Stock Market-Will Stocks Turn Up Into EOM & Earnings Season? Must Read!
March 5 2022 Option Professor Opinions & Observations
The big question to investors who are getting tired of looking at their statements declining in values and to traders who are shorting the market is “Will we get a Big Turn as we head into the end of March frontrunning April earnings season?” Of course the answer is unknown but we’ll share our views on what has been working and what we would need to see to embrace this oversold rally talk that is quite prevalent ( mostly held by perma-bulls & Zig Ziegler crowd)
The areas that we have focused on are sectors where the moving averages and relative strength indicators have been in a positive mode (up trending) for many months such as Energy, Precious & Industrial Metals-Commodities. The Defense & Cyber Stocks turned. Sectors that have struggled has been Tech-Growth and to a lesser extent Value-Div.
Th economic numbers on jobs, earnings, consumer spending seem to be strong which is great but fears include high inflation, geopolitical news. and the Fed being so far behind the inflation to interest rate plus possible slower GDP #’s.
We respect the 20yr and 40 yr cycles that indicated a TOP in the BOND market (2020) and the STOCK market (2021) and some are calling for a TOP in Commodities in (2022)….that respect has been rewarded and seems so far has merit.
Our levels we find important on QQQ in the short term are +345-355 followed by 365-375 with support at 320 and 280 Our levels we find important on SPX in the short term are 4350-4425 followed by 4500-4550 & support at 3860 & 3613 Our levels we find important on IWM in the short term are 202-207 followed by 217 to 228 & support at 194 and 180
Some of the reasons cited for a TURN are investor sentiment (VIX & Investors Intelligence) but because someone is bearish doesn’t mean they have sold or are shorting in size. The other reason is that EARNINGS will save they day once again and the Fed will be loathe to hike rates BUT if the Atlanta Fed is correct GDP may low toward zero in Q1 and the inflation print this week & Powell’s comments about bringing down inflation (growth?) did not fall on our deaf ears.
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