Stock Market Today: September 26th - 30th, 2022

Welcome StonkForums to the trading week of September 26th!

This past week saw the following moves in the S&P:


S&P Sectors End of Week:


Major Indices End of Week:



Major Futures Markets on Friday:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:

(N/A.)

 

If we weren't so bearish we would say it should bounce now



See TME's daily newsletter email below. For the 24/7 market intelligence feed and thematic trading emails, sign up for ZH premium here.

NASDAQ - king of mean reversion

Mean reversion is often a painful strategy. You short when everything feels great, and cover/buy when everything feels awful. On Aug 16 (here) we outlined how one should short the market even though everything felt great. Today it "feels" like everything is a mess and we are about to break down - which is usually the feeling at the lows of a range. We think it is time for the inverse of August 16 and time to start trading buy.



Source: Refinitiv
Mid June déjà vu?

The reversal in the US 10 year is significant today. This could be the short term shooting star that has rates reverse lower, at least in the short term. The set up brings memories to mid June, when rates did a similar type of reversal...and equities decided bouncing hard.



Source: Refinitiv
SPX - max agony

SPX is moving further into short gamma territory. Volatility itself isn't huge, but dealers need to sell more and more deltas the lower we move. Note this "eases" around the 3600 level. From a gamma "agony" point of view, a sharp move higher would cause the biggest problem for the short gamma dealer community as they would need to chase deltas furiously, magnifying moves in an iliquid market.



Source: Spotgamma
Say hello to extreme fear

In June we reached 17 before the market reversed...



Source: CNN
Say hello to put love

The crowd continues hating puts at local market highs, and loving puts at local market lows. They haven't loved puts this much in a long time...



Source: Tradingview
A quarter of SPX has RSI under 30

The bull in bearish breadth is getting extreme again. On the other hand, oversold can stay oversold for longer than most can stay long...



Source: Tier1Alpha
Households have puked bro

Hard to believe, but JPM's Nikos writes:

1. The US household sector appears to have returned to 2018 levels in terms of equity allocations or leverage, more than reversing the previous post pandemic increases.

2. This is another indication of how much equity investor positioning has downshifted this year, thus limiting any equity market downside from here.

Second chart shows the "shorter term" view.



Source: JPM


Source: GS
The CTA shorty

They were very short in time for the June reversal, then had to chase the bounce, and flipped into net long in time for the August reversal lower. Since then CTAs have sold aggressively and are now running net shorts. Do we see another frustrating CTA bounce? Chart shows US CTA exposure.



Source: GS
Some VIX panic is here

VIX term structure shifting sharply higher on a Friday is a sign of panic, especially as the shorter term maturities are trading in backwardation. The crowd chases short term protection when the panic kicks in, and this is exactly what we are seeing today. Nobody wanted "cheap" VIX, but they love relatively more expensive VIX. Do you go against the crowd?



Source: vixcentral
VIX caught up (partly)

More and more equity sales people have started showing us the longer term MOVE vs VIX gap. This is usually a late sign. We outlined the lagging VIX in mid August in our post, "Beyond boring equities - BIG stuff is moving". The VIX has moved sharply higher since mid August, while MOVE has done very little. People pointing out the gap here are very late to understanding cross asset volatility...



Source: Refinitiv
Under the hood "fear/panic" is here

The VIX 2/8 months futures spread has moved sharply higher over past sessions and is now at the highest levels since mid June. The spread is in "fear/panic" territory as the short end of the curve is relatively more well bid. We are far from "pure panic" though...



Source: Refinitiv
"Un-muting" the VIX

Muted VIX is gone. Back is the nervous VIX. Note that the short term gap between VIX (inverted) and SPX is now closed. Fear is here...



Source: Refinitiv
Two more things that are synonymous with a short term bottom

1. "Sell 'em all" style action this week as all major asset classes reported outflows, while inflows to money market funds jumped to the highest level since May.

2. High profile downgrade in the shape of Goldman's reduced price target for SPX.

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2022-



S&P sectors for the past week-

 

Market Atones for Sins Early

So, it might be a bit late for Sell Rosh Hashanah, but Buy Yom Kippur is looking like a good set up. A host of fears from inflation, hawkish Fed, bellicose Russia, global upheaval, US midterm politics is exacerbating the usual seasonal and 4-year cycle carnage.

The thesis is that folks sell positions on Rosh Hashanah the first of the Days of Awe to rid themselves of financial commitments and then return to the market after Yom Kippur, the Day of Atonement. It is no coincidence that this coincides with the seasonal September/October weakness.


