The Nasdaq (+2.68%) had continued its reversal and had approached two key points: EMA21 and the ~12000 zone which could offer some clues on the next movements. Volumes were higher than the day before, but it would have been better to see a stronger desire to enter the market for confirmation. If we see even better volumes today and more progress, that will be positive for the market.

SP-500 (+1.99%) also had a strong move. Passing the EMA21 and 4100 area will be a good signal. For an uptrend, we need to see money coming in (higher volumes). Look for convergences in advances and volumes. Otherwise, we might see just a middle reversal and a continuation of the downtrend.

In the news

Broadcom announces its intention to buy VMware in a $61 billion deal.

Apple is increasing the salary budget for workers in a tight labor market.

Twitter shareholders are suing Elon Musk, accusing him of manipulating stocks.

Congressional Budget Office: GDP will grow 3.1% in 2022 and inflation has peaked.

Helium shortage hits birthday and graduation parties.

GDP will grow by 3.1% in 2022 and inflation has peaked.

Sectors

  • Yesterday’s Best Sector: Cyclical consumption, then Technology. Worst Sector: Utilities.
  • Best weekly sector: Energy, then Financial. Worst Sector: Communication Services.
  • Best monthly sector: Energy, then Utilities. Worst sector: Cyclical consumption.

Feeling

  • NAAIM (weekly, neutral between 70 and 90): 33.19
  • VIX (neutral under 20): 27.50
  • Equity Put/Call ratio (neutral between 0.7 and 1): 0.93
  • CNN Fear & Greed: 17 (extreme fear)

Lenght

  • Stocks above SMA40 (neutral between 30 and 80): 33.09%
  • Stocks above SMA200 (neutral above 30): 25.71%
  • Number of stocks that rose more than 4% yesterday: 665
  • Number of stocks that fell more than 4% yesterday: 77
  • McClellan oscillator (neutral between -100 and 100): 144.55

Revenue reports

Difference shares tumble 13% after the retailer cut its profit forecast for the year. macyThe stock soars as the company raises its 2022 earnings outlook despite an uncertain retail landscape. Ali BabaShares rallied 14.79% after the earnings beat despite the company backing away from its 2022 guidance, citing COVID-19 risks. CostcoRevenues beat estimates, but same-store sales beat expectations.

Notable earnings reports for today:

The market seems to be going up, but pay close attention to the price when you encounter its support or falling averages (if that’s the case of course). The positive move can be the start of a reversal trend but also a short cover / relief bounce / mean reversion. Check the volumes to identify loud movements.

I don’t see many good models with low risk entries. I prefer to see stocks fall into place before I pull the trigger. No FOMO.

If you are trading, you may consider using smaller positions.

Grid Dynamics ($GDYN) is consolidating above EMA21. If the prices break above the black line, the trade could work out. Loss limit: 5%.

Olin Corporation ($OLN) has a great base and tried to break through resistance, but yesterday was not the best day for the sector. If the price makes another attempt to conquer the highs, we could see an advance. Loss limit: 5%.

Exercise due diligence if or when placing a trade. All ideas expressed here are my own and do not represent trading or investment advice.

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