Trading charts for Thursday, February 23rd
Good morning and Happy Thursday,
Markets were yesterday although off their mid-day highs because we did see some selling after the FOMC minutes were released. It didn’t contain anything surprising — simply confirmed the FOMC is willing to keep raising rates until they see inflation coming down and so far we’re not there. It definitely seems like the Fed Funds terminal rate is going to be closer or slightly above 5.5% which means 5.75% is also in play if we don’t start seeing better CPI & PPI reports (meaning that MoM number needs to be under 0.2%).
Equity futures are looking decent this morning (as of 5:30am EST) thanks to a better than expected report from NVDA yesterday after the close.
We also had a slew of earnings reports from companies like TMDX ETSY EBAY U RXT TDOC BROS MGNI and many others. I’ll be watching some of those stocks today for possible trades although this market still has me feeling very cautious. Very few trades have been working this week with most breakouts failing and too many morning gap downs. I keep saying the market doesn’t really have any catalyst to move higher and I think we’re seeing that play out which means lots of chop and nasty intraday reversals so you need to keep those stop losses tight. There’s always a stock breaking out somewhere but for every 1 stock breaking out it seems like there’s 20 more stocks breaking down which means we’re seeing more bounces off support levels/areas like moving averages and VWAPs.
Lots more earnings reports today both before the open and after the close. Some of the names I’ll be watching are MELI LNTH SQ MRNA GRAB RSKD BYND PLNT DH BKNG and OII — I own the first 3 stocks.
Feels like the market likes to create these new narratives every few months and rally 10-15% into the prior highs but then reality kicks in and investors realize valuations are stretched and the FOMC is still a headwind so then we get some selling. Then it’s rinse and repeat all over again :)
Regardless of what happens today I’m just happy one of my favorite stocks (TMDX) should be up 12-16% off of better than expected earnings last night.
Yesterday I created this spreadsheet comparing some of the cybersecurity stocks on valuation [click here].
Below the paywall is my current trading portfolio (1 stock, 5% invested) and watchlist (15 stocks with charts) including a link to my trading portfolio spreadsheet (with entry prices, position sizes, stop losses & YTD performance). You also get links to my two daily Zoom sessions at 10:30am EST and 3:30pm EST where I review charts for both my portfolios plus my watchlist stocks and explain where & why I started new trading positions or closed out existing ones.