Summary: After one of the best weekly gains of the year, the index kicked this week off with a pullback. Growth stocks led stocks lower, but small caps held onto gains for the day.
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, June 27, 2022
Facts: -0.72%, Volume lower, Closing Range: 20%, Body: 72% Red
Good: Stay above 21d EMA, higher high, higher low, volume lower on decline
Bad: Closing range
Highs/Lows: Higher high, Higher low
Candle: Thick red body between small upper and lower wicks
Advance/Decline: 0.78, more declining than advancing stocks
Indexes: SPX (-0.30%), DJI (-0.20%), RUT (+0.34%), VIX (-1.03%)
Sector List: Energy (XLE +2.93%) and Utilities (XLU +0.81%) at the top. Communications (XLC -0.95%) and Consumer Discretionary (XLY -1.05%) at the bottom.
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Market Overview
After one of the best weekly gains of the year, the index kicked this week off with a pullback. Growth stocks led stocks lower, but small caps held onto gains for the day.
The Nasdaq declined by -0.72% after gaining +7.49% last week. Volume was much lower than Friday's 80% surge in volume. The 73% red body sits below a tiny upper wick and slightly longer lower wick. The index started the day with gains, but then moved lower, ending with a closing range of 18%. There were more declining than advancing stocks.
The Russell 2000 (RUT) held onto gains for the day, advancing by +0.34%. The S&P 500 (SPX) closed -0.30% lower and the Dow Jones Industrial Average (DJI) declined by -0.20%. The VIX Volatility Index declined by -1.03%.
Only three of the eleven S&P 500 sectors gained today. Energy (XLE +2.93%) and Utilities (XLU +0.81%) were the top two sectors. Communications (XLC -0.95%) and Consumer Discretionary (XLY -1.05%) had the largest declines.
Durable Goods Orders in May were higher than expected, rising 0.7% month-over-month compared to the expectation of 0.1%. Pending Home Sales for May were expected to decline by -3.7% but instead rose by 0.7%.
The US Dollar Index (DXY) declined by -0.17%. US 30Y, 10Y, and 2Y Treasury Yields all rose. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices declined. Brent Oil rose by +2.36% and topped $110 a barrel again after new sanctions against Russia were proposed.
The put/call ratio (PCCE) rose to 0.761. The CNN Fear & Greed Index is back in the Fear range after being in Extreme Fear early last week. The NAAIM Money Manager Exposure index dropped to 19.86 last week.
All big six mega-caps declined today. Of the six, only Meta (FB) is below its 21d EMA. Alphabet (GOOG) is the only of the big six above both the 21d EMA and 50d MA.
Exxon Mobile (XOM) was the top mega-cap of the day, gaining by +2.45% as oil prices rose again. Amazon (AMZN) was at the bottom of the broader mega-cap list, declining by -2.78%.
Most of the Daily Update Growth List declined today, but there were some gainers. RobinHood (HOOD) had the best gain, advancing by +14.00% after an upgrade by Goldman Sachs. Sea Limited (SE) was at the bottom of the growth list with a -6.74% decline today.
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Looking ahead
CB Consumer Confidence for June will publish after the market opens.
We will also get the Goods Trade Balance and Retail Inventories for May. Later in the afternoon, the API Weekly Crude Oil Stock will publish.
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Trends, Support, and Resistance
The Nasdaq rallied in the first few minutes of the market but then faded the rest of the day. The low held well above the 21d EMA.
If the index returns to the five-day trend line, that would meet up with the trend line from the 6/16 low and result in a +1.92% gain for Tuesday.
The one-day trend line leads to a -0.32% decline.
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Wrap-up
After the massive volume on Friday and the weekly gains of over 7%, it's not a huge concern if the market pulls back a bit. The low of the day is well above the low of last Friday and volume was lower as the index declined.
Stay healthy and trade safe!
