EB Daily Market Report - Thursday, May 19, 2022

Dear Members.

First, a reminder that the "Top 10 Stock Picks" Webinar is today at 5:30 PM EST. Here is a link to the event:

https://earningsbeats.zoom.us/j/88346562582

The room will open 30 minutes prior to the start and the event will be recorded for those of you unable to attend the live presentation.

Another volatile day with the Dow and S&P showing the most weakness with the NASDAQ yo-yoing between green and red as traders try to determine if we're nearing a bottom.

One thing we've noticed is continuous put/call readings of over 1 since yesterday afternoon showing a great deal of bearishness just one day ahead of options expiration. And this comes as the S&P got within less than 20 points of the most recent low of 3858.

Anecdotally, I heard a report today that indicated hedge funds are piling in on the short side. This comes just as Melvin Capital (infamously known for a huge short position in Gamestop that cost it billions of dollars) closes its doors after huge losses. So there are increasing signs that we just might be getting close to some type of bottom though that has not yet been confirmed.

With monthly options expiring tomorrow we're going to continue to see a great deal of volatility. Add to the mix a VIX reading above 30 and you can be sure traders will continue to be on edge, at least in the near term.

It would be bullish if the major indexes managed to turn green into the close. That would at least put the shorts on notice that the bulls may have had enough. In the meantime, we need to continue to keep an eye on that 3858 level on the S&P as any close below that level would increase the odds of further selling.

Tom will be back with his full Daily Market Report tomorrow.

At your service,

John Hopkins