Interestingly the Sell Rosh Hashanah/Buy Yom Kippur period is not so bad in midterm years, likely due to the fact it lands at the end of the Weak Spot and the beginning of the Sweet Spot of the 4-Year cycle – the best buying opportunity of the 4-Year Cycle.



Claims Staying Low
Thu, Sep 22, 2022

Initial jobless claims came in at 213K this week. That would have been unchanged versus the prior week, but last week's print was revised down by 5K to 208K. That modest uptick versus the revised number marked the first increase in claims in five weeks. Albeit higher, that level is still within the range of readings from the few years prior to the pandemic.



On a non-seasonally adjusted basis, claims were also higher week over week moving up to 171.6K. That increase could be expected as claims have been overdue to bottom out from a seasonal perspective as we discussed last week. That increase also does not steal from the fact that initial claims remain at historically strong levels. From here, claims are likely to continue to face seasonal headwinds through the end of the year.



As initial claims have come off of recent highs, continuing claims likewise hit the lowest level in several weeks. Seasonally adjusted continuing claims (lagged an additional week to the initial claims number) fell from 1.40 million down to 1.379 million for the lowest print since mid-July.



Earlier in the summer, we had noted how initial claims had appeared to have gotten ahead of continuing claims with the former at a comparatively higher level than the latter. That was evident by the ratio of the two surging to some of the highest levels on record. The past several weeks' decline in initial jobless claims and the little change in continuing claims have resulted in that ratio turning lower. In fact, the latest release marked the fifth consecutive decline in that ratio. As shown in the second chart below, that now stands out as one of the longer such streaks of declines on record.



Five Reasons Inflation Isn’t So Sticky
Posted on September 21, 2022

After the disappointing all around Consumer Price Index (CPI) report last week, the worries over inflation staying higher for longer (what they call sticky) is a very real worry. That report showed prices for many goods and services were increasing more than expected (even things like dental services were much higher than expected), while nearly every economist we saw on tv before the report was saying inflation had peaked and would be heading down, and in a hurry.

Full disclosure, I was in that camp as well, as I discussed with Yahoo! Finance here.

Well, it isn’t all bad news, as there are many signs inflation could still come back down quickly. For one thing gas prices continue to head lower, as my colleague Sonu Varghese recently wrote about. Sure, core consumer prices (excluding energy and food) are higher than anyone would like, but there are other types of inflation than just at the consumer level.

Here are five reasons that suggest inflation could still fall quite quickly and last month’s CPI data isn’t the beginning of a new trend.

First up, used car prices collapsed four percent last month according to the Manheim Used Car Value Index. This was the second largest monthly decline ever and the year-over-year change is down to 8.4%, the lowest since June 2020. This large drop wasn’t accounted for in the recent CPI report and will put downward pressure on prices over the coming months.



Second, how much companies are paying for things is going down and quickly. Looking at the prices paid component of the ISM services and manufacturing surveys show a big move lower the past few months. Prices paid tends to lead overall CPI by several months, and so this is another reason to think inflation could come down quickly before year-end.



Third, the ISM is a national survey, but regional surveys show similar results. The recent Philly Fed and Empire State surveys each show prices paid crashing lower.



Fourth, supply chain issues were a major reason for the huge spike in inflation. So, you would think once those supply chains begin to improve, so would inflation. The good news is we are seeing substantial improvements in supply chains. For instance, back in January more than 100 ships were caught in a logjam at the Port of Los Angeles, yet earlier this month there were less than 10 ships. And as the chart below shows, overall supply chain pressures have come down significantly. Another source of potential downward pressure on overall inflation.



Lastly, prices at the producer level have come back much quicker than at the consumer level. The Producer Price Index (PPI) year-over-year peaked at 11.6% in March, but it was already down to 8.7% five months later. Compare that with the CPI peaking at just over 9.0% and only at 8.3% currently.



So there you have it. Inflation is still a major issue, and that recent CPI report wasn’t pretty in any way. But there is light at the end of the inflation tunnel, as other aspects of inflation is showing some incredible improvement and not many people are noticing.

September to (Not) Remember

Hat tip George Noble @gnoble79 for this title from his superb Twitter Space today. He has been on point all year. Disappointing CPI and increasingly hawkish remarks and action from the Fed clearly brought the usual September peak early. But that does not mean we are out of the woods.

Late September is still a dangerous period for the market, especially month-end, and then there is Octoberphobia to contend with, which promises to be turbulent with all the market must digest. On top of the Fed, inflation, weaker fundamentals, fickle market internals, shaky technicals we have the negative seasonality from fund tax selling, end of Q3 window dressing and portfolio restructuring.

