Summary: The Fed's Jerome Powell has spoken and a 50 basis point interest rate hike is practically certain. The day started out well but then equities slid as Treasury yields rose.
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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Thursday, April 21, 2022
Facts: -2.07%, Volume lower, Closing Range: 6%, Body: 79% Red
Good: Higher high
Bad: High volume distribution, long red body, advance/decline and low close range
Highs/Lows: Higher high, Lower low
Candle: Large red body under a longer upper wick, outside day
Advance/Decline: 0.2, five declining stocks for every advancing stock
Indexes: SPX (-1.48%), DJI (-1.05%), RUT (-2.29%), VIX (+11.61%)
Sector List: Consumer Staples (XLP -0.09%) and Real Estate (XLRE -0.65%) at the top. Communications (XLC -2.85%) and Energy (XLE -3.17%) at the bottom.
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Market Overview
The Fed's Jerome Powell has spoken and a 50 basis point interest rate hike is practically certain. The day started out well but then equities slid as Treasury yields rose.
The Nasdaq closed down by -2.07%. The intraday decline from the morning high was -3.91%. Ouch. A long upper wick sits above a 79% Red body that ends with a 6% closing range. Volume was higher than the previous day as five stocks declined for every advancing stock.
Small caps had the worst decline, with the Russell 2000 (RUT) dropping by -2.29%. The S&P 500 (SPX) fell by -1.48% while the Dow Jones Industrial Average (DJI) declined by -1.05%. The VIX Volatility Index rose by +11.62%.
All eleven S&P 500 sectors declined. Consumer Staples (XLP -0.09%) and Real Estate (XLRE -0.65%) ended the day at the top of the list while Communications (XLC -2.85%) and Energy (XLE -3.17%) had the most severe losses.
The weekly Initial Jobless Claims came in at 184,000, slightly higher than the forecasted 180,000. The Philadelphia Fed Manufacturing Index read 17.6 compared to a forecast of 21.0. The more impactful news was likely Jerome Powell's confirmation that a 50 basis point hike was on the table for May.
The US Dollar Index rose +0.28%. US 30y, 10y, and 2y Treasury Yields rose with the gap narrowing between long-term and short-term yields. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices declined.
The put/call ratio (PCCE) rose to 0.972, its highest closing ratio since February. The CNN Fear & Greed index moved back toward Fear. The NAAIM Money Manager Exposure index rose to 74.05 after dropping to 63.29 last week.
The only of the big six to gain today was Tesla (TSLA) which please investors with earnings yesterday and advanced by +3.23%. Meta (FB) had the furthest fall, declining by -6.16%. Amazon (AMZN) declined by -3.70%.
Only a handful of mega-caps gained today. Tesla was at the top of the list, followed by AbbVie (ABBV) which gained +1.16%. Facebook was at the bottom. The next worst was Nvidia (NVDA) which dropped by -6.05% today.
The only stock in the Daily Update Growth List to gain was Twitter (TWTR) which ended the day with a +0.77% advance. SolarEdge (SEDG) and Enphase (ENPH) were at the bottom of the list with -9.75% and -12.31% declines.
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Looking ahead
Manufacturing and Services PMI numbers for April will be published in the morning.
Verizon (VZ), American Express (AXP), and SAP (SAP) top the list of big companies reporting earnings tomorrow morning.
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Trends, Support, and Resistance
The Nasdaq fell sharply after starting the morning with gains that took it just above the 21d EMA and 50d MA. It then sold off the rest of the day to create a new weekly low.
Returning to the five-day trend line would mean a +1.99% for Friday.
If the one-day trend were to continue into tomorrow, that would mean a -4.37% decline.
The trend line from the 3/29 high points to a -0.59% decline.
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Wrap-up
If you're tired of Fed officials speaking publicly and markets reacting severely, I have good news for you. They now enter a two-week quiet period until the Fed meeting in the first week of May.
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=-
Thursday, April 21, 2022
Facts: -2.07%, Volume lower, Closing Range: 6%, Body: 79% Red
Good: Higher high
Bad: High volume distribution, long red body, advance/decline and low close range
Highs/Lows: Higher high, Lower low
Candle: Large red body under a longer upper wick, outside day
Advance/Decline: 0.2, five declining stocks for every advancing stock
Indexes: SPX (-1.48%), DJI (-1.05%), RUT (-2.29%), VIX (+11.61%)
Sector List: Consumer Staples (XLP -0.09%) and Real Estate (XLRE -0.65%) at the top. Communications (XLC -2.85%) and Energy (XLE -3.17%) at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Fed's Jerome Powell has spoken and a 50 basis point interest rate hike is practically certain. The day started out well but then equities slid as Treasury yields rose.
The Nasdaq closed down by -2.07%. The intraday decline from the morning high was -3.91%. Ouch. A long upper wick sits above a 79% Red body that ends with a 6% closing range. Volume was higher than the previous day as five stocks declined for every advancing stock.
Small caps had the worst decline, with the Russell 2000 (RUT) dropping by -2.29%. The S&P 500 (SPX) fell by -1.48% while the Dow Jones Industrial Average (DJI) declined by -1.05%. The VIX Volatility Index rose by +11.62%.
All eleven S&P 500 sectors declined. Consumer Staples (XLP -0.09%) and Real Estate (XLRE -0.65%) ended the day at the top of the list while Communications (XLC -2.85%) and Energy (XLE -3.17%) had the most severe losses.
The weekly Initial Jobless Claims came in at 184,000, slightly higher than the forecasted 180,000. The Philadelphia Fed Manufacturing Index read 17.6 compared to a forecast of 21.0. The more impactful news was likely Jerome Powell's confirmation that a 50 basis point hike was on the table for May.
The US Dollar Index rose +0.28%. US 30y, 10y, and 2y Treasury Yields rose with the gap narrowing between long-term and short-term yields. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices declined.
The put/call ratio (PCCE) rose to 0.972, its highest closing ratio since February. The CNN Fear & Greed index moved back toward Fear. The NAAIM Money Manager Exposure index rose to 74.05 after dropping to 63.29 last week.
The only of the big six to gain today was Tesla (TSLA) which please investors with earnings yesterday and advanced by +3.23%. Meta (FB) had the furthest fall, declining by -6.16%. Amazon (AMZN) declined by -3.70%.
Only a handful of mega-caps gained today. Tesla was at the top of the list, followed by AbbVie (ABBV) which gained +1.16%. Facebook was at the bottom. The next worst was Nvidia (NVDA) which dropped by -6.05% today.
The only stock in the Daily Update Growth List to gain was Twitter (TWTR) which ended the day with a +0.77% advance. SolarEdge (SEDG) and Enphase (ENPH) were at the bottom of the list with -9.75% and -12.31% declines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Manufacturing and Services PMI numbers for April will be published in the morning.
Verizon (VZ), American Express (AXP), and SAP (SAP) top the list of big companies reporting earnings tomorrow morning.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq fell sharply after starting the morning with gains that took it just above the 21d EMA and 50d MA. It then sold off the rest of the day to create a new weekly low.
Returning to the five-day trend line would mean a +1.99% for Friday.
If the one-day trend were to continue into tomorrow, that would mean a -4.37% decline.
The trend line from the 3/29 high points to a -0.59% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
If you're tired of Fed officials speaking publicly and markets reacting severely, I have good news for you. They now enter a two-week quiet period until the Fed meeting in the first week of May.
Stay healthy and trade safe!
