Market Observations & Charts 12-08-22
Observations:
Nice to see bounce today and the QQQs +1.2% led but the indices did not take back their short term MAs (5 & 20d) so for now, it makes sense to be skeptical /defensive regarding bounces until the trend is more sound.
$ES_F - S&P Futures
Stuck in the middle of the Dec Value Area and the 80% rule is still in effect (80% chance the price travels from on side of the Value Area to the other)
Watch the Semis! The Semiconductor ETF, SMH, is at a crucial level & needs to break into the ‘22 Value Area on Weekly chart $224.36 which we represent a bullish change in trend using the MarketWebs Volume At Price indicator. I think Semis can often be a provide clues on the over strength / weakness of overall market.
SMH Semiconductor ETF
What about Energy? Clearly, Energy stocks are the leading sector this year, XLE is +58% ytd, so in my opinion, give them a breather as they got overcrowded. In the chart below, some downside levels to watch at $82.65 lower VPOC and the 200d MA. Will see if buyers return after they take an appropriate breather
XLE Energy ETF
Equal Weighted S&P (RSP) is stronger than Market Cap Weighted S&P (SPY). To me, this is exactly what we want to see vs only a few big companies like the FAANG names leading. That said, the RSP needs to maintain above the 200d MA for me to continue to participate in swing trading & take risk.
RSP - Equally Weighted S&P 500
Stocks I am watching after today’s price action continues to be a mix of Value and Growth companies.
Remember as a individual investor, we can participate in any area of the market, don’t limit yourself!
PEP Pepsico
As I detailed in the TTG Trading room on 12-7, PEP has been a great name to buy on dips at the 20d MA. I like a long here vs a stop of $181.
MCD - McDonald's
The price action is getting tight here, watch for a break of the Dec Value Area, set alert to $274.23 for the next leg higher.
WWE - World Wrestling Entertainment, Inc
This stock has acted very well in a difficult market and is in a defined uptrend. A nice test of the 50d MA here & i like a long vs 50d MA stop.
UCTT - Ultra Clean Holdings, Inc.
This Semi Manufacturing Co is breaking above the 200d MA and Dec Value Area. Keep it simple trade. I am long vs 200d MA
WDAY - Workday, Inc
A couple weeks back WDAY had a strong earnings report and got them closer to the 200d MA. Today, there was a sizable call buyer :
1000 WDAY Mar23 170 Calls $16.829 Above Ask! Premium=$1.68m
This is nice because it shows institutional interest and the price is almost at the 200d MA. In my opinion, can either start a trade here was a stop at Dec top of Value Area, $160.33 or wait for a cross of 200d MA and then use that as a stop.
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