Should We Trust the Monday Rally?
Sami explains why he is skeptical about Monday’s rally: Why he was surprised by the market’s rally Where Sami sees most of the overhead supply Why Monday’s gap could be a novice gap Why Sami wants to take profits on swing longs The big problem Sami sees with new swing longs
Continue Reading -->4 ETF’s I’m Watching Right Now
We have mostly green arrows around the world to extend last week’s gains. There’s not much out of the G7. China declared victory on the pandemic as the region keeps outperforming. There could be a ceasefire in Ukraine as Russia takes more territory. SPX futures are +16 giving upside follow-through to last week’s strength. The Oscillator is probably +60, making new buys tricky. But maybe the markets want to test the 50 day above into quarter-end. Big resistance is in the 3974-4020 area. Now let’s dig into some of the ETF’s I’m watching right now: Tech led last week, giving clues we can have an oversold bounce with some power. The QQQ’s filled one gap and are already near the second. Friday’s high is $295.04. We’ll see if it wants to fill the second gap above at $299. XBI was a great vehicle last week as it finally showed relative strength and hit a high of $77.65. I sold mine Friday, but I’m looking to buy it back. We’ll see what type of digestion we get here. ARKK didn’t lead the markets to new lows the week of June 14, which signaled it could outperform. It hit high of $45.98 Friday. With a little digestion, this can see $54ish if this market rallies into quarter-end. XLE gave ways to sell as it lost special status. There was the break below $91.71 and then it lost the 8/21 day. Then there was a correction to the 200 day with a low of $69.47 last week. If it tries to bounce, there will be resistance in the $74-$77 area. Scott’s Positions Disclosure:
Continue Reading -->Coffee With Greta: All Eyes On Powell
DJIA Futures: -464, (-1.5%) SPX Futures: -64 (-1.7%) NASDAQ Futures: -208 (-1.8%) Good morning friends! Futures are lower as traders turn their focus back to the Fed and the looming possibility of a recession. A quick note that I will be out of the office tomorrow through Tuesday, June 28 so there will be no Coffee With Greta during that time. Let’s get right to it! Jerome Powell Prepares for Senate Testimony Focus is back on the Fed as Chairman Jerome Powell is set to deliver his report on monetary policy to the Senate Banking Committee today. Powell’s testimony begins at 9:30 a.m. ET. This is a routine hearing but comes at a time when the Fed is working to tackle sky-high inflation. Analysts expect the questioning to focus on what the Central Bank got wrong about inflation, what the rate hike schedule looks like moving forward, and whether Powell sees a recession on the horizon. President Biden Set to Call on Congress for Gas Tax Holiday White House officials say President Biden will call on Congress today to suspend federal taxes on gas and diesel for 3 months. He’s also expected to call on states to suspend their own taxes. The federal gas tax is 18.4 cents per gallon while the diesel tax is 24.4 cents a gallon. The suspension would save Americans roughly 3.6% on gas. But the move has been viewed in the past as a bad idea as it would impact funding for infrastructure projects. White House officials say the $10 billion cost of the tax suspension would be paid for without impacting the Highway Trust Fund, but did not detail new sources of revenue for it. The plan requires approval from both the House and the Senate. Biden is expected to make the announcement at 2:00 p.m. ET today. Gas Prices Continue to Fall U.S. gas prices are continuing to fall after peaking last week. AAA shows the national average for regular gas fell to $4.955/gal today from $4.968/gal yesterday. Diesel prices are unchanged at $5.812/gal. The recent drop comes as gasoline demand dipped but more Americans are expected to drive over the July 4 holiday weekend. Oil Slumps Oil prices are falling amid Biden’s push to suspend federal taxes on fuel. West Texas Intermediate crude futures are down 5.3% at under $104 bbl while Brent crude futures are down 4.7% at just above $109 bbl. The Energy Information Administration reported Tuesday that U.S. oil refining capacity fell in 2021 for the second year in a row. That capacity declined by 125,790 barrels per day last year on top of the 800,000 bpd drop in 2020. Capacity is down 5.4% from its peak in 2019. The American Petroleum Institute will release its weekly report on oil and gasoline inventories later today. Mortgage Demand Rises Despite Biggest Rate Jump in 13 Years Mortgage demand rose last week even as rates continued to soar. The Mortgage Bankers Association reported purchase applications rose 8% weekly but were still down 10% year-over-year. That increase was boosted by higher demand for adjustable-rate mortgages. ARM applications made up more than 10% of all purchase applications. The average 30-year contract rate soared to 5.98% from 5.65% the prior week. Refinance applications fell 3% last week and tumbled 77% compared to a year ago. In Case You Missed It The National Association of Realtors reported existing home sales fell 3.4% in May to a seasonally adjusted annual rate of 5.41 million units. That was the lowest reading since June 2020. Supply rose 12.6% from April to 1.16 million units but the median price still hit a new record-high at $407,600. Twitter’s (TWTR) board of directors voted unanimously Tuesday to recommend shareholders approve Elon Musk’s $44 billion takeover. The $54.20 per share offer requires shareholder approval. Musk meantime said debt financing is still needed and he is awaiting a resolution on the dispute over fake users.
