Summary: Small-caps outperformed the rest of the market today as investors repositioned for the holidays. The reposition and options expiration drove larger than average volume. All S&P 500 sectors declined.
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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Friday, December 17, 2021
Facts: -0.07%, Volume higher, Closing Range: 64%, Body: 40% Green
Good: Support at ~15,000, high closing range
Bad: Volume higher on a decline
Highs/Lows: Lower high, Lower low
Candle: Green body, upper wick slightly longer than lower wick
Advance/Decline: 1.23, more advancing stocks than declining stocks
Indexes: SPX (-1.03%), DJI (-1.48%), RUT (+1.00%), VIX (+4.86%)
Sector List: Real Estate (XLRE -0.34%) and Communications (XLC -0.40%) at the top. Energy (XLE -2.04%) and Financials (XLF -2.20%) at the bottom.
Expectation: Sideways or Higher
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Market Overview
Small-caps outperformed the rest of the market today as investors repositioned for the holidays. The reposition and options expiration drove larger than average volume. All S&P 500 sectors declined.
The Nasdaq closed down by -0.07%, unable to hold onto an intraday rally. Volume was well above yesterday's volume and the 50d average volume for the Nasdaq. The 40% green body is below a good closing range of 64%. The upper wick is longer than the lower wick, representing the pullback from the intraday high. Still, there were more advancing stocks than declining stocks for the day.
The Russell 2000 (RUT) was the only index to gain for the day, advancing +1.00%. The S&P 500 (SPX) declined -1.03%, while the Dow Jones Industrial Average (DJI) fell -1.48%. The VIX Volatility Index gained +4.86%.
All S&P 500 sectors declined today. Real Estate (XLRE -0.34%) and Communications (XLC -0.40%) had the smallest losses. Energy (XLE -2.04%) and Financials (XLF -2.20%) had the most significant losses.
The US Dollar Index (DXY) climbed by +0.70%. US 30y and 10y Treasury Yields declined for the day while the 2y Yield rose. High Yield (HYG) Corporate Bond prices dropped. Investment Grade (LQD) Corporate Bond prices advanced. Aluminum and Copper futures rose sharply over the last two days.
The put/call ratio (PCCE) rose to 0.782. The CNN Fear & Greed index moved back toward Extreme Fear but is still in the Fear range. The NAAIM money manager exposure index dropped to 52.55.
Amazon (AMZN) was the only one to advance of the four largest mega-caps, gaining +0.68%. Microsoft dipped -0.34%, closing below its 50d moving average. Google (GOOGL) also closed below its 50d moving average, dropping -1.88% today. Apple (AAPL) declined -0.65%, the only of the four to remain above its 21d EMA and 50d MA.
Broadcom (AVGO) was the top mega-cap for the day, gaining +2.30%. Novo Nordisk (NVO) declined -8.23% to end up at the bottom of the list. Oracle (ORCL) also had a significant decline, falling -6.39% today after rumors the company would acquire Cerner (CERN). Cerner rose almost 13% on the news.
Zoom (ZM) rose to the top of the Daily Update Growth List, gaining +9.51% on news that Apple and Alphabet are delaying their return to office plans because of the Omicron variant. The growth list had more gainers than losers. At the bottom of the list was Niu (NIU), which declined -3.82%.
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Looking ahead
Nike (NKE) will release earnings on Monday, one of the few large-cap reports next week.
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Trends, Support, and Resistance
The Nasdaq opened with a gap down but rose through the day to close the gap, closing just below the 15,200 support/resistance area.
If the index can follow its one-day trend line, that would mean a +1.32% gain for Monday.
The trend line from the 11/22 high leads to a +0.15% gain.
The five-day trend line would result in a -0.42% decline to start the week.
Next week is a four-day week, with the markets closing on Friday for the Christmas holiday.
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Wrap-up
It's a bit odd to see the advance/decline ratio above 1.0 on a day when all sectors declined. It's just more evidence that small caps ruled the day as investors moved from big tech in the continuing reaction to planned interest rate hikes in 2022. Will the small-cap trend continue? It might. The end of the year into January of the following year tends to be good for the small-cap segment.
