EB Daily Market Report - Monday, January 30, 2023
Executive Market Summary
- Futures were down overnight and our major indices gapped lower
- We've seen mostly weakness throughout the day, not unusual for a Monday, and certainly not too surprising with the next Fed meeting starting tomorrow
- The Volatility Index ($VIX, +8.64%) has spiked, likely in anticipation of more intraday volatility into the Fed meeting
- 10 of 11 sectors are lower; only the defensive consumer staples (XLP, +0.11%) sector is higher
- Energy (XLE, -2.27%) and technology (XLK, -1.75%) are the primary laggards
- Crude oil prices ($WTIC, -2.38%) have dropped back below $78 per barrel, spurring today's sellers in energy
- Other commodities are mixed, though natural gas ($NATGAS, -6.14%) continues its recent free fall (see below)
- Tesla (TSLA, -5.49%) is seeing profit taking after a huge recent run and is the worst S&P 500 performer today
Market Outlook
Will the Dow Jones chart morph into a bullish symmetrical triangle?
A break above the upper downtrend line would be extremely bullish. Until then, however, I'd look for further consolidation within this triangle. I love the AD line, which continues to rise to new highs, but we'll need to negotiate this next Fed meeting before thinking about higher highs.
Sector/Industry Focus
Natural gas ($NATGAS) has been under a ton of selling pressure in recent weeks, but I'm guessing that it's getting fairly close to a key bottom. Check out the head & shoulders breakdown and the potential measurement:
This chart does not reflect today's 6% drop, but $NATGAS is currently at $2.67, which isn't far from the current measurement near $2.50. There's also a bit more price support as we near that $2.50 level.
ChartLists/Strategies
Trading only a few stocks is probably best right now as our major indices roll back over short-term and with the Fed meeting now upon us. I'm not sure that Fed Chief Powell will say anything to kill the recent rally, but he did kill the mid-June through mid-August 2022 rally almost single-handedly with his "more pain ahead" speech from Jackson Hole. If he decides to go off script and editorialize again, anything is possible.
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.
Monday, January 30:
NXPI, GEHC, ARE, CAJ, PFG, RYAAY, BEN, PHG, ELS, GGG, WHR, AGNC, CFLT, SOFI, HP, PCH, SANM, HLIT
Tuesday, January 31:
XOM, PFE, MCD, UPS, CAT, AMGN, AMD, CB, SYK, MDLZ, UBS, CP, MPC, MCO, PSX, GM EW, MSCI, SYY, EA, IMO, GLW, DOV, SPOT, IEX, SNAP, MTCH, WDC, IP, HUBB, PHM, DOX, BXP, JNPR, AOS, LII, RNR, PNR, UNM, NATI, ST, ALGM, HLI, OSK, PII, CACC, ASH, AQUA, MAN, SMCI, KEX, MMYT, OI, MRCY, APAM, MDC, CVLT
Economic Reports
None
Happy trading!
Tom