OP Wire 4/22 (OP – Lite)

Tech Sector Weakness Drags S&P 500 and NASDAQ Down

Last week saw a downturn in the S&P 500 by 3.5% and the NASDAQ Composite by 6.1%, primarily influenced by weakness in the tech sector. The persistence of inflationary pressures raised concerns, leading to expectations of Federal Reserve rate cuts being deferred to later in the year. Conversely, the Dow Jones Industrial Average ended the week relatively steady, showing resilience amidst the market turbulence.

Anticipation Builds for Big Tech Earnings

Investor attention now shifts to the eagerly awaited quarterly earnings reports from some of Wall Street’s major tech players, scheduled for this week. Among them, Tesla, Meta Platforms (formerly Facebook), Microsoft, and Alphabet (Google’s parent company) are set to disclose their financial performance. With the tech sector experiencing significant losses recently, particularly following lukewarm earnings from chipmaking giants ASML and TSMC, market watchers are keen to see if these tech giants can inject optimism back into the sector.

Market Eyes Economic Indicators Amid Rate Cut Speculation

Amid dwindling hopes for a June rate cut by the Federal Reserve, investors are turning to key economic indicators for insights into the health of the U.S. economy. Later in the week, Purchasing Managers Index (PMI) data for April will provide crucial insights into business activity trends. Additionally, all eyes will be on the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure of inflation, expected to underscore persistently high inflation levels from March.

Crude Prices Dip Amidst Geopolitical Developments

Oil prices continued their descent last Friday, extending losses from the previous week. Optimism grew as tensions between Iran and Israel appeared to ease, lessening concerns of significant disruptions to oil supplies from the region. Both U.S. crude futures and Brent contracts dropped by 0.6%, with crude benchmarks recording their most substantial weekly decline since February. Contributing to the downward pressure on oil prices are reports of rising U.S. crude inventories and expectations of increased oil output from OPEC+ starting in July.

From yesterday’s Pick Yer Ticker feed post:

$AAPL ER is 5/2 Currently sitting on support at 165.  If that breaks, not another level until 147.75.  If it holds, resistance is about 170.40. Bullish above $170.80 mark with more confidence VOLUME 68.15mil shares, +16.9% compared to typical daily volume over the past 6 months. Typical daily volume is 58.3mil shares over the past 6 months. PE 25 $AMD- Support at 144 area.  Could be wedged between there and 154.75. for a bit.  Otherwise the next resistance above is 163.50-excessive down from last close, expect to pause/stop. VOLUME 71.62mil shares, +7.7% compared to typical daily volume over the past 6 months. Typical daily volume is 66.53mil shares over the past 6 months. PE 280 $AMZN- Been as bearish as most stuff.  Could be late to the party.  It’s in a support zone now, but if it breaks below, next is 167.15.  Next resistance is 179.20- excessive down from last close, expect to pause/stop. VOLUME 56mil shares, +21.7% compared to typical daily volume over the past 6 months. Typical daily volume is 46mil shares over the past 6 months. PE 60 $NVDA- Back under major zone, so that has become the next resistance level at 793.  Support is way down at 701.75- excessive down from last close, expect to pause/stop. VOLUME 87.52mil shares, +84.6% compared to typical daily volume over the past 6 months. High Volume alert! Typical daily volume is 47.41mil shares over the past 6 months. PE 63 $TRIP- Looks similar to NVDA.  Resistance at 26.40.  Support at 23.90. VOLUME 1.73mil shares, -25.1% compared to typical daily volume over the past 6 months. Typical daily volume is 2.31mil shares over the past 6 months. RALLIES/PULLBACKS** Current price area Typical: 2.43 pts (9.7%) occurs 25% of the time. Extreme: 3.16 pts (12.6%) occurs 5% of the time. PE 407

SPY/SPX- This week we see whether sellers can continue the directional move lower. If weakness continues below 5000, it will tell us that the directional moving following the daily breakdown a couple of weeks ago is not yet complete. Continued weakness below 5000 would show a move into 4940, 4900 and potentially 4830. If buyers step in to defend 5000, price can show a retest of 5035, 5080, and 5120. The broader context and structure remain a downtrend following the daily breakdown a couple of weeks ago. The daily chart now shows 6 consecutive days lower, so a bounce should be expected soon. When it does materialize, that low will be a great reference point for establishing whether buyers are really stepping in or not.

Upside levels of interest: 5035, 5080, 5120

Downside levels of interest: 4940, 4900, 4850

Notable Economic Data

• Tuesday: 2Y Auction
• Wednesday: 5Y Auction
• Thursday: GDP, Jobless Claims, 7Y Auction
• Friday: PCE

Notable Earnings

• Tuesday: UPS, TSLA
• Wednesday, BA, META
• Thursday: GOOGL, MSFT, INTC, ROKU

Hey OP. Hope you all had a great weekend. Let’s get back to stacking and protecting 💪

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