Next Day Prep: Tech Sector Holds Amidst Widespread Retreat
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep – What We Are Watching Tomorrow. December started with a risk-off tone in the market, leading to a broad-based retreat across major indices.
Overnight Headlines
- S&P 500 finished down by half a percent, while the Dow dropped almost a full percent due to weakness in cryptocurrencies and rising Treasury yields.
- Sectors like Utilities, Health Care, and Industrials experienced significant declines, with Aerospace and Defense names hit by speculation around the Russia-Ukraine conflict.
- Technology sector held up, driven by mega-cap names like Apple and NVIDIA following a partnership with Synopsys.
Economic Announcements
Market saw indecision amid weak ISM manufacturing data indicating stagflation, with major indices consolidating within tight ranges waiting for a catalyst.
Earnings Highlights
- Energy sector gained, supported by rising crude oil prices. Notable strength in Mortgage & consumer finance names like RKT and UWMC.
- Mega-cap leaders like Apple showed relative strength, while software and biotech stocks like APP and VSTS closed strong signaling potential breakouts.
Top Movers
- Stocks showing accumulation into the close and defying the sell-off are worth watching for potential breakouts.
- Names like ADMA in biotech and upgrades for Chevron, Take-Two, and Unity are notable.
Quick Trade Ideas
Focus on the mortgage sector and mega-cap leaders for potential continuation setups. Watch for early pullbacks or consolidations in strong closing momentum stocks for breakout opportunities.
Key Takeaway
Be tactical in trading tomorrow, focusing on relative strength in mortgage plays, mega-cap leaders, and niche tech stocks. Monitor key index levels with caution regarding the choppy market environment.