Continue Reading -->50% Market Drop Ahead?
The S&P 500 officially entered a bear market last week with SPY and QQQ both in a bear market as well. Now Sami is predicting a 50% drop in the market! That would mean a long downtrend is ahead. Find out both the bullish and bearish trades he’s targeting this week. In this video, Sami explains: -Why he’s predicting a HUGE drop in the market -Why he feels like he hasn’t missed out on ADMA -Why he sees DOCU as a good long-term breakout -How to play MVST as a day trade -This year’s huge breakout in SIGA
Continue Reading -->Coffee With Greta: Stocks Try To Recover From Brutal Sell-Off
DJIA Futures: +417 (+1.4%) SPX Futures: +58 (+1.6%) NASDAQ Futures: +182 (+1.6%) Good morning friends! Futures are rebounding after the market suffered its worst week since 2020. Let’s get right to it! Biden Considers Gas Tax Holiday President Biden told reporters Monday he is strongly considering a federal gas tax holiday. He said he could make a decision on that proposal by the end of this week. The White House is aiming to do something to lower gas prices before the July 4 weekend. But a gas tax holiday would require Congressional approval. A gas tax holiday would eliminate some funding for the massive infrastructure law Biden signed last year. Gas Prices Continue To Cool The average U.S. gas price is continuing to cool after peaking last week. AAA shows the national average for regular gas fell to $4.968/gal today, down from the record $5.016/gal a week ago. Diesel prices also slipped today after peaking over the weekend. The national average for slipped to $5.812/gal today from the record-high $5.816/gal on Sunday. Oil Prices Rise On High Demand, Tight Supply Oil prices are rising today as high summer demand weighs on tight supply issues. West Texas Intermediate crude futures are up 2.5% at just under $111 bbl while Brent crude futures are up 1.8% at over $116 bbl. Analysts say oil demand has remained solid despite recent concerns about economic growth. Elon Musk Clarifies Tesla Layoff Plan Speaking at a Bloomberg event today, Tesla (TSLA) CEO Elon Musk clarified layoff plans at the automaker. Musk said the company will layoff 10% of salaried workers in the next three months and simultaneously expand the number of hourly employees. A leaked email to employees last week said he simply wanted to cut 10% of jobs because he had a “super bad feeling” about the economy. The cuts will end up affecting about 3.5% of Tesla’s overall workforce. Tesla shares are up 3% ahead of the open. Kellogg To Split Into 3 Companies Kellogg (K) shares are jumping 6.6% in premarket trade after announcing plans to split into three independent companies. Those will include a snacking, cereal, and plant-based company. Kellogg’s CEO said, “These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities.” The company expects the spinoffs to be complete by the end of 2023. The current CEO will lead the snacking company and executives for the other two will be announced at later dates. JetBlue Sweetens Spirit Buyout Offer Spirit Airlines (SAVE) shares are rallying 8.4% ahead of the open after JetBlue (JBLU) upped its buyout offer for the discount airline. JetBlue raised its offer to $33.50 a share from $31.50. The new offer is an effort to push Spirit into accepting this offer over the Frontier (ULCC) merger. Spirit has said it will decide between the two by the end of June.In Case You Missed It Pixar’s “Lightyear” had the best animated domestic opening since the beginning of the pandemic. The film brought in $51 million in domestic ticket sales over the weekend and $34.6 million in international ticket sales. Although that was the strongest animated film opening since before the pandemic, it fell short of analysts’ expectations for $70 million to $85 million domestically. Universal’s “Jurassic World: Dominion” brought in $58.6 million over the weekend while Paramount’s “Top Gun: Maverick” sold $44 million in tickets.
