Summary: Investors sold both equities and bonds ahead of CPI data coming this week that's expected to show record-high inflation and more motivation for the Fed to act aggressively.
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, April 11, 2022
Facts: -2.18%, Volume higher, Closing Range: 4% (w/gap), Body: 74% Red
Good: Nothing
Bad: Gap-down, closing range, advance/decline ratio
Highs/Lows: Lower high, Lower low
Candle: Gap-down at open, small upper wick, no lower wick
Advance/Decline: 0.35, almost three declining for every advancing stock
Indexes: SPX (-1.69%), DJI (-1.19%), RUT (-0.71%), VIX (+15.17%)
Sector List: Industrials (XLI -0.32%) and Consumer Staples (XLP -0.41%) at the top. Technology (XLK -2.52%) and Energy (XLE -3.01%) at the bottom.
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Market Overview
Investors sold both equities and bonds ahead of CPI data coming this week that's expected to show record-high inflation and more motivation for the Fed to act aggressively.
The Nasdaq declined -2.18% by the end of the day, opening with a gap-down. The closing range of 4% and higher volume than the previous day shows a clear distribution day. The candle is 74% red with a small upper wick and a barely visible lower wick. There were almost three declining stocks for every advancing stock.
Small-caps held up the best with the Russell 2000 (RUT) only declining by -0.71%. The S&P 500 (SPX) dropped by -1.69% while the Dow Jones Industrial Average (DJI) fell by -1.19%. The VIX Volatility Index rose by +15.17%.
All eleven S&P 500 sectors dipped today. Industrials (XLI -0.32%) and Consumer Staples (XLP -0.41%) were at the top of the list while Technology (XLK -2.52%) and Energy (XLE -3.01%) had the biggest losses.
The US dollar index (DXY) advanced by +0.14%. US 30y and 10y Treasury Yields advanced, hitting their highest point since early 2019. The 2y Treasury Yield declined. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices declined sharply. Silver and Gold gained. Brent Oil dropped below $100 / barrel.
The put/call ratio (PCCE) climbed to 0.863. The CNN Fear & Greed index fell back into the Fear zone.
All big six mega-caps declined with Nvidia (NVDA) leading the way, dropping by -5.20%. Tesla (TSLA) was the last of the six to stay above key moving averages but dropped below its 21d EMA today. Facebook's market cap rose above Nvidia last week, so it may be time to update the big six list again.
Only four stocks in the mega-cap list gained today. Novartis (NVS) had the top gain, advancing +1.10%. Microsoft, Tesla, and Nvidia were at the bottom of the list.
Despite the market losses, there were quite a few gainers in the Daily Update Growth List. Draft Kings (DKNG) had the biggest gain, advancing +2.99% today. Enphase Energy (ENPH) was at the bottom of the list with a -3.72% decline.
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Looking ahead
Consumer Price Index data arrives in the morning and is expected to be 8.4% year-over-year. There is a 10-year note auction in the afternoon.
CarMax (KMX) could be an interesting earnings report to watch for as remarks about the price of used cars could be useful to how inflation is tracking.
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Trends, Support, and Resistance
The Nasdaq gapped down at open today and moved lower. The next support area to test would be the round number 13,000.
The five-day and one-day trend lines point to a -0.04% decline for tomorrow.
The trend line from the 3/29 high ends with a -0.99% decline.
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Wrap-up
Tomorrow depends on the CPI data. If it's near or better than expected, we could see a bounce in the indexes. That bounce may be short-lived however as analysts don't expect the Fed to back off on aggressive action given it's a mid-term election year.
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, April 11, 2022
Facts: -2.18%, Volume higher, Closing Range: 4% (w/gap), Body: 74% Red
Good: Nothing
Bad: Gap-down, closing range, advance/decline ratio
Highs/Lows: Lower high, Lower low
Candle: Gap-down at open, small upper wick, no lower wick
Advance/Decline: 0.35, almost three declining for every advancing stock
Indexes: SPX (-1.69%), DJI (-1.19%), RUT (-0.71%), VIX (+15.17%)
Sector List: Industrials (XLI -0.32%) and Consumer Staples (XLP -0.41%) at the top. Technology (XLK -2.52%) and Energy (XLE -3.01%) at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors sold both equities and bonds ahead of CPI data coming this week that's expected to show record-high inflation and more motivation for the Fed to act aggressively.
The Nasdaq declined -2.18% by the end of the day, opening with a gap-down. The closing range of 4% and higher volume than the previous day shows a clear distribution day. The candle is 74% red with a small upper wick and a barely visible lower wick. There were almost three declining stocks for every advancing stock.
Small-caps held up the best with the Russell 2000 (RUT) only declining by -0.71%. The S&P 500 (SPX) dropped by -1.69% while the Dow Jones Industrial Average (DJI) fell by -1.19%. The VIX Volatility Index rose by +15.17%.
All eleven S&P 500 sectors dipped today. Industrials (XLI -0.32%) and Consumer Staples (XLP -0.41%) were at the top of the list while Technology (XLK -2.52%) and Energy (XLE -3.01%) had the biggest losses.
The US dollar index (DXY) advanced by +0.14%. US 30y and 10y Treasury Yields advanced, hitting their highest point since early 2019. The 2y Treasury Yield declined. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices declined sharply. Silver and Gold gained. Brent Oil dropped below $100 / barrel.
The put/call ratio (PCCE) climbed to 0.863. The CNN Fear & Greed index fell back into the Fear zone.
All big six mega-caps declined with Nvidia (NVDA) leading the way, dropping by -5.20%. Tesla (TSLA) was the last of the six to stay above key moving averages but dropped below its 21d EMA today. Facebook's market cap rose above Nvidia last week, so it may be time to update the big six list again.
Only four stocks in the mega-cap list gained today. Novartis (NVS) had the top gain, advancing +1.10%. Microsoft, Tesla, and Nvidia were at the bottom of the list.
Despite the market losses, there were quite a few gainers in the Daily Update Growth List. Draft Kings (DKNG) had the biggest gain, advancing +2.99% today. Enphase Energy (ENPH) was at the bottom of the list with a -3.72% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Consumer Price Index data arrives in the morning and is expected to be 8.4% year-over-year. There is a 10-year note auction in the afternoon.
CarMax (KMX) could be an interesting earnings report to watch for as remarks about the price of used cars could be useful to how inflation is tracking.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq gapped down at open today and moved lower. The next support area to test would be the round number 13,000.
The five-day and one-day trend lines point to a -0.04% decline for tomorrow.
The trend line from the 3/29 high ends with a -0.99% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Tomorrow depends on the CPI data. If it's near or better than expected, we could see a bounce in the indexes. That bounce may be short-lived however as analysts don't expect the Fed to back off on aggressive action given it's a mid-term election year.
Stay healthy and trade safe!
