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9/6/22 Four Calls and A Funeral

News:

Ahead of the long weekend on Friday, markets opened higher and climbed during the morning session.

By noon, the S&P 500 was up more than 1%.

Then the buying stopped.

Do not enter street sign
Photo by Eilis Garvey on Unsplash

Markets fell throughout the afternoon and ended the day significantly lower.

  • The Nasdaq led the decline, falling 1.3%
  • The Russell 2000 fell the least with a loss of 0.7%
  • S&P 500 and Dow closed down 1.1% each

Sector Round-Up

10 of 11 sectors ended the Friday in the red.

The volatile Energy (XLE) sector was the lone bright spot adding 1.8%.

Image of pipeline and Nord Steeam logo
Image from Reuters

Don’t expect energy to give the top volatility spot any time soon. Over the weekend, we got a few surprise developments…

This morning oil futures are slightly higher but still below pre-Ukraine invasion levels.

Friday’s biggest losers…

  • Healthcare (XLV) -1.4%
  • Real Estate (XLRE) -1.7%
  • Communications (XLC) -1.9%

A Death In Meme Stocks

Gustavo Arna, the CFO of Bed Bath & Beyond (BBBY^), died in an apparent suicide on Friday.

According to reports, the 52-year-old jumped from an NYC highrise.

Shares of the stock are down 16% in premarket trading … A decline of more than 75% from its August highs.

Crypto Update

Bitcoin^ spent much of the long weekend trading below the critical $20,000 level.

At writing, it’s at $19,945.

The crypto rut continues. But buyers are holding the price steady.

Technicals:

The VIX is telling a story…

VIX chart with 25 marked
VIX Daily Candles – Chart via thinkorswim

Despite Friday’s selloff, the VIX actually fell. A rare feat indeed as a declining VIX typically favors the bulls.

Our other signals favor the bulls too.

We remain in wait-and-see mode. This market dip has not shaken our bullish outlook.

Timing:

It’s a short week without much in the way of macroeconomic news.

There are a few earnings reports we’ll be keeping an eye on…

  • NIO Inc. (NIO) reports Wednesday premarket
  • GameStop (GME^) Wednesday after the close
  • DocuSign (DOCU) on Thursday after the close
  • Kroger (KR) on Friday premarket

Watchlist:

*Low Float
^Open Position

*RVPH resistance at $3
COGT support at $16
VERV support at $37
AREC support at $3, resistance at $3.50
FLNC support at $18
DXLG support at $5.50
HOLI support at $18
^GEO support at $8
TCRT support at $2.80
^GERN support at $2.50
TAL support at $5.50

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