Crypto Stocks Get the Meme Stock Treatment While Utes Get Oversold
Lots of movement in the oddball names, but the indicators have not changed.
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The Market
There were a lot of haphazard moves in some meme-type and small-cap names, but overall, everything else seemed pretty much status quo. And again, there was no change in the indicators.
I wish I could tell you something moved, but it’s the sort of market where someone is announced as a board member to a crypto company and the stock goes from a buck to $44. I am not even sure we saw that sort of nonsense during the dot-com era, although we probably did.
Even sentiment has barely budged. The DSI, which is the most sensitive because it moves daily, shows bonds at 76. Can you believe with the move we’ve seen in bonds, they are not in the 80s? They are not. Maybe folks are holding back due to the inflation data we get later in the week.
The S&P sits at 73, also neutral. Nasdaq is at 75. Again, neutral. Oh, sure, they are all leaning high, but until they cross over that threshold into the 80s, they are only leaning that way. Even the VIX’s DSI is still in neutral territory at 24.
Gold, however, is back at 87. And Silver is at 86. Imagine if we get another push in GLD to 340 tomorrow or the next day, and the DSI gets over 90? That would be actionable.
I would end by noting the Utes are now at seven consecutive red days, so we know there is an oversold condition developing. Again, I think I am early in bottom fishing them, but we’re getting to the neighborhood.
New Ideas
I was asked to follow up on Applovin APP because I had had a measured target of 475, and with today’s news of its inclusion in the S&P, it gapped up to near 550.
It hasn’t done anything wrong, but lately the stocks added to the S&P have popped and given quite a bit back thereafter. A pullback to support at 500 wouldn’t surprise me.
Also, as a follow-up, CoreWeave CRWV has formed a small W pattern. As long as that doesn’t break this bounce should continue. If it doesn’t work quickly, I’d get out.
The restaurant stocks had a bad day, so let me point out that a very non-hot (!!) Cheesecake Factory CAKE would be bad if it breaks 60. They have the longest menus I have ever seen!
Today’s Indicator
The 30-day moving average of the advance/decline line is a little bit oversold this week. Very little.
Q&A/Reader’s Feedback
DR Horton DHI has done well since I liked it a few months back. It still hasn’t done anything wrong. There is some resistance from the highs of a year ago, but there is an unfulfilled measured target around 225. I’d love to see the stock correct some, even down to the 170 area, would be helpful.
Finance of America FOA has a better weekly chart than a daily chart. A pullback all the way to that 20 area would not spoil the weekly chart, but would certainly make that daily chart look dicey. The stock trades so thin that it could get over 30 and move back to 20 in a heartbeat, so I’ll just say that as long as it stays over 20, it gets the benefit of the doubt.
Dominion Energy D reached a measured target when it got up near 62 a month or so ago. It ought to get oversold somewhere in that 57 area. It’s probably a buy down there, but it would be best if a pattern sets up (think W).
Dell DELL is in a funny spot. It’s got support around 110, but a break of this 120 area measures closer to 100, maybe enough to fill that gap around 95. On the upside, filling that gap at 135 is probably the best it can do for now. It truly feels stuck between support and resistance, and I always prefer a move down to support to flush it out.
I don’t love the chart of Blackrock BLK, but it hasn’t done anything wrong yet. I’d get concerned if it broke under 1050; otherwise, there doesn’t seem much to do except hold it.
Add Vera Bradley VRA to the list of retailers that are down and out and finally moving. I think it can get to 2.75 but that spike high from June will be a short-term problem for it.
They say no one is drinking anymore, which must be why Boston Beer SAM is so far down. If the stock can’t get over 230 in the next few weeks, I would start to fret because then the pattern would look somewhat similar to the pattern that developed from February to May.
I really thought Moderna MRNA would hold over 25, but I was wrong. Watch it here for signs of bottoming, though. So many of these biotechs have begun to improve (I still like XBI, although it could use a pullback), so if MRNA can hold down here, it could start to improve. Note, though, that being a stock at/near the 52-week low will put it in the tax loss selling pool as we get into the fourth quarter, so treat it as a trade for now.
DiDi DIDIY has a next target around 7 and then one around 7.50, so unless it cracks back under 5.50, it ought to get there.
