Daily Market Update for 12/20

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 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.
Expectation: Lower

Market Overview

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.

The S&P 500 (SPX) closed with a -1.14% decline. The Dow Jones industrial Average (DJI) fell -1.23%. Russell 2000 (RUT) dropped -1.57%. The VIXVolatility index ended the day with a +6.02% gain.

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.

Pfizer PFE ) was the top mega-cap for the day, rising +2.59%. Alibaba (BABA) landed at the bottom of the mega-cap list after losing -5.81%.

Only five stocks in the Daily Update Growth List gained. Chewy CHWY ) topped the list with a +3.21% advance. Solar Edge ( SEDG ) was at the bottom of the list, losing -10.56%.

Looking ahead

General Mills ( GIS ), BlackBerry (BB), and Rite Aid (RAD) release earnings tomorrow.

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.

The five-day trend line and one-day trend line both point to a small +0.04% gain.

Wrap-up

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!

Comments

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