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9/7/22 Begging For Buyers

News:

Markets went for a ride yesterday … Starting in the green, swinging quickly to red, back to green, but then ultimately settling in negative territory.

The range was tight. The selling was controlled.

All four indexes closed modestly lower…

  • Dow Jones -0.6%
  • Nasdaq -0.7%
  • S&P 500 -0.4%
  • Russell 2000 -1.0%
meme "I'm not surprised"

The reasons are the same as last week.

  • Energy uncertainty. 
  • Fed fear.
  • Seasonal weakness.

Sector Round-Up

4 of 11 sectors ended Tuesday green.

Buyers were seeking safer stocks…

  • Real Estate (XLRE) +1.0% was the top performer
  • Utilities (XLU), Industrials (XLI), & Healthcare (XLV) were also green but just barely.

The losers…

  • Energy (XLE) -0.9%
  • Communications (XLC) -1.2%

Crypto Collapse

Bitcoin^ slipped lower while the markets were open yesterday. This morning it’s trading near $18,800.

Key levels of support are at $18,500 & $17,500.

The “risk on” assets aren’t getting much love from buyers … for now.

Technicals:

The SPY has entered the “buy zone” we outlined last week.

SPY chart
SPY Daily Candles – Chart via thinkorswim

As you can see, the markets are not in freefall.

Buyers have tried to push the markets higher but just aren’t getting the followthrough they need to close green.

But our signals indicate a turn is near…

This market dip has not shaken our bullish outlook.

Timing:

September is the final month of Q3.

It’s also the final month of the known “weak spot” we first told you about in May.

As Q4 begins and the election season winds down, the markets traditionally see a strong rally into the first half of the next year.

Our analysis says there is nothing to prevent that rally from happening this time.

Watchlist:

^Open Position

CFVI on watch
COGT support at $16
AREC 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

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