The market had an uneventful day yesterday, with the S&P 500 trading up 13 bps.
We have traded between 3,885 and 4000 since July 20, and we may have to wait until Wednesday for the market to decide what it wants to do.
There does appear to be a head and shoulder pattern on the Intraday chart, with the potential for a gap fill down at 3,830, but that will depend on how the market is feeling today and Wednesday. Walmart (NYSE:WMT) cut its profit outlook after the close, citing strong sales due to higher prices, but that food inflation is in the double digits and higher than in the first quarter. Walmart and many of the retailers are trading lower following the news.
Walmart had recovered much of its losses following results last quarter. But now with the stock trading back down to around $120 in the after hours, investors need to again be on watch for support at $117. That was the critical level last time and will be again this time. Below $117, the stock would have to fall back to around $103 to find support.
Target
Target (NYSE:TGT) traded down more than 6% to $148. Like Walmart, the stock has recovered nicely over the past few weeks, and at least $148 still has a distance to go before returning to its prior lows after filling the gap at $137.
Amazon
Amazon (NASDAQ:AMZN) fell around 4%. The stock has a few gaps that need to fill around $113 and then again at $110. Additionally, the RSI is in a significant downtrend, with a series of lower highs, indicating the shares are likely to continue to trend lower.
VIX
Finally, our good friend, the VIX, managed to creep higher to close at 23.35 yesterday. Not much to add here, but the level of complacency in the market still seems somewhat bizarre. Maybe the Walmart news changes that today; perhaps it doesn’t. If the VIX closes above its 10-day exponential moving average today, that would be interesting.
Have a good one.