News:
Premarket on Thursday brought the release of two dull reports.
- New weekly unemployment claims are holding steady near 200K
- The final Q2 GDP estimate was unchanged from the previous at +2.1%
That chart is boring.
And the markets show little reaction to the news.
The indexes opened flat and advanced steadily throughout the day. All four close with respectable gains…
- Dow Jones +0.4%
- Nasdaq +0.8%
- S&P 500 +0.6%
- Russell 2000 +0.9%
Our recent purchases are currently showing a profit. We’ve opened season swing positions in…
- The S&P 500
- The Russell 2000
A deeper understanding of the indexes and hints as to our exact positions can be found by following the links above.
Sector Round Up
Of the 11 sectors, 10 closed Thursday with gains. One collapsed.
At the top…
- Consumer Discretionary (XLY) +1.1%
- Communications (XLC) +1.1%
- Materials (XLB) +1.1%
The loser…
- Utilities (XLU) -2.1%
Unsexy Utilities
The Utilities sector has been in free fall as bond rates rise.
On Thursday, the ETF that tracks the sector, Utilities Select Fund (XLU), closed at its lowest level since the 2020 pandemic crash.
Here’s why…
Utilities aren’t sexy. No one buys stock in American Electric Power Company (AEP) or American Water Works (AWK) to get rich.
You didn’t even want them during your last game of Monopoly…
So when bonds are paying anywhere from 4-6% GUARANTEED, investors seeking safety flee “safe” stocks.
Plus, utilities have lots of debt. Higher rates mean higher operating costs and lower profits.
While the broader market is bullish, we are avoiding this sector like the plague.
Technicals:
The put-to-call ratio opened at its highest level in over a year … And then collapsed.
That chart shows a rush to the exit.
Bears grew to their most aggressive stance in years, only to panic out of their positions.
Your latest readout…
- The VIX is back below 18
- RSI levels the Dow remains oversold … the rest are neutral
- The put-to-call ratio is NEUTRAL
Timing:
While we are confident, the bottom is likely in. An October retest of this week’s lows is likely.
We are building our positions over time. Starter positions only for now.
Looking to load the boat on the next dip.
Watchlist:
*Low Float
^Open Position
*SLNO support at $25
*SHOT support at $1.40, resistance at $1.55
*HRTG support at $6
LFMD support at $5
GIII support at $24
METC support at $10, resistance at $11
USAC on watch
IMVT on watch
APLT support at $2.50, resistance at $2.80
BHVN resistance at $26
NN support at $5 / resistance at $5.50
TNGX support at $11
VIST on watch
SCS support at $11
Secondary watchlist—float 100+ million
TAL support at $8
ROIV support at $12