EB Daily Market Report - Tuesday, November 22, 2022

Tom Bowley - November 22, 2022

Holiday Schedule

There will be NO Trading Places LIVE show tomorrow morning and there will be no Daily Market Report on Friday as it's an abbreviated trading session with the stock market closing early at 1pm ET. We'll be back with our regular schedule on Monday, November 28th.

We are closing in on the end of our Fall Special - our absolute BEST DEAL of the year. If you haven't already taken advantage of the HUGE savings, be sure to CLICK HERE and do so. It's our way of saying THANK YOU for your loyalty and support.

Executive Market Summary

Futures were higher overnight, though much of that strength was in the value area once again
Growth stocks have rebounded after a poor start to the day - likely as we move away from options expiration
The 10-year treasury yield ($TNX) is down 7 basis points to 3.76%, also contributing to the intraday strength in risk-on areas
Commodities are mixed, but mostly higher; crude oil ($WTIC, +1.15%) is near $81 per barrel
Energy (XLE, +3.15%) is today's leading sector after a recent string of poor performances
Materials (XLB, +2.09%) and technology (XLK, +1.66%) are also strong
Meanwhile, the recently-hot defensive sectors have cooled off today - real estate (XLRE, +0.25%) and consumer staples (XLP, +0.68%) are lagging
Best Buy (BBY, +12.24%) leads the S&P 500 after reporting its quarterly earnings

Market Outlook

One very positive signal is being sent by the transportation group ($TRAN). The group is not far from reaching its August high, its relative strength remains solid, and its AD line is setting new highs daily:

Transports are just one piece of the massive jigsaw puzzle we try to put together, but this piece of the puzzle is no doubt bullish. Transports also LOVE the month of November, which isn't hurting:

This simply highlights the fact that transports have outperformed the S&P 500 in 13 of the last 14 years and its average outperformance is 2.2%. Not bad.

Sector/Industry Focus

Internet stocks ($DJUSNS) have had a very rough 2022 and they're still not showing much relative strength. But the absolute price chart is showing some bullishness. Now, if we could just get some relative strength:

Clearly, the downtrend, on both an absolute and relative price basis, continues. But the blue circle does highlight the "kick save" today at the 20-day EMA. The day isn't over and we could see a very weak finish, but it feels like the group is making a very important save at support. There is still BIG resistance ahead, especially where that quadruple bottom support failed to hold. Just getting back to that level, though, would represent close to a 15% rally from current price. The bottom panel highlights just how bad internet stocks have been. They have badly lagged the S&P 500 at a time when the S&P 500 was performing at one of its worst levels of the past 7 decades. That really puts everything in perspective here.

ChartLists/Strategies

Nordstrom, Inc. (JWN) is on our Short Squeeze ChartList (SSCL) and it's part of the red-hot apparel retail space ($DJUSRA). It's perhaps the best-looking chart among stocks heavily shorted:

Short sellers are likely very nervous, hoping that critical gap resistance holds. Volume has picked up well above its 50-day SMA, but other technical conditions are bearish. JWN has been an awful relative performer among apparel retailers and its AD line isn't budging higher. Let's see how this one finishes.

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 several 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.

Tuesday, November 22:

MDT, ADI, ADSK, DLTR, BIDU, HPQ, BBY, WMG, BURL, DKS, VIPS, JWN, CSIQ, AEO, JACK, GES

Wednesday, November 23:

Economic Reports

None

Happy trading!

Tom