Continue Reading -->Coffee With Greta: Stocks Jump As Volatility Continues
DJIA Futures: +212 (+0.7%) SPX Futures: +32 (+0.9%) NASDAQ Futures: +118 (+1.1%) Good morning friends! Futures are rebounding despite looming recession fears as volatility continues on Wall Street. A quick reminder the market will be closed in observance of Juneteenth on Monday, so there will be no Coffee With Greta that day. Let’s get right to it! Dow Bounces After Giving Up 30,000 Dow futures are rebounding after the bluechip index plunged below 30,000 on Thursday. Wall Street gave back all, plus more, of its post-Fed rally during the session, pushing the Dow below that level for the first time since January 2021. Reality seemed to set in after the largest Fed rate hike in 28 years, that the U.S. is unlikely to avoid a recession. The Central Bank’s dot plot shows more aggressive rate hikes are expected this year. Meanwhile, Fed Chair Jerome Powell is delivering the welcoming remarks at the Inaugural Conference on the International Roles of the U.S. Dollar in Washington, D.C. this morning. All three major indexes are on track for steep weekly losses. The S&P 500 is on course for its worst week since March 2020. Biden Insists U.S. Can Avoid A Recession President Biden told AP Thursday that a recession is “not inevitable” as the Fed works to tackle inflation. Citing the 3.6% unemployment rate, Biden claimed the U.S. is “in a stronger position than any nation in the world to overcome this inflation.” He said claims that the Democrats’ American Rescue Plan in 2021 caused inflation to get worse, calling the argument “bizarre”. But Biden did admit the American people are “really, really down” after the pandemic, volatility in the economy, and soaring prices. He said, “Be confident, because I am confident we’re better positioned than any country in the world to own the second quarter of the 21st century. That’s not hyperbole, that’s a fact.” Adobe Slips On Weak Full-Year Guidance Adobe (ADBE) shares are down 4.4% ahead of the open despite beating Q2 expectations. The software maker reported adjusted earnings of $3.35 per share on $4.39 billion in revenue. That topped analysts’ expectations for adjusted EPS of $3.31 on $4.34 billion in revenue. Revenue was up 14% year-over-year. Adobe forecast Q3 revenue will rise to $4.43 billion with full-year 2022 revenue of about $17.65 billion. That’s down from its previous forecast for $17.9 billion in full-year revenue. Gas Prices Fall Again U.S. gas prices declined today for the third day in a row. AAA shows the national average for regular gas dipped to $5.000/gal today, down from $5.009/gal on Thursday. The recent drop in prices comes as gasoline demand has pulled back a bit. The Energy Information Administration says U.S. demand fell to 9.09 million barrels per day from 9.2 million. But diesel prices are still pushing to new records. The national average for diesel jumped to $5.798/gal today from $5.786 on Thursday. Oil Prices Dip Oil prices are slightly lower this morning as the market continues to weigh tight supply concerns against recession fears. West Texas Intermediate crude futures are down 0.4% at $117 bbl while Brent crude futures are 0.1% lower at just under $120 bbl. Prices are on track for a weekly decline following the Fed rate hike. It would be the first weekly drop for Brent crude in five weeks and WTI crude in eight weeks. Leading Economic Indicators Expected to Fall Economists expect the U.S. economy softened further in May. The Conference Board releases its leading economic index at 10:00 a.m. ET today. That index is expected to fall to 0.4% after slipping 0.3% in April. The LEI is a weighted gauge of 10 economic indicators. One of those indicators is building permits, which plunged 7% in May. Another is consumer confidence, which fell 2.2 points last month. In Case You Missed It Elon Musk held a town hall meeting with Twitter (TWTR) employees on Thursday. Employees submitted questions beforehand that they wanted the Tesla (TSLA) CEO to answer. Musk emphasized his focus on free speech, building trust with employees, in-person work, and the possibility of layoffs. He said “Right now the costs exceed the revenue… Anyone who is a signification contributor has nothing to worry about.” He also set a goal of reaching 1 billion daily active users. In Q1, Twitter said it had 229 million DAUs. The U.S. Global Jets ETF (JETS) tumbled 5.9% on Thursday as recession fears threaten to dent surging travel demand. American Airlines (AAL) plunged 8.6% to $12.16, its lowest level since November 2020. Southwest Airlines (LUV) hit a nearly two-year low, dropping 6% to $34.98.
