Dow: +238.06…
Nasdaq: +165.56… S&P: +24.34…
The S&P 500 advanced 0.6% on Monday after being down as much as 1.7% earlier in the day. The Nasdaq Composite (+1.3%), Dow (+0.7%), and Russell 2000 (+0.7%) followed similar price action, with the tech-sensitive Nasdaq scoring the performance edge.
Seven of the 11 S&P 500 sectors closed higher after each traded lower during the session.
We caught a decent reversal today. This usually happens after they stop everyone out.
I don’t see fundamentals that warrant a rally, but when we get oversold we bounce. It wasn’t a huge V reversal like we have seen in the past and tomorrow will be important for a follow-through.
Support levels broke on the indexes but they did a good job of closing decently.
QQQ broke support and then rallied well. It still has a negative head and shoulder pattern and bounced right at the neckline. This is a huge spot, but it can be negated if it can build on today’s efforts. Technically, it put in a hammer at support. That can many times mean a change of direction is coming.
I will update P&L in the morning, but we stopped on most positions and then of course they rallied. CVE is live because it opened lower than stop. I’m holding and won’t use 17 stop. Good reversal.
I’m still interested in the XLE and XME names on this pullback.
Some reasons to keep the faith………….
1. Core inflation is peaking (maybe)
2. Yields have topped
3. Tax selling is behind us
4. Three +50bps hikes are now accepted as a given
5. Sentiment and positioning are on the lows
6. Utilities / Staples are no longer ‘cheap’
Never quit, drawdowns are part of the game.