • Industrials (XLI) +1.4%
  • Utilities (XLU) +1.3%

The losers…

  • Real Estate (XLRE) -0.2%
  • Healthcare (XLV) -0.5%

Notably absent from the biggest movers was Energy (XLE), which settled near flat.

Cargo Takes Off

Shippers are sick and tired of waiting in line at ports.

Photo of container ships at port
Photo by William on Unsplash

According to a Wall Street Journal report, ocean shipping giants are turning “to planes as supply-chain snarls deepen.”

  • Two shipping stocks hit our radar yesterday when they made new 52-week highs. 
  • Each is noted on the watchlist below.

Technicals:

The S&P 500’s chart is showing a bullish pattern … again.

Chart showing two bullish engulfing patterns
SPY Daily Candles – Chart via thinkorswim

We’ve circled both two bullish engulfing patterns we’ve seen this month.

The thing to remember about patterns is there are limitations.

Indicators can tell you the direction the market wants to head. But as we saw last week with the CPI data, news trumps indicators.

And this morning, we’re still waiting to hear from The Fed.

Timing:

The FOMC meeting begins today.

It will conclude tomorrow afternoon.

Until then, we are in wait-and-see mode.

Watchlist:

*Low Float
^Open Position
^^Shipping Stock

*BWEN resistance at $3.50
^^TNK on watch
ADN resistance at $4
AAOI resistance at $4
EPM support at $8
MNTK support at $18
DCPH support at $18
CRBU support at $12
RVNC resistance at $29
^SGML support at $25
^GEO support at $8
PGEN support at $2.60
^^NAT support at $3.35
^GERN resistance at 2.80, support at $2.60

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