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Market Rap 06/17/22 by CTG

SPY / QQQ / Vix

SPY 5 days, hourly candles

S&P futures seeing a tepid bounce from hourly/4hr oversold conditions, off yesterdays lows. 12hr timeframe also oversold.

Today is the ex div date for SPY, so prices are artificially lower by 1.57. 365.45 the corresponding futures low

369.51 the corresponding futures/pre mkt high

SPY 3 months, daily candles (and SPY 180 days, 12hr candles to show RSI history) along with the SPY 3year, weekly chart to look at previous price history for levels of support Daily bear flag follow thru on big volume, as we stay locked in downtrends on pretty much all timeframes. This tepid futures bounce we're currently seeing has cooled off the hourly/4hr RSI, but the 12hr RSI is currently oversold, which we don't see too often (see chart for reference). Daily RSI still not quite into oversold territory.

Quadruple witching options expiration today. (support)

364.08 yesterdays low

362.03 going back to the week of 12/21/20

Much lower than that, we get into an air pocket on the volume profile on the weekly timeframe, that goes down to the pre-Covid highs around 335-345 area. (resistance)

370.94 the high from yesterday

372.12 open gap rom yesterday

383.90 after that

389.71 the daily 12ema (white line)

389.75 next open gap

QQQ 5 days, hourly candles Nasdaq futures also seeing a bounce that's cooling off hourly/4hr timeframes, along with the oversold 12hr timeframe 271.11 the after hours low from yesterday, before futures opened

275.35 the corresponding futures/pre mkt high

QQQ 3 months, daily candles Daily bear flag follow thru here yesterday also. Downtrends on all timeframes that bulls will need to work thru, to have any hope of turning back the sea of bearish momentum. Oct/Nov support from 2020 came into view yesterday. (support)

269.28 the low from yesterday

266.97 from the week of 11/2/20

260.11 from Sept '20 after that (resistance)

276.06 the high from yesterday

276.61 open gap

286.83 after that

288.38 next open gap

289.47 the daily 12ema

TLT 5 days, hourly candles and 3 months, daily candles Megaphone action on the hourly yesterday as we made new lows early in the day, under the last few days of lows; then reversed to make higher highs over the last few days of highs, and regain most of the drop we saw to start the week. Daily bullish engulf candle over yesterday/this whole week of action. Volume running high.

July Vix 3 months, daily candles Yesterdays big bounce failed to get over Mondays levels, even with the broad market finding new lows, so a divergence to take note of. It gets hard to maintain levels of volatility that run this high. Inside day so far today, within yesterdays wide range.

Spot Vix 3 months, daily candles Similar story here - still failing to get over the May highs, even with the broad market finding lower lows. Will this completely back off again in the short term, to re-test the mid 20 levels we saw in early June?

Or will the pullback be mild, and form a "cup and handle" that eventually gets thru all those previous levels, and breaks out to new highs? (and sees the broad market get a capitulation flush to much lower levels?) The S&P 500 futures are up 32 points and are trading 0.8% above fair value. The Nasdaq 100 futures are up 114 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 181 points and are trading 0.7% above fair value. There is a bid in the futures market this morning on this quadruple-witching options expiration day. That bid has much to do with the lack of bidding throughout the week in the cash market, which has been broadsided by growth concerns, central bank rate hikes, and price action that just won't cooperate with buy-the-dip interests. Another buy-the-dip attempt is being made now. It has been a big dip, too. Entering today, the Dow, Nasdaq, and S&P 500 are down 4.7%, 6.1%, and 6.0%, respectively, for the week. The Russell 2000 and S&P 400 are both down 8.4%. The Bank of Japan bucked the central bank trend, announcing today that it is leaving its key policy rate unchanged at -0.1% and maintaining its commitment to yield curve control. Not surprisingly, this decision has weighed further on the yen (USD/JPY +1.9% to 134.67 and EUR/JPY +1.5% to 141.44). WTI crude futures are down 0.3% to $117.20 and unleaded gasoline futures are down 1.7% to $3.89/gallon. Reports have indicated that the White House is discussing the possibility of imposing fuel export limits. The 2-yr note yield is down 3 bps to 3.13% and the 10-yr note yield is down 9 bps to 3.22% in a curve-flattening trade. In corporate news:

  • Adobe, Inc. (ADBE 351.52, -13.56, -3.7%): beats by $0.04, reports revs in-line; guides Q3 EPS and revs below consensus; lowers FY22 EPS and revenue guidance

  • U.S. Steel (X 20.81, +1.23, +6.3%): issues upside adjusted EPS guidance for JunQ and expects record adjusted EBITDA of $1.6 bln

  • Roku (ROKU 81.57, +2.99, +3.8%): Company and Walmart (WMT) announce partnership where WMT will be the exclusive retailer to enable streamers to purchase products on Roku platform

  • Alibaba (BABA 111.70, +10.25, +10.1%): China accepts Ant Group's application to become a financial holding company

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