March triple witching and the Fed decision ensure high volatility and sudden reversals this week, telling traders to buckle up and take defensive measures. Fedex Corp. (FDX) heads a light earnings calendar, with Thursday’s release looking for a profit of $4.65 per share on $23.32 billion in earnings. The shipping giant failed a breakout in August, entering a steep decline that stretched to a 36% haircut last week. Worries about crashing volumes don’t appear far-fetched, given soaring commodities and the collapse of international markets.
Stocks
Dow component Apple Inc. (AAPL) has held up better than rivals in recent weeks, with long-time bulls unwilling to part with their precious shares. However, one immutable characteristic of bear markets could generate lots of pain down the road, regardless of the love affair with all things iOS. Specially, market generals are the last to fall in the first stages of bear markets, often causing enormous psychological damage that increases broad-based selling pressure.
Tesla Inc. (TSLA) failed a breakout above the 2021 high at 900.40 in February 2022, dropping to a 6-month low at 700. It bounced into March, stalling at new resistance and the 200-day moving average. Friday’s selloff could signal the end of that recovery effort, ahead of a dangerous test at the February low. That trading floor also marks the .786 Fibonacci retracement of the May into November uptrend, marking the last line of defense for battered bulls.
Crypto
Dogecoin (DOGE) soared in April 2021, lifting from $0.17949 to $0.6999 in just three weeks. The bubble then burst, relinquishing 100% of the rally wave into late June. Sadly for bulls, the crypto broke 7-month support in December, yielding mixed action into January, followed by a steady drip decline that’s now reached within a few clicks of February’s all-time low. Worse yet, volatility has evaporated from this market, allowing gravity to maintain control despite deeply oversold technical readings.
ETFs
iShares MSCI Emerging Markets Index Fund ETF (EEM) rallied above 12-year resistance at 50 in January 2021 and mounted the historic 2007 peak at 55.83 one month later. The fund then turned tail, failing both breakouts in a persistent decline that accelerated when Russia invaded Ukraine. This historic failure could signal long-lasting bear markets in Russia, China, and India, with plenty of potential downside into the 2020 low near 30.00.
Catch up on the latest price action with our new ETF performance breakdown.
Disclosure: the author held no positions in aforementioned securities at the time of publication.
