News:
Markets opened green on Wednesdays. But after a brief rally, they took a dive.
The S&P 500 was down -0.8% at 2 pm. And the outlook was bleak.
Then, the tides turned. Markets rallied into the close, and the indexes squeezed out a mostly positive close…
- Dow Jones -0.2%
- Nasdaq +0.2%
- S&P 500 +0.0%
- Russell 2000 +1.0%
The late-day rally happened despite seemingly disastrous economic headwinds…
- Goldman Sachs (GS) put the odds of the government shutdown at 90%
- Oil prices hit a fresh high for the year
- Bond rates continue to climb
- The dollar is growing stronger
Sector Round Up
The sectors split in favor of the bears—7 of the 11 ended the day lower. But the larger magnitude favors the bulls.
At the top…
- Energy (XLE) +2.5%
- Industrials (XLI) +0.7%
- Communications (XLC) +0.3%
At the bottom…
- Consumer Staples (XLP) -0.8%
- Real Estate (XLRE) -0.9%
- Utilities (XLU) -1.9%
Technicals:
Today, let’s look back one year.
The chart below is a historical record of exactly what happened on September 30, 2022…
After bottoming out at the end of September, the market retested those lows in mid-October.
Then it went on a tear. The S&P 500 gained 32% over the next ten months, peaking in July 2023.
Today, the setup looks eerily similar.
And our signals are united … further downside is limited.
Your latest readout…
- The VIX is still holding below 20
- RSI levels are split, the Dow and the S&P 500 remain oversold
- The put-to-call ratio is extremely oversold
We’re buying the dip.
Timing:
This morning at 8:30, the final GDP estimate for Q2 drops.
As does the latest data on unemployment filings.
If you see volatility at 8:30, be sure to check both releases.
Watchlist:
*Low Float
^Open Position
*SHOT support at $1.40, resistance at $1.55
*HRTG support at $6
*ACIC support at $8, resistance at $9
LFMD support at $5, resistance at $5.50
GIII support at $24
METC support at $10, resistance at $11
IMVT on watch
APLT support at $2, resistance at $2.80
WSM support at $145
MLKN on watch
NN support at $5 / resistance at $5.50
TNGX support at $11
VIST support at $28
SCS support at $11
Secondary watchlist—float 100+ million
TALK support at $1.80, resistance at $2
TAL support at $2
ROIV support at $12