RE: FAO Rock8 - Technicals11 Feb 2023 12:51
My opinion
I have been reading a lot lately that the market rise since the turn of the year has been short covering in anticipation of the Fed slowing down interest rate rises and cutting rates in the second half of the year. If you look at which stocks have risen the most in recent months it's those that were beaten down in 22. Take the ARK fund. Up a lot recently. These were some of the most shorted stocks of last year. The index that has risen the most year to date is the Nasdaq. Which is the index that lost the most in 22.
The last jobs report has thrown a curve ball. The jobs market is still very strong. Some are suggesting that inflation may not come down as fast as some had been anticipating. The Fed speakers this week are talking about "Higher for longer", in fact some futures contacts are starting to bet on a 6% rate and not 5%.
It's the CPI print in the USA next week. If this comes in flat, with no sign that inflation is dropping quickly, then the market will not take that in a good way. And as we know where the USA leads we follow.
As for THG, I agree with Rock. Short term it doesn't look good. I thought 55 was key and according to the technicals we are around the 100 MA, so 55 give or take. We kept bouncing off that on Friday. So far it held. But it won't hold forever, especially if the CPI print comes in next week not in our favour.
We need something, anything, from the company to get us out of this range we are now stuck in. But, so far, the only RNS that drop are ones telling us how many free shares he is giving away to staff. The mythical whales need to swim in soon or the next catalyst is the golden share going in September.
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