Evening Edition April 6 2023 - Are We Headed for a Crash?
Tech stocks lifted the S&P 500 into the green Thursday as the market wrapped up the short trading week on a high note despite signs of a weakening labor market.
The S&P 500 rose 0.36% to 4,105.02 after losing as much as 0.50% earlier. The tech-heavy Nasdaq Composite outperformed with a 0.76% gain to 12,087.96, boosted by a 3.78% rise in Google-parent Alphabet and a 2.55% rally in Microsoft shares. The Dow Jones Industrial Average inched 2.57 points higher to 33,485.29 after losing more than 150 points at its session low.
“The Fed built a wall with interest rates and now the economy is running into it,” said Jamie Cox, managing partner at Harris Financial Group.
As mentioned in this week's videos and last weekend, market was expected to pull back from touching the August Highs TL and October Lows TL right on the money near 413. While the markets had whipsaw back and forth moves, the $SPY $QQQ virtually closed flat on this short week.
The volume and weekly "doji" look is concerning, doesn't mean it's bearish but concerning volume look, and lack of decision as market is awaiting CPI Data next Wednesday and FOMC Minutes. But first, we do have NFP data tomorrow morning while the market is closed. This is something to keep an eye on for Monday forecast.
I do think we will attempt 412 again this week. A close above next week 413 range will put us above the October Low TL which is Bullish. A close under 410 next week, is bearish going in to earnings season as investors have to weigh potentially underperforming margin growth from $AAPL $NFLX $META $AMZN $GOOG. They are set to report earnings last week of the month.
What is bullish is that market seems to be pressed about putting in higher lows on this uptrend and highs, shook off SVB and other banking issues, cooling job reports and hawkish Powell press from FOMC meeting. While I'm not convinced we will be visiting October lows bear thesis, I remain open minded on this trend. Day by day, one trade at a time.
Below you can watch this week's video. BTW, we nailed the bottom today with weekly $SPY calls and also I am swing some of these:
Have a great weekend.