We have been cautious all year and mostly in cash, having honored our stops and indicators. June lows are only 1% away for the Dow, S&P 3.4%, NASDAQ 5.4%, Russell 2000 6.8%. Cash is still king. Patience is in order. We are sticking to our Seasonal Trading Playbook. If you’re not nimble and able to trade quickly, wait for our Best Six Months Seasonal MACD Buy Signal.

Worse Before It Gets Better
Tue, Sep 20, 2022

For those checking in on our Seasonality Tool in the past week, the current point of the year can either look like one of the worst, middling, or best times of the year depending on the time frame. As shown below, the median one-week performance of the S&P 500 from the close on 9/20 over the last ten years has been a decline of 95 bps loss which ranks in just the fourth percentile of all days of the year. Extending out to look at the S&P 500's median one-month performance, the 105 bps median gain is about smack dab in the middle of the range of historical one-month returns. Moving out to three months, the S&P 500's median gain of 578 bps ranks in the top 5% of all days.



To look at seasonality in another way, the charts below show the average S&P 500 5-day performance (including a smoothed look via a 7-day moving average) and the percentage of time the index has traded positively at each calendar day of the year going all the way back to 1945. The current week of the year has averaged some of the worst one-week returns for the S&P 500 across all years of the post-WWII period while the index has tended to fall more often than not.



Again, contrary to short-term seasonal weakness, taking a similar look but using a 3-month performance window, we are entering one of the best times of the year. As shown below, the second half of September into October sees the average 3-month performance rocket higher and by early October has tended to be the strongest of any point of the year.



The Biggest Pandemic Losers
Mon, Sep 19, 2022

With President Biden declaring that "the pandemic is over" on 60 Minutes last night, we thought we'd take a look at stock market performance since the pandemic began. At its peak on January 3rd, 2022, the S&P 500 was up more than 40% from its closing price on February 19th, 2020 -- the peak reading for the index prior to the COVID Crash. After entering bear market territory in 2022, the S&P is currently only 14% above its pre-COVID high. In the Russell 1,000 -- another large-cap index -- 41% of stocks are now trading below their closing price on February 19th, 2020. 20% of stocks in the index are down more than 20%! Given that two and a half years have passed, we think it's safe to say that any stock down 20% from pre-COVID levels has been a "pandemic loser." At least at this point in time.

Below are stocks with market caps above $15 billion that are down at least 20% from their closing price on 2/19/20. Names like Boeing (BA), Delta (DAL), Uber (UBER), and Las Vegas Sands (LVS) were some of the initial "lockdown losers" that never really recovered, but other stocks that were initially viewed as "lockdown winners" are also on the list like Netflix (NFLX), Meta (META), Spotify (SPOT), and Zoom Video (ZM). Go figure.

Boeing (BA) and Intel (INTC) have been two of the biggest losers since pre-COVID with declines of more than 56%. Other "blue chips" that have been crushed since the pandemic hit include Biogen (BIIB), Citigroup (C), General Electric (GE), Verizon (VZ), 3M (MMM), Square (SQ), Disney (DIS), Adobe (ADBE), and salesforce (CRM). It's interesting that there's representation from nearly every sector of the economy on this list. The only sector that's NOT included is Energy, which is crazy since the sector was one of the hardest hit in the early days of COVID as the price of oil even went negative for a day.

Of course, COVID isn't the reason why all of these large-cap stocks are now down so much since the pandemic began, but the performance numbers are the performance numbers, and there's no getting around it. Management at big travel & leisure companies have always wished COVID never happened, but more and more companies in sectors like Tech that thought the pandemic might be a game-changer for them in a positive way are now staring at big 2+ year declines thinking "what the hell just happened."

 

Here are the current major indices pullback/correction levels from ATHs as of week ending 9.23.22-


Here is also the pullback/correction levels from current prices-


Here are the current major indices rally levels from correction low as of week ending 9.23.22-

 

​

Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for September 23rd, 2022
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 9/25/22
Video from ShadowTrader Peter Reznicek
(VIDEO NOT YET POSTED.)

 

StonkForumers! Come join us on our stock market competitions for this upcoming trading week ahead!-

========================================================================================================

StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (9/26-9/30) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (9/26) <-- click there to cast your daily market direction vote for this coming Monday ahead!

========================================================================================================

It would be pretty sweet to see some of you join us and participate on these!

I hope you all have a fantastic weekend ahead!

 

​

Here are the most anticipated Earnings Releases for this upcoming trading week ahead.

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 9.26.22 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

(NONE.)

Monday 9.26.22 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

(NONE.)

