EB Daily Market Report - Wednesday, May 18, 2022

Dear Members.

Today and tomorrow will be abbreviated reports as Tom Bowley prepares for the Top Ten Stock Picks webinar that will take place tomorrow afternoon.

The market is under severe pressure with the Dow down over 1,000 points and the NASDAQ over 500 points as traders move to the sidelines. We've seen a lot of this lately with any rallies met by heavy selling. All of the major indexes remain below all key technical levels and within striking range of the recent lows.

It hasn't helped that two of the largest retailers, Walmart and Target, missed earnings expectations with the XRT, a broad based retail ETF, down almost 9%.

Interestingly, this heavy selling comes with monthly options expiring on Friday with a disproportionate number of puts throughout the broad market and with the most recent put/call ratio printing over 1.50%, a very bearish reading. So might we see a significant rebound into week's end? It certainly doesn't feel like it today but stranger things have happened.

The most recent low on the S&P was 3858 so this is a level we'll want to keep an eye on. Should that level go then we're likely heading even lower.

I will be back tomorrow with another brief market update.

At your service,

John Hopkins