News and Sentiments
Stocks traded fairly sideways till Friday’s 2/11/22 action pushed them to much lower levels for the week with the three major indexes all closing below their 200-day moving averages again. With chances increasing that the Federal Reserve may boost rates 50 basis points soon, and Russia will move into Ukraine, it may be tough sledding ahead for bullish traders. That said, the market has been resilient in the past, so a move higher would not and should never be out of the question. Earnings calls continue to slow, but there are several big-name companies expected to announce this week, including Alibaba, Baidu and NVDIA. As far as economic reports go, several are on tap, including the notes from the Fed’s last meeting. It’s unclear whether there will be any more insight to how the Fed is leaning before the next meeting, but it might be worthwhile to keep an eye on the market Wednesday 2/16/22 afternoon.
The overall picture for SPX is bearish. Both bulls and bears are hard-pressed to make money in bear markets. There is support near 4360 – the lows of yesterday (2/14/22) . The next important support level below that is in the 4200-4300 area, which if taken out will likely set off sharper downside action towards the next support level at 4000. As for resistance, it begins at 4600 and – after the long-time $SPX spent traversing the trading range in November and December – is evident all the way up to the highs above 4800
What happening this week:
• 2/15 – Tue PPI .
• 2/16 -Wed – Retail Sales data; FOMC meeting minutes
• 2/17 – Thu – Jobless claims
• Continue to watch the 2 year and 10 year treasury yield for a close in the gap between the two.
• VIX – popped up on CPI and Russia. Watch for more volatility
• US dollar continues to find some strength.
• Earning season continues.
Sectors in Play
• Energy very extended on oil but trend still is looking for higher.
• Financials continue to do OK in a rising interest rate environment. Pulling back so maybe an opportunity to add back
• Gold – ready to move. Geopolitical concerns pushing it higher .
Earnings:
•Monday – AAP, CAR amc
•Tues- VIAC, MAR bmo and RBLX, UPST, ABNB amc
•Wed – SHOP bmo and NVDA, AMAT and CSCO amc
Watchlist :
SPY – Add long put as hedge when SPY hits 452 / 458 area
PYPL – $120 did not hold, next support maybe around $107
USO and oil sector – still looking strong but extended run.
SQ – double bottom with support around $100.
WCC – long for infrastructure play. In and out this week. Will watch for another long entry at $120.
XLF – possible support around $37.5
