Stocks Float Higher, But Probably Not For Long
Michael Kramer | Jun 22, 2022 02:40AM ET
Stocks had a big rally yesterday, with the S&P 500 up 2.45% and the NASDAQ 100 ETF QQQ rising by 2.33%. The rally wasn’t a surprise, given we have seen these countertrend rallies follow OPEX regularly. What was surprising was how quickly the market rallied. I’m skeptical of this rally continuing now. I was only looking for a gain to around 3,800 on the S&P 500, and most of that rally was already fulfilled. I think we could even refill the gap below 3,700, maybe as soon as today.
The VIX was hardly down yesterday, despite the big rally, dropping by less than 1 point to close at 30.20. I would have expected a more significant drop in the VIX given the big rise in the S&P 500. This is all contributing to my suspicions about this rally.
Of course, today will be Jay Powell’s turn to go in front of Congress, which presents a risk to equities.
Additionally, financial conditions tighten yesterday, as measured by the IEF/LQD ratio, and usually, when spreads widen, it is not favorable for stocks. The ratio hasn’t broken out to new highs, but it needs to be watched closely.
Meta (NASDAQ:META) keeps dropping, falling another 4% yesterday. I don’t know what is going on here. Clearly, something is not good. Maybe they shouldn’t have changed the name from Facebook. However, the $155 level is essential from a technical basis because if support breaks, the next region for support will come at the pandemic low of around $139.
Get The News You Want
Roblox (NYSE:RBLX) seems to again be in a position to break out as the RSI nears potential resistance levels and the stock price approaches a downtrend. This is the stock’s second attempt since June to breach that trend line.
Anyway, that’s going to be it for today.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.