EB Daily Market Report - Wednesday, March 9, 2022

Tom Bowley - March 09, 2022

Executive Market Summary

Futures were very strong overnight and we've seen mostly buying today
The Volatility Index ($VIX) has fallen nearly 9% to 32; gold ($GOLD, -2.33%) is also falling in sympathy
Meanwhile, the 10-year treasury yield ($TNX) is up 8 basis points to 1.95% on the session, helping to lift financials (XLF, +4.03%), which trails only technology (XLK, +4.12%)
Energy (XLE, -3.55%), easily the best sector of 2022, is seeing a lot of profit taking with crude oil ($WTIC, -11.40%) down $14 to $109 per barrel
Cryptocurrencies are having a very strong day, with bitcoin ($BTCUSD, +9.12%) surging
Many oil names are littering the S&P 500 losers list; Moderna (MRNA, +11.99%) is finally bouncing after weeks of selling
Gambling stocks ($DJUSCA, +6.79%) are among the best industry groups
Tomorrow morning we'll get the latest on inflation; the February CPI report is due out at 8:30am ET

Market Outlook

Inflation at the consumer level will be released in the morning. Given the high volatility ($VIX), anything is possible in terms of a reaction tomorrow morning, but the following is a reminder that shows how Wall Street has reacted over the past several months to CPI reports and Fed policy statements:

Keep a close eye on that channel resistance on the NASDAQ 100 ($NDX), which is currently near 14000. The last three CPI reports (red-dotted vertical lines) have simultaneously resulted in tops in this key aggressive index.

Sector/Industry Focus

As I mentioned above, gambling stocks ($DJUSCA) are performing very well today, but this is not a healthy group. After testing centerline resistance, the PPO has rolled over and is accelerating to the downside. If this group does rally a bit further, I'd expect to see sellers show up at the declining 20-day EMA:

It looked like this group was rallying in February, only to crater on a relative basis in March. The big question to me is.....can the group climb back above its 20-day EMA? That's the first step to technical repair on this chart.

ChartLists/Strategies

Given the huge CPI report due out in the morning, I'm going to pass on ANY potential trade setups. I simply believe it's too risky to take any chances here.

Earnings Reports

Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies you own or are considering owning.

Wednesday, March 9:

CRWD, FNV, BEKE, CPB, LU ASAN, MQ, THO, OTLY, KFY, UNFI

Thursday, March 10:

ORCL, JD, RIVN, WPM, ULTA, DOCU, CLVT, STNE, LZ, FCEL, BLNK

Economic Reports

None

Happy trading!

Tom