Continue Reading -->Coffee With Greta: The Post-Fed Rally Collapses
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -461 (-1.5%) SPX Futures: -68 (-1.8%) NASDAQ Futures: -231 (-2%) Good morning friends! Futures are tumbling as the market gives up Wednesday’s post-Fed rally. Let’s get right to it! Treasury Yields Jump Treasury yields are rising today as central banks around the world join the U.S. Fed in getting more aggressive on inflation. The 10-year yield is up 13 basis points at 3.42% while the 2-year yield is up just 4 basis points at 3.26%. Those yields rise as traders sell-off Treasury notes and bonds. The recent spike in yields is a signal the market does not have faith in the short-term strength of the economy and a recession is likely looming. Fed Gets Aggressive Stocks rallied on Wednesday after the Fed approved a 0.75% rate hike, its largest since 1994. The Dow closed up 1% while the Nasdaq settled 2.5% higher and the S&P 500 rose 1.5%. Fed Chair Jerome Powell signaled the Central Bank will stay aggressive on inflation moving forward. In his post-meeting press conference, Powell said the Fed determined the larger rate hike was needed after the “upward surprise” in the May CPI. He said the bank will consider either a 50 or 75 basis point hike at the July meeting and they believe “front-loading” rate hikes is appropriate. The Fed also modified its projections for rates and the economy. The bank now sees the federal funds rate rising to 3.4% by the end of this year, up 1.5% from the March forecast. The Fed is projecting PCE inflation to remain at 5.4% at the end of 2022 vs 4.3% in March. The bank also slashed its 2022 GDP forecast to 1.7% from 2.8% in March. Check out the updated projections here. Weekly Jobless Claims Fall Less Than Expected Weekly jobless claims fell less than expected last week, remaining near a 5-month high. The Labor Department reported 229,000 Americans filed initial unemployment claims. That was down 3,000 from the previous week’s revised level but higher than expectations for 220,000. Continuing jobless claims were unchanged at 1.31 million in the week ending June 4. Housing Starts, Building Permits Tumble In May Homebuilder stocks are falling ahead of the open after U.S. home construction slowed sharply in May. The Census Bureau reported housing starts plunged 14.4% last month to a seasonally adjusted annual rate of 1.55 million units. That missed economists’ expectations for a SAAR of 1.68 million units. Toll Brothers (TOLL) shares are down 2.3% while Lennar (LEN) is slipping 2.5%. That slowdown in building is expected to continue as building permits fell 7% to a SAAR of 1.7 million units vs 1.78 million expected. Starts on single-family homes fell 9.2% with permits falling 5.5%. Apartment starts plunged 26.8% and permits dropped 10%. Higher mortgage rates are slowing demand across the housing market, including for new construction. Mortgage News Daily shows the average 30-year rate slipped to 6.03% today after hitting 6.28% earlier this week. Gas Prices Fall U.S. gas prices fell further overnight. AAA shows the national average for regular gas dipped to $5.009/gal today, down from $5.014/gal on Wednesday. That price is still 52 cents higher than a month ago and $1.934 higher than a year ago. But diesel prices are still pushing to new records. The national average for diesel jumped to $5.786/gal today from $5.780 on Wednesday Oil Prices Fall After Fed Rate Hike Oil prices are falling today on economic growth concerns after the Fed rate hike on Wednesday. West Texas Intermediate crude futures are down 1.3% at under $114 bbl while Brent crude futures are down 1.2% at $117 bbl. The Energy Information Administration reported Wednesday that U.S. crude production increased by 100,000 barrels per day last week to 12 million bpd. That’s the highest level since April 2020. The EIA also reported that U.S. crude inventories rose by 2 million barrels vs expectations for 1.1 million barrel decrease. But gas stockpiles fell by 700,000 barrels vs expectations for a 100,000 barrel increase. In a letter to Exxon Mobil (XOM) and Chevron (CVX), President Biden said, “At a time of war – historically high