Transcript:
Tom Vaughan:
Hello, everybody, welcome to Wednesday, the S&P 500 was up point 6%. Today, interesting day in that the NASDAQ and the Small Cap stocks actually did the best. And the reason this is interesting is because what we saw Friday and Monday was the stocks that had the highest short interest do the best. So you had this kind of short squeeze, they had to buy back the stock. And that started this kind of rally going. I mentioned yesterday that that’s sometime how these rallies really get going. You can even have a full turnaround that starts with that. The next level that usually comes in is kind of the individual investor. And you do see a lot of NASDAQ and Small Cap stocks purchased, you know, in that group as a whole. And so maybe that’s what we’re seeing today. And you know, maybe they’ll fall through tomorrow, there’s still some room between where we are now. And the next level of kind of resistance, I wouldn’t be surprised to see it continue up for a while, even for Thursday and Friday for that matter. And then basically, the big move has to come from the institutions, that’s where we’ve had the problems in the past, you know, we get these first couple of moves up, and then it kind of peters out, institutions don’t follow through. I mean, actually, the institutions are the ones that are doing the short selling. So as a group, they’re thinking the market is gonna go down. And that’s by survey by short interest, however you want to look at that. So being able to convert that mindset to say, hey, you know, it’s time to start buying, you’re gonna have to be a lot of fear of missing out and different things that happen.
And we just haven’t had enough power from short covering and institutions and individuals to push the market all the way up into a different direction. So we’ve had several of these kind of rallies fail because of that, you know, and again, I think it’ll take some other information to get institutions to start to contribute, one of which could come tomorrow, the leading economic indicator reports tomorrow. So that’ll be interesting to see it has been down for three months in a row. Is it up? Is it down? You know, we’ll see what happens as far as that goes. And of course, one of the other big thing that’s happening in Europe is that Nord one pipeline is supposed to come back online tomorrow, this delivers natural gas to Europe. The rumors are that it will start up. But they’re planning on pushing back less gas, they’ve already cut down a fair amount, which is causing problems. They’re talking about cutting it back even more, a lot more articles now about Russia weaponizing their energy. So we’ll see how that happens. Another report that came out today talking about Saudi Arabia might be at its maximum capacity right now, which is actually lower than expected. And obviously, they can up that, but it takes some time. And that makes it more difficult for Saudi Arabia to step in, and fill a gap that Russia could create by cutting back for example, on oil. So we’ll see how this plays out. But very interesting timeframe. Good day today all together. You know, it’s nice to see the market going upward instead of down at this point. So look forward to seeing what’s gonna happen tomorrow. Thank you very much.