Stocks Jump, But Don’t Expect It To Last
Michael Kramer | Dec 02, 2021 11:59PM ET
Stocks continued to whip around, with the S&P 500 finishing up 1.42% yesterday. Essentially, the market has gone nowhere since Tuesday. A lot of things could change following the BLS job report today. Based on initial jobless claims, I’d be shocked if the payroll number missed the estimates for 550,000.
Yesterday, the market just snapped back from some oversold conditions, and I don’t see much else here. The S&P 500 has done nothing despite having massive trading ranges the past few days. I don’t think that will change much tomorrow, with plenty more volatility.
h2 S&P 500/h2There appears to have been a bear flag that formed in the S&P yesterday, and the index broke through the uptrend of that flag around 3 PM and then retested the trend line again right before the close. That could result in a move back down to 4550 today. If we break 4500, things could quickly become dicey, as many open gaps do not conclude 4,370. There is a huge gap that still needs to be up at 4,700.
Also, there is a sort of a pennant pattern in the QQQs. I wouldn’t say I like the chart’s look, with the opportunity for a Head And Shoulders pattern and that monster gap down at $360 that needs to be filled.
Meanwhile, the VIX came down some yesterday, which led to a significant boost in the market. But I’m not sure that VIX will keep coming down, especially if we keep seeing rates rise. The VIX is strongly correlated to bond ratios, and when ratios and spreads are getting large, the VIX tends to go higher.
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Goldman Sachs had a strong day yesterday, rising 2.9%, but it has that whole double top thing going on with it, and sitting on support at $375 makes this one vulnerable to a big turn lower.
Microsoft doesn’t have the most fantastic look at this point, and it also has a big gap that needs to fill down around $310.
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