refinery profit margins being passed directly onto American families are not acceptable.” He demanded U.S. refineries “take immediate actions to increase the supply of gasoline, diesel, and other refined product.” Revlon Files for Bankruptcy Revlon (REV) shares have been halted in the premarket session after the cosmetics giant filed for Chapter 11 bankruptcy protection. The company filed Wednesday evening, citing a large debt load and supply chain struggles. Revlon said it expects to receive $575 million in debtor-in-possession financing from its existing lenders. The filing said the company is unable to timely fill nearly 1/3 of consumer demand due to issues in the supply chain. The President and CEO said, “Today’s filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth.” She added, “Our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand.” In Case You Missed It Homebuilder sentiment tumbled to a 2-year low this month. The National Association of Homebuilders sentiment index fell 2 points to 67, in line with economists’ expectations. That was the lowest reading since June 2020. Buyer traffic tumbled 5 points to 48, falling into negative territory for the first time since June 2020.
Continue Reading -->Coffee With Greta: Stocks Bounce on Fed Decision Day
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +191 (+0.6%) SPX Futures: +31 (+0.8%) NASDAQ Futures: +115 (+1%) Good morning friends! Futures are rising as traders brace for a big Fed rate hike. Let’s get right to it! Fed Decision Day The Federal Reserve releases its rate hike decision at 2:00 p.m. ET today with Chair Jerome Powell’s press conference at 2:30 p.m. ET. CME Group’s FedWatch Tool shows the market sees a 98.6% chance the Central Bank will raise the federal funds rate by 0.75%. Traders ramped up those expectations after the May CPI and PPI both came in hot. It would be the biggest hike in 28 years, as inflation stands at a more than 40-year high. Analysts expect a steep sell-off if the Fed sticks with a 50 basis point hike instead as the bank appears to be way behind on inflation. The bank is also expected to adjust its future outlook for more aggressive hikes. Economists expect the Fed to lower its GDP forecast and raise its forecast for inflation and unemployment. Retail Sales Drop U.S. retail sales fell for the first time in five months in May as inflation squeezes consumer spending. The Commerce Department reported retail sales fell 0.3% last month to $672.9 billion. That missed economists’ expectations for a 0.1% increase. Gasoline sales surged 43.2% compared to a year ago as gas prices began their record-breaking climb in May. The monthly drop in overall retail sales was mostly due to a decline in auto purchases. Excluding autos and gasoline, so-called core retail sales rose 0.1%. But that was lower than expectations for a 0.8% increase. And when adjusted for inflation, real retail sales tumbled more than 1%. Crypto Collapse Continues The meltdown in the crypto market is continuing. Bitcoin is down 4.6% in the past 24 hours at just over $21,000 while Ethereum is 7.6% lower at $1,100. Bitcoin hit a low of around $20,200 earlier in the morning. The coin is down more than 70% from its all-time high in November. Coinbase (COIN) shares are sliding 1.9% ahead of the open. Gas Prices Slip from Record-High U.S. gas prices took a break from their record-breaking climb today. AAA shows the national average for regular gas dipped back to $5.014/gal today, down from $5.016/gal on Tuesday. That price is still 54 cents higher than a month ago and $1.938 higher than a year ago. But diesel prices did not follow suit. The national average for diesel jumped to $5.780/gal today from $5.775 on Tuesday. Oil Prices Fall Ahead of Fed Rate Hike Oil prices are slipping amid fears of an economic slowdown ahead of the Fed rate hike. West Texas Intermediate crude futures are down 0.4% at $118 bbl while Brent crude futures are falling 0.2% to $121 bbl. The American Petroleum Institute reported late Tuesday that U.S. crude inventories rose by 736,000 barrels last week while gasoline stockpiles fell by 2.2 million barrels. The Energy Information Administration reports official