Summary: Investors continued to move out of equities as the war continues in Ukraine and the Fed heads toward its first rate hike since the start of the pandemic.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Monday, March 14, 2022
Facts: -2.04%, Volume higher, Closing Range: 7%, Body: 59% Red
Good: Nothing
Bad: Long upper wick from failed rally, closing range
Highs/Lows: Lower high, Lower low
Candle: Long upper wick over a thick red body
Advance/Decline: 0.36, nearly three declining stocks for every advancing stock
Indexes: SPX (-0.74%), DJI (+0.00%), RUT (-1.92%), VIX (+3.32%)
Sector List: Financials (XLF +1.26%) and Health (XLV +0.71%) at the top. Technology (XLK -1.85%) and Energy (XLE -2.99%) at the bottom.
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Market Overview
Investors continued to move out of equities as the war continues in Ukraine and the Fed heads toward its first rate hike since the start of the pandemic.
The Nasdaq declined by -2.04%. A rally in the morning failed to hold, creating a long upper wick above a thick red body covering 59% of the candle. The closing range was dismal at 7%, leaving behind a tiny lower wick. Volume was higher than the previous day.
Only the Dow Jones Industrial Average (DJI) avoided a loss for the day, but only climbed a fraction, ending the day even at +0.00%. The S&P 500 (SPX) declined by -0.74%. The Russell 2000 (RUT) dropped -1.92%. The VIX Volatility Index rose by +3.32%.
Four of the eleven S&P 500 sectors gained. Financials (XLF +1.26%) and Health (XLV +0.71%) were at the top of the sector list. Technology (XLK -1.85%) and Energy (XLE -2.99%) at the bottom. The Energy sector is pulling back from recent gains as the price of oil drops.
Brent Oil dropped to $103.55 per barrel. The US Dollar index (DXY) stayed about even, declining by just -0.04%. US Treasury Yields all rose sharply. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices dropped. Silver and Gold both declined.
The put/call ratio (PCCE) rose to 0.929. The CNN Fear & Greed index is in Extreme Fear but edged toward Neutral.
All of the big six declined. Tesla (TSLA) again was the worst of the six, declining -3.64%. Microsoft (MSFT) had the smallest decline but still dropped by -1.30%.
Pfizer (PFE) topped the mega-cap list for a second day, advancing +3.94% today. Likewise, Alibaba (BABA) was at the bottom of the list again, declining by -10.32%.
Only three of the Daily Update Growth List stocks advanced. PayPal (PYPL) topped the list with a +0.31% gain. Six stocks in the list declined more than 10%, with five of those stocks being Chinese companies. Ehang Holding (EH) was at the bottom of the list, declining by -16.45%.
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Looking ahead
The February Producer Price Index (PPI) data will arrive in the morning. The data provides a forward-looking view on inflation pressures. The NY Empire State Manufacturing Index will also be available. API Weekly Crude Oil Stock will be published in the afternoon after the market closes.
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Trends, Support, and Resistance
The Nasdaq moved toward its 40-month exponential moving average which provided a bottom for corrections in the past. The only corrections to break through that line are 2000, 2008, and 2020.
If the index returns to the trend line from the 2/10 high and the five-day trend line, that would mean a +1.64% gain for Tuesday.
The one-day trend line leads to a -3.29% decline.
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Wrap-up
I saw some headlines today that said investors were moving into safe-haven assets but today we see the US dollar is steady, there are higher Treasury yields (selling bonds) and lower Silver and Gold prices. Cryptocurrencies aren't moving all that much. There certainly wasn't much interest in risk assets either.
The Fed meeting comes on Wednesday. Unless some huge surprise rate increase comes, I'd expect the market to move opposite of what it's doing now. Investors tend to overprotect heading into these events.
Stay healthy and trade safe!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, March 14, 2022
Facts: -2.04%, Volume higher, Closing Range: 7%, Body: 59% Red
Good: Nothing
Bad: Long upper wick from failed rally, closing range
Highs/Lows: Lower high, Lower low
Candle: Long upper wick over a thick red body
Advance/Decline: 0.36, nearly three declining stocks for every advancing stock
Indexes: SPX (-0.74%), DJI (+0.00%), RUT (-1.92%), VIX (+3.32%)
Sector List: Financials (XLF +1.26%) and Health (XLV +0.71%) at the top. Technology (XLK -1.85%) and Energy (XLE -2.99%) at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors continued to move out of equities as the war continues in Ukraine and the Fed heads toward its first rate hike since the start of the pandemic.
The Nasdaq declined by -2.04%. A rally in the morning failed to hold, creating a long upper wick above a thick red body covering 59% of the candle. The closing range was dismal at 7%, leaving behind a tiny lower wick. Volume was higher than the previous day.
Only the Dow Jones Industrial Average (DJI) avoided a loss for the day, but only climbed a fraction, ending the day even at +0.00%. The S&P 500 (SPX) declined by -0.74%. The Russell 2000 (RUT) dropped -1.92%. The VIX Volatility Index rose by +3.32%.
Four of the eleven S&P 500 sectors gained. Financials (XLF +1.26%) and Health (XLV +0.71%) were at the top of the sector list. Technology (XLK -1.85%) and Energy (XLE -2.99%) at the bottom. The Energy sector is pulling back from recent gains as the price of oil drops.
Brent Oil dropped to $103.55 per barrel. The US Dollar index (DXY) stayed about even, declining by just -0.04%. US Treasury Yields all rose sharply. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices dropped. Silver and Gold both declined.
The put/call ratio (PCCE) rose to 0.929. The CNN Fear & Greed index is in Extreme Fear but edged toward Neutral.
All of the big six declined. Tesla (TSLA) again was the worst of the six, declining -3.64%. Microsoft (MSFT) had the smallest decline but still dropped by -1.30%.
Pfizer (PFE) topped the mega-cap list for a second day, advancing +3.94% today. Likewise, Alibaba (BABA) was at the bottom of the list again, declining by -10.32%.
Only three of the Daily Update Growth List stocks advanced. PayPal (PYPL) topped the list with a +0.31% gain. Six stocks in the list declined more than 10%, with five of those stocks being Chinese companies. Ehang Holding (EH) was at the bottom of the list, declining by -16.45%.
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Looking ahead
The February Producer Price Index (PPI) data will arrive in the morning. The data provides a forward-looking view on inflation pressures. The NY Empire State Manufacturing Index will also be available. API Weekly Crude Oil Stock will be published in the afternoon after the market closes.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq moved toward its 40-month exponential moving average which provided a bottom for corrections in the past. The only corrections to break through that line are 2000, 2008, and 2020.
If the index returns to the trend line from the 2/10 high and the five-day trend line, that would mean a +1.64% gain for Tuesday.
The one-day trend line leads to a -3.29% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
I saw some headlines today that said investors were moving into safe-haven assets but today we see the US dollar is steady, there are higher Treasury yields (selling bonds) and lower Silver and Gold prices. Cryptocurrencies aren't moving all that much. There certainly wasn't much interest in risk assets either.
The Fed meeting comes on Wednesday. Unless some huge surprise rate increase comes, I'd expect the market to move opposite of what it's doing now. Investors tend to overprotect heading into these events.
Stay healthy and trade safe!
