Daily Market Update for 10/8

Original Chart

Notes

Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.

Friday, October 8, 2021

Facts: -0.51%, Volume lower, Closing Range: 8%, Body: 88% Red
Good: Decline on lower volume , stayed above 14,500 support area
Bad: Lower high, lower low, selling most of day
Highs/Lows: Lower high, Lower low
Candle: Mostly red body, with tiny upper and lower wicks
Advance/Decline: 0.49, two declining stocks for every advancing stock
Indexes:SPX (-0.19%), DJI (-0.03%), RUT (-0.76%), VIX (-3.94%)
Sector List: Energy ( XLE +3.08%) and Financials ( XLF +0.49%) at the top. Utilities ( XLU -0.74%) and Real Estate ( XLRE -1.09%) at the bottom.
Expectation: Sideways

Market Overview

Markets moved lower after payrolls data missed expectations. Energy stocks led the day following Crude Oil Futures higher, while Financial stocks did well on rising interest rates.

The Nasdaq lost -0.51% for the day. Volume was lower than the previous day. The candle is almost entirely red body, with tiny upper and lower wicks. The 88% Red body is above an awful 8% closing range. There were two declining stocks for every advancing stock.

The Dow Jones Industrial Average (DJI) lost only -0.03% for the day while leading the major indexes in gains for the week. The S&P 500 (SPX) declined -0.19%. The Russell 2000 (RUT) was the only index to decline for the week, losing -0.76% today. Despite selling across the market, the VIXVolatility Index declined -3.94%, continuing to fall from its elevated level earlier in the week.

Energy ( XLE +3.08%) and Financials ( XLF +0.49%) were the only gaining sectors today and performed the best for the week. Energy is rising on higher oil prices while Financials is getting the benefit of higher interest rates. Next week kicks of earnings season for the big banks. Utilities ( XLU -0.74%) and Real Estate ( XLRE -1.09%) were at the bottom of today’s sector list.

The labor market added only 194,000 payrolls in September against a forecast of 500,000. However, the Unemployment Rate dropped to 4.8%, while analysts expected 5.1%. Average Hourly Earnings grew faster than expected.

The US Dollar weakened for the day, with the dollar index DXY ) declining -0.10%. US Treasury yields rose for another day. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices continue to fall along with Treasury prices (prices fall, yields rise). Crude Oil Futures soared back to record highs. Timber fell, but Copper and Aluminum rose.

The put/call ratio fell to 0.734. The CNN Fear & Greed Index remains in the middle of the fear range. The NAAIM money manager exposure index climbed to 68.6 after declining to 55.02 the previous week.

Of the four largest mega-caps, only Alphabet GOOGL ) gained today, closing above its 50d moving average line. Microsoft MSFT ) closed flat after climbing mid-day. Alibaba (BABA) topped the mega-cap list again with a +3.54% gain. Exxon Mobile ( XOM ) and Chevron ( CVX ) were also in the top four, carrying the Energy sector higher.

Upwork UPWK ) was the top performer in the daily update growth list. The list contains mostly decliners today, with MongoDB MDB ) dropping the most at -5.05%.

Looking ahead

There are no significant economic events scheduled for Monday. Next week will kick-off earnings season for big banks, but none are on the schedule for Monday.

Trends, Support, and Resistance

The Nasdaq steadily declined from the 21d EMA throughout the day but closed above the 14,500 support area .

The five-day trend line points to a +1.64% gain for Monday.

The one-day trend line ends with a -0.38% decline.

The trend line from the 9/7 high points to a -1.60% loss to start the week.

Wrap-up

It doesn’t take much to cause declines in this skittish market. The lack of new payrolls, while the unemployment rate dropped in September, is a head-scratcher. Add that to the research list for this weekend.

The expectation for Monday is sideways.

Stay healthy and trade safe!

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