The stock market took a heavy blow today as the release of the JOLTS report sent shockwaves through Wall Street. Rising rates, economic uncertainty, and sell-offs across sectors left traders scrambling to adapt.
What Happened?
- The JOLTS report, released 30 minutes into the trading session, exceeded expectations and sparked fears of prolonged Fed rate hikes.
- This news triggered a steep sell-off, with the TLT dropping sharply and rates climbing higher.
- The market turned into a trend day, with every bounce getting sold off, creating challenges for traders.
Key Highlights of the Sell-Off:
- Large-Cap Stocks Struggled:
- Nvidia saw its biggest down day in months, dropping over 14 points.
- TSM, which recently broke out, had a rough day, retracing gains.
- Quantum Stocks Tanked:
- A statement during CES predicted no quantum computing breakthroughs for 15–30 years, causing stocks like QUBT and SOUND to plummet.
- Speculative Stocks Suffered:
- Small caps and speculative names, which had been grinding higher, faced sharp declines.
What’s Next?
The market is at a critical juncture, testing key levels on indices like the QQQ and SPY:
- The 50-day moving average is holding, but repeated tests could signal more downside ahead.
- Rates continue to climb, creating headwinds for equities, particularly tech-heavy names.
Top Stocks to Watch:
- Potential Longs:
- PLTR: Testing the 50-day moving average; could bounce if the market stabilizes.
- Meta (META): Tightening up for a potential breakout after testing key support levels.
- VST & GEV: Utilities showing resilience amidst broader market weakness.
- Potential Shorts:
- UPST: Bear flag under the 50-day moving average, with room to fall further.
- Adobe (ADBE): Breaking multi-year support levels with significant downside potential.
- Oracle (ORCL): Clear bear flag forming, signaling potential continuation of the downtrend.
Key Trading Strategies:
- Be prepared for both longs and shorts: The market is in a choppy phase, making it crucial to remain flexible.
- Use tight stops: Protect your capital in this volatile environment.
- Watch key levels on major indices: Breakouts or breakdowns will determine the next move.
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