EarningsBeats.com Digest for May 11, 2022
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Here's a Short-Term Intermarket Analysis Clue
Technical analysis provides us lots of tips and tricks to help spot key market bottoms and tops. Some of these clues are just short-term clues, while others can help us see the MAJOR market tops and bottoms. Yesterday, in my Daily Market Report to EB.com members, I pointed out that the S&P 500 continued to move to new lows, BUT.....money
had started to rotate from the S&P 500 ($SPX) to the NASDAQ 100 ($NDX). This can be a short-term reversal clue. Here's how that looked in the early afternoon on Tuesday:
Look at the action that occurred yesterday morning (between the two black-dotted vertical lines). The S&P 500 just seemed to be doing what it had done the previous few days - drop. But the "under the surface" message was changing. Money was rotating to the more aggressive NASDAQ. While this clearly is not a guarantee of
anything, it was a signal that perhaps we were ready to see a rally - even if just short-term. It also just happened to coincide with the equity only put call ratio ($CPCE) printing a half-hour reading of 1.41, which is extremely high and shows the market was growing too fearful. That combination prompted me to send an EB Special Report out as fast as I could get it out at 1:18pm ET. Subsequent to that email, we did see the market rally in the afternoon a bit further.
After a key CPI report is released this morning, we'll once again need to evaluate that "rotation" on Wednesday to see if it confirms Tuesday's action.
One day at a time.
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Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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