The big three (SPY, DOW and QQQ) are all well below their 50- and 200-day moving averages with the S&P 500 closest to touching the 200-day. The mighty 200-day can be a significant line in the sand so to speak, so if the indexes can get back above that level — where they have traded for a long time until recently — it would be a bullish sign.
$SPX is just now catching up. So far, it has found support in the 4200–4300 area, which is the September lows.
The SPY, DOW and QQQ managed a weekly gain thanks in part to a late day rally on Friday. Unfortunately, the IWM was still down but less than 1%. All this after the Fed came out with some comments that were more hawkish than expected on Wed.
The market is so oversold that a rally could occur at any time. An oversold rally usually can retrace all the way up to the declining 20-day Moving Average and a little beyond, before it runs out of steam. In this case, the 20-day MA of $SPX is still quite a ways above current prices – at 4600, but it is declining rapidly. Even so, that would be a substantial rally from current levels
Looking for a follow through move higher early next week but markets will likely continue to be volatile.
What’s Happening –
• Possible continuation bounce after January selling but there will be more volatility.
• Watch the 2 year and 10 year treasury yield as the gap closes between the two.
• VIX – pulled back on Friday on market strength.
• US dollar may be ready to consolidate after big pop up.
• Earning season continues. Lots of big names continue.
Sectors in Play –
• Energy looks a little extended and maybe due for pullback.
• Financials maybe found a bottom here – will do OK in a rising interest rate environment.
Earnings –
Quarterly earnings continue to roll with Amazon, Alphabet and Meta just a few of the well-known stocks expected to announce this week
Earnings on deck this week:
Tues
• XOM, UPS bmo –
• AMD, PYPL, SBUX and GOOGL amc
Wed
• ABBV, BABA bmo –
• META, SPOT and QCOM amc
Thu
• AMZN, SNAP, PINS amc
Watch List :
AAPL – Nice response to earnings – maybe range bound now trading $160 to $180.
AMD – very oversold – support at $100.
NVDA – Oversold – possible bounce
GLD (Gold) – very oversold, might be time to step in here for a bounce.
USO and Oil sector (XLF) – some oversold topping action on daily candles.
TSLA – caught a bid Friday after big earnings sell off. Very volatile stock with $800 support now.
