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9/21/22 Rangebound in the Buy Zone

News:

Monday’s gains were short-lived. 

Federal Reserve emblem
Image from Wikipedia

Tuesday, markets declined as the FOMC meeting convened.

  • Dow Jones -1.0%
  • Nasdaq -1.0%
  • S&P 500 -1.1%
  • Russell 2000 -1.4%

There were few bright spots. 79% of all stocks closed the day lower.

Sector Round-Up

All 11 sectors fell too.

The smallest losers…

  • Consumer Defensive (XLP) -0.6%
  • Technology (XLK) -0.6%

The biggest…

  • Consumer Discretionary (XLY) -1.7%
  • Materials (XLB) -1.9%
  • Real Estate (XLRE) -2.6%

Ford’s $1 Billion Problem

picture of ford vehicles at dealership
Image from Ford

Ford (F) fell 12% on Tuesday after issuing a warning to investors.

It said a “parts shortage” and “inflation-related” costs will take away “~$1.0 billion” in profits in Q3.

  • The auto maker’s market cap took a $7 billion hit as a result
  • It still expects between $11.5 and $12.5 billion in profits in 2022

Technicals:

The S&P 500 is rangebound in the “buy zone” we called out earlier this month.

SPY chart with support at $380 marked
SPY Daily Candles – Chart via thinkorswim

A break to the high side is the final signal we need to initiate a position.

This morning, as we wait for The Fed’s decision…

Today’s moves will reflect investors’ reaction to the Fed, not market pressures.

Timing:

The FOMC meeting concludes today.

  • The new interest rate drops at 2 PM
  • Fed Chair Powell speaks at 2:30

Three things to remember…

  • A 0.75% hike is already priced in
  • Never believe the first move
  • The market loves Powell

Watchlist:

*Low Float
^Open Position

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

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