It was another volatile session, with the markets dropping sharply at the open and recovering throughout most of the day. While the S&P 500 still finished the day lower, as did the Invesco QQQ Trust (NASDAQ:QQQ)s, not much was happening. Just a lot of sideways trading action.
Something will have to break at some point, given Wednesday's FOMC meeting. Again, I am not looking for the Fed to walk back its hawkish stance. Indeed the charts seemed to confirm that something shall break too, with what appeared to be a giant bear pennant pattern forming. If that is the case, the pattern should break on Wednesday and then start moving to take out Monday’s lows.
5-Yr TIPS
We can also see that the 5-Yr TIP rate, after starting the day yesterday lower and then seeing its yield reverse and move higher. The 5Yr Tip yield filled the gap from its sharp move higher on Jan. 19, and now it looks just about ready to start moving higher again. It looks like a bull flag pattern, although I will admit I didn’t draw it all that well.
NASDAQ Invesco QQQ Trust
It looks like the Qs wrapped wave four up and was starting wave five down. This wave-down should help drive the Qs below the recent lows and probably below $330.
Microsoft
Microsoft (NASDAQ:MSFT) reported better than expected results on the top and bottom, but Azure growth came in at 46%. The street likes to see around 50%, which didn’t happen this quarter.
Now investors could start worrying about slowing data center growth. The conference call and guidance will be essential to what happens. The $282 level was a significant level of support that will need to hold, but if that breaks, it could drop to around $262.
Amazon
Amazon.com (NASDAQ:AMZN) could suffer Wednesday, based on the 46% Azure growth rate. The stock has been stuck below resistance at $2900. There was some mild support around $2,650, but really the next big level of support doesn’t come until $2,450.
Zoom Video
Zoom Video (NASDAQ:ZM) was breaking down, falling below around $150. It looked like the next significant level of support does not come until $107.50.
It looks like Meta Platforms (NASDAQ:FB) was breaking down, having fallen below $309 and closing Tuesday around $300. If the stock can’t recover that price quickly, it will likely decline to around $273.