inventory levels today. Analysts expect the EIA to report a 1.1 million barrel decline in crude inventories and a 100,000 barrel increase in gas inventories. Mortgage Demand Rebounds, Rates Soar Mortgage demand rose slightly last week but is still down sharply compared to a year ago. The Mortgage Bankers Association reports new purchase applications rose 8% weekly but were down 16% year-over-year. Refinance applications were up 4% weekly and plunged 76% annually. Overall application volume was down 52.7% compared to a year ago. The average 30-year contract rate rose to 5.65% last week from 5.40% the week before. But that rate has since skyrocketed. Mortgage News Daily shows the average 30-year rate rose 10 basis points on Tuesday alone, to 6.28%. That jump came after a 33 basis point increase on Monday. It’s the first time mortgage rates have been above 6% since 2008. Homebuilder Sentiment Expected To Fall The National Association of Homebuilders releases its June sentiment index at 10:00 a.m. ET. That survey is expected to fall to 67 from the 2-year low of 69 in May. The index measures sentiment about current market conditions, buyer traffic, and expectations for 6-months from now. It would be the fifth straight month of declining sentiment as builders struggle with ongoing supply chain issues, a labor shortage, and now rising mortgage rates. In Case You Missed It Compass (COMP) and Redfin (RDFN) announced job cuts on Tuesday as the housing market slows. Compass is cutting 10% of its total workforce while Redfin is laying off about 8% of its employees. The job cuts come as rapidly rising mortgage rates have squeezed homebuyers.
Continue Reading -->Coffee With Greta: Bear Market Bounce Time?
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +134 (+0.4%) SPX Futures: +23 (+0.6%) NASDAQ Futures: +103 (+0.9%) Good morning friends! Futures are bouncing a day after the S&P 500 notched a new low for the year and closed in an official bear market. Let’s get right to it! Wholesale Inflation Surges Producer-side inflation pressures surged in May. The Bureau of Labor Statistics producer price index jumped 0.8% monthly and 10.8% year-over-year. The monthly gain was in-line with economists’ expectations and was a doubling of 0.4% in April. The core PPI, which excludes food, energy, and trade, rose 0.5% monthly and 6.8% annually. That was slightly lower than the 0.6% estimate but an increase from 0.5% in April. The PPI is a forward looking indicator for the CPI, as producers pass-down higher costs to consumers. Economists Expect Larger Rate Hike Economists are hiking their expectations for this week’s Fed meeting. Goldman Sachs economists said Monday they were officially altering their expectations to a 0.75% hike instead of just 0.5%. This comes after the Wall Street Journal reported on Monday the Fed is likely to consider that larger move. Before Fed officials entered their pre-meeting quiet period on June 4, they signaled plans to stick to a 0.5% hike. But they also said that depended on the evolving inflation situation. Since then both the May CPI and PPI came in hotter-than-expected. In an interview last month, Fed Chair Jerome Powell said, “What we need to see is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don’t see that, then we’ll have to consider moving more aggressively.” CME Group’s FedWatch Tool shows 94.8% of traders now expect a 0.75% rate hike while just 5.2% are anticipating a 0.5% hike. The Fed meeting kicks off today, the rate hike decision will be released at 2:00 p.m. ET on Wednesday, followed by Fed Chair Jerome Powell’s press conference at 2:30 p.m. ET. Bitcoin Tumbles to $22,000 Cryptocurrencies are falling further today as traders continue to dump risk assets. Bitcoin is down another 8.6% in the past 24 hours, trading just above $22,000. The coin briefly dropped below $21,000 earlier in the morning. Ethereum is down 6.4% at under $1,200. The global crypto market cap is down to $967 billion, under $1 trillion for the first time since February 2021. Coinbase Lays Off 18% of Workforce Coinbase (COIN) shares are tumbling 6.2% in premarket trade after the company announced it will layoff 18% of its workforce. The