News:
Markets ended a choppy session higher on Thursday.
All four indexes posted modest gains…
- Dow Jones +0.6%
- Nasdaq +0.6%
- S&P 500 +0.7%
- Russell 2000 +0.8%
The market digested a 0.75% hike in interest rates by the European Central Bank (ECB).
- The hike brings EU rates to their highest levels since 2011
Fed Chair Powell affirmed that the Fed will likely follow suit later this month.
- While speaking at a conference hosted by the Cato Institute, Powell said, “our view, and my view, that we need to act … and we need to keep at it until the job is done”
Despite the volatile session, indexes closed at their highs … putting wind in the bull’s sails.
Sector Round-Up
The gains were limited to certain areas of the market. While the indexes performed well, only 59% of all stocks ended the day higher. 36% lost ground.
8 of 11 sectors ended green.
The heaviest buying was focused on…
- Financials (XLF) +1.8%
- Healthcare (XLV) +1.7%
There was some selling in the safer sectors…
- Utilities (XLU) -0.1%
- Communications (XLC) -0.2%
- Consumer Staples (XLP) -0.3%
Biden Boosts Bitcoin
At writing, Bitcoin^ is trading near $20,700, it’s surged 12% over the past two days, with most of those gains coming in the last 24 hours.
The catalyst is a White House Study.
Here are the highlights:
- “Crypto-assets use a significant amount of electricity.”
- “The U.S. government has a responsibility to ensure electric grid stability … clean energy … and protect communities”
- “Federal agencies should” play an active role in the development of crypto technology.
- If environmental impacts aren’t reduced, the government should consider action to “limit or eliminate [crypto] mining.”
We maintain that regulation in the crypto space is bullish.
Despite this report, we believe a ban is unlikely.
If you’re reluctant to invest in Bitcoin^, read this … Our bull case for the next run-up is $2.6 million.
Technicals:
This morning the VIX says the bulls are firmly back in charge.
After failing the breakthrough falling resistance, the VIX is back under the key level of 25. That’s super bullish.
There are no alternate signals…
- The Put-to-Call Ratio is neutral
- RSI levels are neutral for all four major indexes
Timing:
Markets have struggled on Friday and Mondays in recent weeks.
If the market can close higher today, it will break a month-long trend of bearish weekends.
Next week is the first full week of trading in September…
- Tuesday is the CPI inflation report.
- Friday is the 3rd triple witching of the year.
Watchlist:
*Low Float
^Open Position
*APRN resistance at $7
IMRA on watch
COGT support at $16
SPWR support at $27
FLNC support at $18, resistance at $20
DXLG resistance at $6
AGIO support at $32
HOLI support at $18
RVNC support at $22
SEEL support at $1.20
ISEE support at $17
^GEO support at $8, resistance at $9
ARDX support at $1.20
TCRT on watch
RUN resistance at $26
^GERN support at $2.50
TAL support at $5