After absorbing a slew of bad retailer earnings reports and numerous hawkish Fed statements, the market finally rallied last week and put a weekly cycle bottom in place. The S&P 500 corrected almost 21% peak to trough. If this reversal is durable, meaning if the rally can last all the way to late summer and early fall, then the market is forecasting
Last week major retailers such as Walmart and Target released bad earnings for Q1 and weak forecast for Q2 2022. Rightfully both stocks were punished severely along with the entire the market. All three indices made a new low last Friday, but the market was able to crawl back to close above their perspective
Fed Chair Powell made statements last Thursday about two more 50-basis point rate hikes, one in June and one in July with the possibility of a hard landing, meaning the economy might tip into recession later on. The S&P 500 fell to 3858 as Chair Powell was speaking. 3858 was just above our target of 3815,
Last week the market was having spasms and tantrums all over, up and down in big ways after the Fed announced a 50-basis point hike on Wednesday. The market is under extreme stress, something is going to step in to stop this level of volatility. It is just not normal for the market to be up or down 3-5% this frequently.
Last week the NASDAQ violated the March 14th seasonal low while the DOW and S&P 500 kept their February seasonal low intact. A typical stock market seasonal low can occur between February and March. All three indexes closed in a weak position at month end in April, which means more lows are to follow.
