Summary: A look at the Fed meeting minutes didn't do much to alleviate investor worries over inflation and near-term Fed actions. That created a wildly volatile day for equities while the US Dollar strengthened and 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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Wednesday, April 6, 2022
Facts: -2.22%, Volume higher, Closing Range: 26% (w/gap), Body: 47% Red
Good: Recovery from the intraday lows
Bad: Gap down at open, low closing range, high volume on decline
Highs/Lows: Lower high, Lower low
Candle: Gap down, longer lower wick under a 50% red body.
Advance/Decline: 0.29, more than three declining stocks for every advancing stock
Indexes: SPX (-0.97%), DJI (-0.42%), RUT (-1.42%), VIX (+5.09%)
Sector List: Utilities (XLU +1.99%) and Health (XLV +1.52%) at the top. Technology (XLK -2.37%) and Consumer Discretionary (XLY -2.55%) at the bottom.
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Market Overview
A look at the Fed meeting minutes didn't do much to alleviate investor worries over inflation and near-term Fed actions. That created a wildly volatile day for equities while the US Dollar strengthened and Treasury yields rose.
The Nasdaq declined by -2.22%. Volume was higher than the previous day. The index opened with a gap down to start below the 21d EMA, continued lower until getting support at the 50d MA and recovering some of the loss. The candle has a 26% closing range, considering the full range from yesterday's low to include the gap. There were more than three declining stocks for every advancing stock.
The Russell 2000 (RUT) lost -1.42%. The S&P 500 (SPX) fell by -0.97%. The Dow Jones Industrial Average (DJI) declined by -0.42%. The VIX Volatility Index rose another +5.09%.
Five of the eleven S&P 500 sectors gained for the day with Utilities (XLU +1.99%) and Health (XLV +1.52%) performing the best. Growth sectors led markets lower. Technology (XLK -2.37%) and Consumer Discretionary (XLY -2.55%) were at the bottom of the sector list.
Crude Oil Inventories were higher than expected, helping Crude Oil futures to drop.
The US Dollar index (DXY) rose to +0.14%. US 30y and 10y Treasury Yields rose while the 2y yield declined. That continued to widen the gap after the yields inverted briefly last week. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices continue to drop. Brent Oil dropped to $101.
The put/call ratio (PCCE) rose to 0.897. The CNN Fear & Greed index moved back into the Fear range.
The big six mega-cap charts were crushed by the sell-off. Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Nvidia (NVDA) all broke below key moving averages. Only Apple (AAPL) and Tesla (TSLA) remain above the three moving averages I track. Nvidia had the biggest drop, declining by -5.88% while Apple faired the best, declining only -1.85%.
Eli Lilly (LLY) along with the rest of the Health sector did well. LLY topped the mega-cap list with a +4.56% gain. Nvidia and Tesla were at the bottom of the mega-cap list.
All stocks in the Daily Update Growth List declined. Twitter (TWTR) had the smallest decline, falling only -0.41%. The biggest declines were from Beyond Meat (BYND) and Cloudflare (NET), which both fell over 8%.
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Looking ahead
Tomorrow will kick off with the weekly Initial Jobless Claims report. Treasury Secretary Janet Yellen as well as several Fed members are scheduled to speak throughout the day.
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Trends, Support, and Resistance
The Nasdaq opened the day below the 21d EMA and continued lower before getting support at the 50d MA.
The trend line from the 3/29 high, the five-day trend line, and the one-day trend line all point to a +0.30% advance for tomorrow.
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Wrap-up
It seems that the Fed will shed $95 billion a month from the balance sheet and raise interest rates 225 more basis points before the end of the year. That will be three 50 point increases and three 25 point increases. The good news, is now we know. The bad news is that the impact on your favorite equities may not be over yet.
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=-
Wednesday, April 6, 2022
Facts: -2.22%, Volume higher, Closing Range: 26% (w/gap), Body: 47% Red
Good: Recovery from the intraday lows
Bad: Gap down at open, low closing range, high volume on decline
Highs/Lows: Lower high, Lower low
Candle: Gap down, longer lower wick under a 50% red body.
Advance/Decline: 0.29, more than three declining stocks for every advancing stock
Indexes: SPX (-0.97%), DJI (-0.42%), RUT (-1.42%), VIX (+5.09%)
Sector List: Utilities (XLU +1.99%) and Health (XLV +1.52%) at the top. Technology (XLK -2.37%) and Consumer Discretionary (XLY -2.55%) at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
A look at the Fed meeting minutes didn't do much to alleviate investor worries over inflation and near-term Fed actions. That created a wildly volatile day for equities while the US Dollar strengthened and Treasury yields rose.
The Nasdaq declined by -2.22%. Volume was higher than the previous day. The index opened with a gap down to start below the 21d EMA, continued lower until getting support at the 50d MA and recovering some of the loss. The candle has a 26% closing range, considering the full range from yesterday's low to include the gap. There were more than three declining stocks for every advancing stock.
The Russell 2000 (RUT) lost -1.42%. The S&P 500 (SPX) fell by -0.97%. The Dow Jones Industrial Average (DJI) declined by -0.42%. The VIX Volatility Index rose another +5.09%.
Five of the eleven S&P 500 sectors gained for the day with Utilities (XLU +1.99%) and Health (XLV +1.52%) performing the best. Growth sectors led markets lower. Technology (XLK -2.37%) and Consumer Discretionary (XLY -2.55%) were at the bottom of the sector list.
Crude Oil Inventories were higher than expected, helping Crude Oil futures to drop.
The US Dollar index (DXY) rose to +0.14%. US 30y and 10y Treasury Yields rose while the 2y yield declined. That continued to widen the gap after the yields inverted briefly last week. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices continue to drop. Brent Oil dropped to $101.
The put/call ratio (PCCE) rose to 0.897. The CNN Fear & Greed index moved back into the Fear range.
The big six mega-cap charts were crushed by the sell-off. Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Nvidia (NVDA) all broke below key moving averages. Only Apple (AAPL) and Tesla (TSLA) remain above the three moving averages I track. Nvidia had the biggest drop, declining by -5.88% while Apple faired the best, declining only -1.85%.
Eli Lilly (LLY) along with the rest of the Health sector did well. LLY topped the mega-cap list with a +4.56% gain. Nvidia and Tesla were at the bottom of the mega-cap list.
All stocks in the Daily Update Growth List declined. Twitter (TWTR) had the smallest decline, falling only -0.41%. The biggest declines were from Beyond Meat (BYND) and Cloudflare (NET), which both fell over 8%.
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Looking ahead
Tomorrow will kick off with the weekly Initial Jobless Claims report. Treasury Secretary Janet Yellen as well as several Fed members are scheduled to speak throughout the day.
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Trends, Support, and Resistance
The Nasdaq opened the day below the 21d EMA and continued lower before getting support at the 50d MA.
The trend line from the 3/29 high, the five-day trend line, and the one-day trend line all point to a +0.30% advance for tomorrow.
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Wrap-up
It seems that the Fed will shed $95 billion a month from the balance sheet and raise interest rates 225 more basis points before the end of the year. That will be three 50 point increases and three 25 point increases. The good news, is now we know. The bad news is that the impact on your favorite equities may not be over yet.
Stay healthy and trade safe!
