The Fuse
Futures are soft today in a follow on from yesterday’s sharp reversal. Breadth signals have been telling us a big reversal was upon us, and after ‘painting the tape’ to end April on a high note, the sellers have again taken control. A bearish eveningstar pattern emerged on Tuesday and confirmed yesterday. If it continues to play out the spx 500 index has more room to fall.
Interest Rates are rising slightly this morning as the market weighs in on the Fed’s recent rate hike. The committee brought the funds rate to 5% and indicated they could be looking at a pause or more hikes depending on the data.
Gold and silver spiked higher overnight as fears of a continuing bank problem permeate. After yesterday’s close PACW announced they were trying to sell their bank, which usually means trouble.
Qualcomm missed badly last night as did Fastly, but Etsy had strong revenues. Apple, Shopify, Square, and Coin will deliver earnings tonight.
The FOMC came and went today, and dropped another 25bp rate hike on the economy. The markets started to take it all in stride but it was Chair Powell’s press conference that unnerved the crowd.
Breadth was strong most of the session but turned sharply lower later in the day. Sell signals are confirmed.
A surge of selling pressure hit the markets late in the session as the Fed’s rate hike and follow-on statement made a mess.
Resistance is now at 4100 on the SPX 500, as the oscillators are not completely oversold as of yet. Sentiment is still rather bullish to neutral, but that could change on a dime.
The Internals
What’s it mean?
A monster turnaround for the bears has now put the bulls on their heels. The VOLD spun on its top and finished on the lows, while we nearly had a trend down day. VIX popped up and closed near 19% after being down much lower, the ADD line extremely negative. This bear market rages on as the internals show weakness.
The Dynamite
Economic Data:
- Thursday: jobless claims, challenger job cuts, productivity and unit labor cost for Q1 2023.
- Friday: NFP labor report, consumer credit.
Earnings this week:
- Thursday: CAH, SHK, MLM, VMC, K, RACE, ICE, IDCC, AMNY, AAPL, SQ, CRUS, COIN, DASH, DBX, EXPE, FTNT LYFT, SHOP, MIS
- Friday: AMC,. CBOE, CHNI, ROAD, WBD
Fed Watch:
Issues and Stocks to Watch this week:
Apple – Releases earnings on Thursday evening, it may trigger some big market movements.
First of the month – money flows are often strong to start the month.
The Fed meeting – Plenty of hot inflation data, too much for the committee at this point, looking for another hike or two to come.
