News:
On Friday, the market sell-off continued.
The Dow Jones and S&P 500 tested their respective June lows. Each index managed to close well off its intra-day lows.
Still, it wasn’t pretty…
- Dow Jones -1.6%
- Nasdaq -1.8%
- S&P 500 -1.7%
- Russell 2000 -2.5%
Sector Round-Up
All 11 sectors closed the day red.
- Healthcare (XLV), -0.5% was the smallest loser
At the bottom…
- Energy (XLE) -6.9% got crushed.
Crude oil is nearing its lowest levels of the year as the market braces for a global recession.
At writing, crude is trading near $78/barrel, down more than 40% from its peak in March.
Technicals:
The VIX finally broke out…
The falling resistance suggests the bottom may already be in.
But a final push lower for stock prices, especially intra-day, wouldn’t surprise us.
Our other indicators say a turn is near.
- RSI levels remain oversold for all four major indexes.
- The Put-to-Call Ratio has reached extreme oversold conditions.
Remember this … Market mechanics work like a rubber band. You can only stretch them so far.
Timing:
At this point, the market is stretched out to the downside, about as low as it can go.
And while the short-term pain isn’t fun for investors, this market is providing an incredible buying opportunity.
The question we are asking ourselves this morning is this: “who is still waiting to sell?”
- The shock and awe of the Fed & inflation are behind us
- The market is forward-looking…
- Without new sellers, the market is poised to move higher.
As we wrap up Q3 this week, we are exiting the known weak spot in the 4-year political cycle.
We’ll bring you the latest on the incoming “sweet spot” later this week.
Watchlist:
^Open Position
FENC support at $7.50
DCPH support at $18
RVNC support at $25
^SGML support at $25
SAVA support at $40
FREY on watch
CANO support at $8