I like the intraday move higher on very high volume for the Nasdaq even though the index closed lower. The expectation for Monday is Sideways or Higher.
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.
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Friday, December 17, 2021
Facts: -0.07%, Volume higher, Closing Range: 64%, Body: 40% Green
Good: Support at ~15,000, high closing range
Bad: Volume higher on a decline
Highs/Lows: Lower high, Lower low
Candle: Green body, upper wick slightly longer than lower wick
Advance/Decline: 1.23, more advancing stocks than declining stocks
Indexes: SPX (-1.03%), DJI (-1.48%), RUT (+1.00%), VIX (+4.86%)
Sector List: Real Estate (XLRE -0.34%) and Communications (XLC -0.40%) at the top. Energy (XLE -2.04%) and Financials (XLF -2.20%) at the bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Small-caps outperformed the rest of the market today as investors repositioned for the holidays. The reposition and options expiration drove larger than average volume. All S&P 500 sectors declined.
The Nasdaq closed down by -0.07%, unable to hold onto an intraday rally. Volume was well above yesterday's volume and the 50d average volume for the Nasdaq. The 40% green body is below a good closing range of 64%. The upper wick is longer than the lower wick, representing the pullback from the intraday high. Still, there were more advancing stocks than declining stocks for the day.
The Russell 2000 (RUT) was the only index to gain for the day, advancing +1.00%. The S&P 500 (SPX) declined -1.03%, while the Dow Jones Industrial Average (DJI) fell -1.48%. The VIX Volatility Index gained +4.86%.
All S&P 500 sectors declined today. Real Estate (XLRE -0.34%) and Communications (XLC -0.40%) had the smallest losses. Energy (XLE -2.04%) and Financials (XLF -2.20%) had the most significant losses.
The US Dollar Index (DXY) climbed by +0.70%. US 30y and 10y Treasury Yields declined for the day while the 2y Yield rose. High Yield (HYG) Corporate Bond prices dropped. Investment Grade (LQD) Corporate Bond prices advanced. Aluminum and Copper futures rose sharply over the last two days.
The put/call ratio (PCCE) rose to 0.782. The CNN Fear & Greed index moved back toward Extreme Fear but is still in the Fear range. The NAAIM money manager exposure index dropped to 52.55.
Amazon (AMZN) was the only one to advance of the four largest mega-caps, gaining +0.68%. Microsoft dipped -0.34%, closing below its 50d moving average. Google (GOOGL) also closed below its 50d moving average, dropping -1.88% today. Apple (AAPL) declined -0.65%, the only of the four to remain above its 21d EMA and 50d MA.
Broadcom (AVGO) was the top mega-cap for the day, gaining +2.30%. Novo Nordisk (NVO) declined -8.23% to end up at the bottom of the list. Oracle (ORCL) also had a significant decline, falling -6.39% today after rumors the company would acquire Cerner (CERN). Cerner rose almost 13% on the news.
Zoom (ZM) rose to the top of the Daily Update Growth List, gaining +9.51% on news that Apple and Alphabet are delaying their return to office plans because of the Omicron variant. The growth list had more gainers than losers. At the bottom of the list was Niu (NIU), which declined -3.82%.
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Looking ahead
Nike (NKE) will release earnings on Monday, one of the few large-cap reports next week.
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Trends, Support, and Resistance
The Nasdaq opened with a gap down but rose through the day to close the gap, closing just below the 15,200 support/resistance area.
If the index can follow its one-day trend line, that would mean a +1.32% gain for Monday.
The trend line from the 11/22 high leads to a +0.15% gain.
The five-day trend line would result in a -0.42% decline to start the week.
Next week is a four-day week, with the markets closing on Friday for the Christmas holiday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It's a bit odd to see the advance/decline ratio above 1.0 on a day when all sectors declined. It's just more evidence that small caps ruled the day as investors moved from big tech in the continuing reaction to planned interest rate hikes in 2022. Will the small-cap trend continue? It might. The end of the year into January of the following year tends to be good for the small-cap segment.
I like the intraday move higher on very high volume for the Nasdaq even though the index closed lower. The expectation for Monday is Sideways or Higher.
Stay healthy and trade safe!
