Gene Peroni's Daily Podcast

The Dow and the Nasdaq each breaking out above their respective 50-day moving average levels and doing so convincingly from a technical perspective. 

Yesterday’s trading action didn’t bring much to the table technically, but the 50-day moving average levels did play a prominent role for the major market indices. 

Since early May, one of the best-performing sectors has been healthcare but one of the worst-performing groups has been the financials; I mention this because this week kicks off the 2Q earnings reporting season. 

Clearly the stock market is in a better place today than it was a few weeks ago, from a technical perspective the market has shown some constructive action. I think the real storyline here is the underlying market. 

May stands as the important turning point in the market from my technical perspective; that is we saw heightened volatility but we did see a continuously descending volatility index.

The Fed’s shock & awe attack on inflation seems to be having an impact which is reflected in the stock market’s trends. 

No surprise that investors are taking rallies at face value. It has been very frustrating in the first half of 2022 to see that rallies big and small have little substantive impact on the ongoing decline. 

The first half of 2022 is in line to be about the worst first half in 50 years for the stock market which is attributable to a number of factors, but inflation is front and center. 

Yesterday’s market action was further indication that the market is in a marathon and not a sprint as it pertains to base building and not likely to see a V-shaped recovery. 

Volatility has calmed considerably from last month’s expansive trading swings and this has been reflected in the VIX which stands under 27. 

As we count down the final days of June and the last days of 2Q I think things are shaping up quite well for the market. I believe there’s a better than even chance that the market has struck its bottom.

It remains too early to call an absolute or reliable bottom in the stock market, but this week’s action was encouraging from a technical perspective. For one, the market seemed more resilient… 

Beginning with the January 24 reversal, there were a number of significant and dramatic turns in the market but they proved to be pitfalls to lower levels. It wasn’t until May when the market began to shift… 

The market’s trading swings could consolidate into a somewhat more narrow range over the short run. For the Dow that range could be 31,000 on the upside and 29,500 on the lower end. 

The ongoing grueling market action with its expansive trading swings, especially the movements to the downside, probably indicate that we’re not in for a bell ringer bottom. 

More short-term pain for a longer-term gain seems to be the position the Fed is taking by raising rates by 75 basis points yesterday. 

Yesterday’s New York Times ran a front-page graph showing the duration of bear markets extending back to 1980. What I thought was interesting was… 

Diminishing confidence among both investors and consumers has taken its toll on Wall Street. The accelerating downtrend is based on a number of factors but the greatest is the Fed. 

Gene Peroni’s Daily Podcast: The VIX moving to 33 this morning, putting it in the thick of near-term resistance that has been playing significantly in recent week. 

Recently I noted that the Volatility Index can be subject to interpretation, but it is undeniable that in May — a pretty volatile month for stocks — the index was in a steady downtrend. 

The latest AAII sentiment survey shows more of a balance between the bulls and the bears than we’ve seen in a long time. 

A forecast for an economic hurricane played on investors’ psyche yesterday, but I would argue that it didn’t have the impact that it might have had even just a few weeks ago.