EB Daily Market Report - Wednesday, March 29, 2023

Tom Bowley - March 29, 2023

Mark Your Calendar

We're planning to provide everyone a Market Outlook webinar on Saturday, April 15th. It'll likely start at 10:00am and last 1 1/2 to 2 hours. We'll provide more information as we get closer to the event. Let family and friends know as we're planning to open this up to the public. I want to get the word out to as many folks as I can given all the media negativity. Folks need to see the other side of the story, not just the one that CNBC wants you to hear.

ChartLists

My plan is to update all key ChartLists by this weekend. I also am looking to provide everyone the April Seasonality and April Short Reports by this weekend as well. Yes, it's a lot of work, but the updated research before April kicks in is important.

Executive Market Summary

Futures were strong overnight and we saw leadership from the NASDAQ as stocks opened much higher
The NASDAQ 100 is threatening a very bullish cup with handle breakout; it could happen at today's close
Cryptos are very strong as bitcoin ($BTCUSD, +3.68%) and litecoin ($LTCUSD, +4.25%) lead the pack
Most commodities are lower, though fractionally so; crude oil ($WTIC, -0.23%) has reversed below $73 per barrel
The 10-year treasury yield ($TNX) was up 4 basis points to 3.61% to test its declining 20-day EMA, but has since fallen back to 3.57%, flat on the session
Technology (XLK, +1.95%) leads all 11 sectors higher; real estate (XLRE, +1.81%) and consumer discretionary (XLY, +1.60%) are also quite strong
Intel (INTC, +7.78%) is the best-performing S&P 500 stock today, clearing multi-month price resistance - very bullish
Lululemon Athletica (LULU, +12.86%) is up on massive volume, following its quarterly earnings results, which surpassed consensus estimates

Market Outlook

I'm watching the NASDAQ 100 (and its ETF, QQQ) closely, looking to see if we can get that cup with handle breakout. I'd prefer a close at 12900 vs. a not-so-clear breakout of say 12800. Clearing the intraday high (12943.62) from Fed day last week would really add to the short-term bullishness:

This was the chart I showed last Thursday (March 23). The bulls have a chance here in the final hour to make a statement. Eventually, I see us breaking out, but for me, the sooner the better.

Sector/Industry Focus

Technology (XLK) continues to flex its market-cap muscle. When the XLK is moving higher, it's very difficult for the S&P 500 to drop. That's especially true of tech-laden NASDAQ. Despite all the recent market turbulence, weakness, and consolidation, the XLK is looking to close at its highest level since August 19th, just before the infamous Fed Chief Powell speech from Jackson Hole. I honestly don't know how anyone can look at the XLK chart right now and have overly bearish thoughts:

The AD line continues to support this trend higher, suggesting that Wall Street is behind this move. I didn't add it to this chart, but the XLK:$SPX (technology relative strength) is challenging its all-time high. That makes me feel particularly good about being bullish.

ChartLists/Strategies

I've taken short-term profits on two stocks I provided last week - FL and WGO. I wanted to get a few days out of the stocks and see if they could test their 20-day EMAs. Neither one made it and I continue to favor FL over WGO as FL seems to be showing more in the way of industry group leadership. A profit is a profit. I entered two others today with the proceeds:

PATH:

Love the 20-day EMA test and reversal. Volume trends are strong here as well. Looking for a move back to roughly 17.75, although I expect to eventually see a breakout here.

OLLI:

Raised its guidance last week and gapped nicely higher. After short-term weakness, I was able to pick it up close to its 20-day EMA. I'll exit on any close beneath the two key moving averages shown above. My target is the open after guidance was raised - just below 62.00.

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.

Wednesday, March 29:

CTAS, PAYX, CNXC, RH, FUL, VRNT, SMTC, KC

Thursday, March 30:

AUY, FIZZ, MANU, BRZE, BB, EVGO, AEHR

Economic Reports

February pending home sales: +0.8% (actual) vs. +1.0% (estimate)

Happy trading!

Tom