Summary: Consumer Price Index data was about what analysts expected, avoiding any big surprises in the morning. Now investors await the Fed meeting next week to determine how officials will respond to soaring inflation.
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=- Friday, December 10, 2021
Facts: +0.73%, Volume lower, Closing Range: 76%, Body: 1% Green Good: Higher close, above 21d EMA Bad: Lower high, lower low Highs/Lows: Lower high, Lower low Candle: Thin body in upper part of candle, long lower wick Advance/Decline: 0.47, two declining stocks for every advancing stock Indexes: SPX (+0.95%), DJI (+0.60%), RUT (-0.38%), VIX (-13.39%) Sector List: Technology (XLK +2.01%) and Consumer Staples (XLP +1.69%) at the top. Financials (XLF +0.10%) and Communications (XLC +0.05%) at the bottom. Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview
Consumer Price Index data was about what analysts expected, avoiding any big surprises in the morning. Now investors await the Fed meeting next week to determine how officials will respond to soaring inflation.
The Nasdaq closed with a +0.73% gain. Volume was lower than the previous day. The candle has a green body covering only 1% of the range, while a long lower wick extended beyond yesterday's low. The lower low is joined by a lower high, continuing a three-day downtrend. The closing range was good at 76% but there were two declining stocks for every advancing stock.
The S&P 500 (SPX) rose +0.95% to achieve a record closing price. The Dow Jones Industrial Average (DJI) climbed by +0.60%. Small caps didn't do well, with the Russell 2000 (RUT) declining -0.38%. The VIX Volatility index came down -13.39%.
All eleven S&P 500 sectors gained. Technology (XLK +2.01%) and Consumer Staples (XLP +1.69%) were the top sectors. Technology was helped to the top by investors glad to not see surprises in the Consumer Price Index data. Consumer Staples was boosted by the continued high inflation represented by the data. Financials (XLF +0.10%) and Communications (XLC +0.05%) were at the bottom of the sector list.
The Consumer Price Index data came in as expected, with Core CPI at 0.5% month-over-month and 4.9% year-over-year. Total CPI (which includes food and energy) was slightly higher at 0.8% month-over-month instead of the expected 0.7%.
Michigan Consumer Expectations for December registered at 67.8 against the expectation of 62.0. Consumer Sentiment was at 70.4, better than the expected 67.1.
The US Dollar index (DXY) declined -0.67%. The 30y Treasury yield ended the day higher while the 10y and 2y yields dropped. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices rose.
The put/call ratio (PCCE) rose to 0.760. The CNN Fear & Greed index moved toward neutral but remained in the Fear range. The NAAIM Money Manager Exposure Index is 69.46 after being above 100 for five weeks.
Of the four largest mega-caps, only Amazon (AMZN) declined for the day, losing -1.12% but recovering from a dip below the 50d moving average line to close above the line. Apple (AAPL) soared to another record close, gaining +2.80% for the day. Microsoft (MSFT) had a similar gain, advancing +2.83%. Alphabet (GOOGL) gained +0.25%.
After beating earnings expectations, Oracle (ORCL) topped the mega-cap list with a +15.61% gain. PayPal (PYPL) was at the bottom of the list with a -1.69% decline.
Whereas the mega-cap list had more gainers than losers, most of the Daily Update Growth List were losers. SnowFlake (SNOW) topped the list with a +2.75% gain. The biggest loser was RobinHood (HOOD) which declined -8.12%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead
The OPEC Monthly Report is planned for Monday morning.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support, and Resistance
The Nasdaq closed above the 21d EMA after dipping to a lower low for the day.
If the index returns to the five-day trend line for Monday, that would mean a +1.17% gain.
The one-day trend line leads to a -0.10% decline.
If the index goes the other way and returns to the trend line from the 11/22 high, expected a -1.49% decline on Monday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up
Although the Consumer Price Index data came in near expectations, it still shows inflation at its highest point since the 1980s. All eyes are now on the Fed to see what monetary policy changes they make in next week's meeting. Analysts expect faster bond purchase tapering completed by March and quicker interest rate hikes in 2022.