Tuesday 9.27.22 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

Tuesday 9.27.22 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

Wednesday 9.28.22 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

Wednesday 9.28.22 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

Thursday 9.29.22 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

Thursday 9.29.22 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

Friday 9.30.22 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

Friday 9.30.22 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

(NONE.)

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($BBBY $CCL $MU $NKE $RAD $JBL $KMX $SNX $CBRL $BB $PAYX $UNFI $HEPS $DAVA $CTAS $THO $PRGS $AYTU $MTN $CNXC $NEOG $STEM $CALM $CGNT $EPAC $NAPA $JEF $WOR $CMTL $IPW $ISR $MLKN $LILM $FERG $CIR $NBTX)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning September 26th, 2022 <-- click there to view!

 

Top of the morning StonkForumers! Happy Monday to all and welcome to the new trading week and a fresh start. Here is a quick check on those futures as we are a little under 4 hours from the cash market open.

GLTA on this Monday, September the 26th, 2022!

 

Good Monday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great new trading week ahead.

 

With earnings season set to kick off next month, here's a quick sneak peek at the most notables for the next 5 weeks out.
(showing only the "confirmed"release dates)

 

Morning Lineup - 9/26/22 - Still Falling
Mon, Sep 26, 2022

You know it's bad out there when a Fed official 'thinks' that the Fed will do all it can do to avoid 'deep, deep pain'. Early on in the tightening cycle, Fed Chair Powell said that the Fed's path to higher rates could result in a 'softish landing' for the economy. A few weeks later, he noted that the policy could be accompanied by 'some pain'. Last week, the Fed chair told reporters that no one knows if this process will result in a recession. Over the weekend, it wasn't the Fed chair speaking, but Atlanta Fed President Raphael Bostic had the comments above in an interview on 'Face the Nation'. In the span of five months, Fed officials have gone from describing the impact of tighter policy on the US economy as a softish landing to short of 'deep, deep pain'.

If there’s anything positive to say this morning, at least September has only a week left. Heading into the last trading week of the month, the S&P 500 has already shed 6.6% which ranks as one of the worst MTD performances heading into the last week of the month in the post-WWII period. The table below lists each year where the S&P 500 was down over 5% on the month heading into the last week of September along with how the index performed in the final week of the month.

In the 12 prior months where the S&P 500 was down over 5%, the final week of the month experienced a median decline of 0.44% with positive returns just 42% of the time. That’s hardly anything to get excited about, but it is also not much worse than the average performance for the final week of the month in all years since WWII (-0.34%). One thing you can probably count on is volatility. To close out the month. In 7 of the 11 prior years show, the S&P 500 was up or down at least 1% in the final week of the month. The most extreme downside move was 2.2% in 2002 while the most positive upside move was 7.8% in 2001.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Monday, September 26th, 2022.

 

Top of the morning StonkForumers! Happy Tuesday to all and welcome to the new trading day and a fresh start. Here is a quick check on those futures as we are a little under 3 hours from the cash market open.

GLTA on this Tuesday, September the 27th, 2022!

 

Good Tuesday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead.

 

Morning Lineup - 9/27/22 - No Safety In Treasuries
Tue, Sep 27, 2022

Futures are attempting to rebound this morning after yet another decline in the equity market yesterday. It's a busy day for economic data as Durable Goods Orders were just released and came in roughly in line with expectations, but there are still several more indicators on the calendar with FHFA House Prices and Case Shiller at 9 AM Eastern and then Consumer Confidence, Richmond Fed, and New Home Sales all at 10 AM.

Treasuries took another pasting yesterday as yields once again surged to new multi-decade highs. Every day there’s another way to show the carnage, so here’s the one for today. The iShares Long Term Treasury ETF (TLT) fell nearly 2% yesterday taking its YTD decline to more than 30%. 30%. In Treasuries! Weren’t they supposed to be safe and boring? For most of our entire investment careers, when markets hit turmoil, market commentary would include something along the lines of “investors rotated into the safety and security of Treasuries. Even Treasurydirect.com, which is run by the Treasury Department says as much on its website.



2022’s word of the year could very well be turmoil, yet US Treasuries are having a down year for the ages. Even on a y/y basis, since its inception in 2003, TLT’s performance over the last 12 months has been the worst on record. It’s even down more than the Nasdaq!



The weakness in Treasuries is not to say that the performance of US equities has been positive this year. With the exception of the Dow ETF (DIA), every other ETF that tracks a major US index is down more than 20%, and every single one of them closed yesterday at 'extreme' oversold levels (more than two standard deviations below 50-DMA).

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Tuesday, September 27th, 2022.