Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
Monday, December 20, 2021
Facts: -1.24%, Volume lower, Closing Range: 82%, Body: 33% Green
Good: Lower volume on decline
Bad: Lower high, lower low, load advance/decline
Highs/Lows: Lower high, Lower low
Candle: Short body in upper half of candle, longer lower wick
Advance/Decline: 0.29, more than three declining stocks for every advancing stock
Indexes:SPX (-1.14%), DJI (-1.23%), RUT (-1.57%), VIX (+6.03%)
Sector List: Consumer Staples ( XLP -0.65%) and Utilities ( XLU -0.69%) at the top. Financials ( XLF -2.41%) and Energy ( XLE -2.50%) at the bottom.
After new lockdowns to contain Omicron in Europe and a disruption for the Build Back Better bill, indexes took another day of losses.
The Nasdaq declined -1.24%. Volume was lower Friday and lower than the recent average volume . The candle is 33% green body in the upper half of the candle which has an 82% closing range. The lower wick Is longer than the upper wick. There were more than three declining stocks for every advancing stock.
All eleven S&P 500 sectors declined for the day. The defensive sectors, Consumer Staples ( XLP -0.65%) and Utilities ( XLU -0.69%) performed the best. Cyclical sectors Financials ( XLF -2.41%) and Energy ( XLE -2.50%) were at the bottom.
The US Dollar index ( DXY ) declined by -0.17%. The US 30y and 10y Treasury Yields rose while the 2y yield declined. Both High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices declined. Crude Oil Futures dropped after new travel restrictions. Timber (WOOD) dropped sharply today.
The put/call ratio ( PCCE ) declined to 0.673. The lower ratio says investors are betting that this is a bottom, but that doesn’t mean they are right. We find that out later. The CNN Fear & Greed index moved back into Extreme Greed.
All four largest mega-caps declined. Apple ( AAPL ) declined -0.81% but closed above its 21d EMA . Microsoft ( MSFT ) fell -1.20%, closing below its 21d EMA and 50d MA. Alphabet ( GOOGL ) also closed between the two key averages. Amazon ( AMZN ) dropped below its 200d MA with a -1.73% decline.
Trends, Support, and Resistance
The Nasdaq dropped below 15,000 area during the day and then met resistance trying to rise back above that line.
If the index returns to the trend line from the 11/22 high, that would mean a +0.83% advance for tomorrow.
It’s tough to tell how much of today was because of Omicron fears and how much of today was because of Manchin declaring he won’t support the Build Back Better bill. Either way, these events continue to cause a lot of volatility in a skittish market.
The expectation for Tuesday is lower.
Stay healthy and trade safe!
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