crypto exchange sent an email to employees this morning about those cuts. Coinbase has about 5,000 full-time workers, which means around 1,100 people will be let go. In the email, CEO Brian Armstrong said in the email, “We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period.” He added, “Our employee costs are too high to effectively manage this uncertain market. While we tried our best to get this just right, in this case it is now clear to me that we over-hired.” Oracle Rallies on Strong Earnings Oracle (ORCL) shares are rallying 12.9% ahead of the open after beating fiscal Q4 expectations. The company reported adjusted earnings of $1.54 per share on $11.8 billion in revenue. That was better than analysts’ expectations for adjusted EPS of $1.37 on $11.61 billion in revenue. Oracle brought in $7.61 billion in cloud services and license support revenue vs analysts’ estimates of $7.83 billion. The company’s CEO said, “We experienced a major increase in demand in our infrastructure cloud business —which grew 39% in constant currency.” The company forecast fiscal Q1 earnings between $1.09 and $1.13 per share vs analysts’ expectations for $1.13. Gas Prices Continue Record-Breaking Climb U.S. gas prices are pushing further above $5 after surpassing that milestone over the weekend. AAA shows the national average for regular gas rose to $5.016/gal today. Diesel prices are also at a fresh record-high after cooling in recent weeks. The national average for diesel jumped to $5.775/gal today. Supply Concerns Boost Oil Prices Oil prices are rising today as supply concerns outweigh worries about the latest Covid outbreak in China and recession fears in the U.S. West Texas Intermediate crude futures are up 0.9% at $122 bbl while Brent crude futures are up 0.9% at over $123 bbl. Already tight supply has been worsened by a drop in exports from Libya. And other OPEC+ countries are struggling to meet their production quotas. The American Petroleum Institute releases its weekly report on U.S. inventories later today. In Case You Missed It U.S. consumers hiked their short-term inflation expectations in May. The New York Fed’s survey of consumer expectations shows Americans expect inflation to still be at 6.6% 1-year from now. That was up from the April forecast for 6.3%. 3-year inflation expectations were unchanged at 3.9%.
Continue Reading -->Watch the 2022 Lows – They Are Everything
SPX futures are -90 handles. On Thursday, the index broke 4073 which meant risk-off and time to get short. Friday gave downside follow-through with a low of 3900. We’ll see if the 2022 low of 3810 tries to hold at first kiss into the Fed Wednesday. This is Day #3 down and the oscillator will be at -60 so it’s hard to press shorts in the morning. For tactical buys, I’d use 5-15-30 minute lows with signals. I’ll focus on SPY, QQQ, AAPL, AMD, and TSLA. I’m glad we’ve prioritized cash and taken risk down this year. We’ll stay prepared and try and net money short-term. Longer-term, there will be other opportunities. TSLA lost special status months ago. Last week it did a Red Dog Reversal sell around the $749 pivot and hit a low of $683 Friday. It announced a 3 for 1 stock split. That wasn’t new news though. I kept some from buying it Friday. We’ll see if it shows some relative strength for a cash flow long vs. a 5-15-30 minute low. $655 is support. The 2022 low is $620.57 and is very important. There might be an opportunity there but chances are the stock goes lower this summer. AMZN gave many a 25% move off the lows heading into the split. Then it gave a sell signal when it broke above $125.61 and failed. Some got short as it lost the $120.63 area. I’d cover some this morning. We’ll see how it handles the $101.26 2022 low. I’ve avoided it the past few days. I will look for a signal today. AMD got us out around $102 when it showed it’s not special in a weak market. See how it handles the $89 area, or if there’s a trade vs. a 5-15-30 minute low. META broke $194 with force to get some out of leftover longs and other short. I’ve avoided it. $169 is the 2022 low of the year to watch today. Scott’s Positions Disclosure:
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