Daily Market Update for 12/13

Original Chart

Notes

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

Monday, December 13, 2021

Facts: -1.39%, Volume higher, Closing Range: 2%, Body: 91% Red
Good: Close above the 50d MA and 15,400 support area
Bad: Decline on higher volume , low closing range, tiny wicks around a red body
Highs/Lows: Lower high, Lower low
Candle: Mostly red body, tiny upper and lower wicks
Advance/Decline: 0.41, more than two declining stocks for every advancing stock
Indexes:SPX (-0.91%), DJI (-0.89%), RUT (-1.42%), VIX (+8.67%)
Sector List: Real Estate ( XLRE +1.34%) and Consumer Staples ( XLP +1.31%) at the top. Consumer Discretionary ( XLY -2.58%) and Energy ( XLE -2.78%) at the bottom.
Expectation: Lower

Market Overview

Fears over Omicron renewed caution as investors also anticipate the Fed meeting occurring this week. Defensive sectors gained for the day while all major indexes declined.

The Nasdaq fell -1.39%. The decline came with higher volume than the previous day, marking another distribution. The index sank below its 21d exponential moving average but closed above its 50d simple moving average . It also closed above the 15,400 support area . The closing range was 2%, underneath a 91% red body. There were more than two declining stocks for every advancing stock.

The S&P 500 (SPX) and Dow Jones Industrials Average (DJI) had similar declines, falling -0.91% and -0.89%. The Russell 2000 (RUT) dropped – 1.42%. The VIXVolatility Index rose +8.61%.

Only the four defensive sectors ended the day with gains. Real Estate ( XLRE +1.34%) and Consumer Staples ( XLP +1.31%) were the top performers. Consumer Discretionary ( XLY -2.58%) and Energy ( XLE -2.78%) had the most significant declines.

The US Dollar index DXY ) gained +0.33%. US 30y, 10y, and 2y Treasury Yields retreated again on new Omicron fears. High Yield ( HYG ) Corporate Bond prices remained flat while Investment Grade ( LQD ) Corporate Bond prices advanced Silver and gold prices gained for the day.

The put/call ratio ( PCCE ) declined to 0.689. The CNN Fear & Greed Index moved back toward Extreme Fear but remained in the Fear range.

All four largest mega-caps declined. Amazon ( AMZN ) closed below its 50d MA, declining -1.54% today. The other three are still above the 50d MA and the 21d EMA . Apple AAPL ) declined -2.07%. Alphabet GOOGL ) lost -1.47%. Microsoft MSFT ) fell -0.92%.

Pfizer PFE ) was the top mega-cap, gaining +4.59% today after announcing they will acquire Arena Pharmaceuticals ARNA ). Arena gained +80% on the news. Nvidia NVDA ) had the most significant decline in the mega-cap list, losing -6.74% today.

Peloton (PTON) gained +7.35%, topping the Daily Update Growth List. Peloton shot back at the HBO show “And Just Like That” with a digital advertisement to respond to the storyline. I won’t include any spoilers here, but it’s Big! The growth list is mostly losers for today. Ehang (EH) joined Nvidia at the bottom of the list with a -5.97% decline. Other Chinese stocks, including FUTU Holding ( FUTU ) and UP Fintech ( TIGR ), also declined by more than 5%.

Looking ahead

Producer Price Index data for November will be available in the morning.

API Weekly Crude Oil Stock will be available after the market closes.

Trends, Support, and Resistance

The Nasdaq dipped below the 21d EMA again, finding support at 15,400 and closing above its 50d MA.

The five-day trend line points to a +0.19% gain for tomorrow.

The trend line from the 11/22 high points to a -0.10% decline.

If the one-day trend line continues, expect a -0.54% decline for Tuesday.

Wrap-up

Well, we thought Omicron fears had subsided, but news from the UK over the weekend rose the alarm again. Additionally, investors are nervous about what will come out of the Fed meeting on Wednesday, which will include projections on Interest Rate hikes for 2022-2023.

Based on the chart, the expectation for tomorrow is Lower.

Stay healthy and trade safe!

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