Daily Market Update for 12/23

Original Chart

Notes

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

Thursday, December 23, 2021

Facts: +0.85%, Volume lower, Closing Range: 74%, Body: 64% Green
Good: Rise above 15,600 support area , closing range of 74%
Bad: Lower volume , some minor selling before close
Highs/Lows: Higher high, Higher low
Candle: Mostly green body with a slightly longer upper wick
Advance/Decline: 2.24, more than two advancing stocks for every declining stock
Indexes:SPX (+0.62%), DJI (+0.55%), RUT (+0.89%), VIX (-3.60%)
Sector List: Consumer Discretionary ( XLY +1.39%) and Industrials XLI +1.18%) at the top. Utilities ( XLU -0.01%) and Real Estate ( XLRE -0.30%) at the bottom.
Expectation: Sideways or Higher

Market Overview

Even amongst mixed economic data, markets continued to rally as more information emerges about Omicron. Optimism continues to build that the global economy can power thru further pandemic waves.

The Nasdaq climbed another +0.85%. The closing range of 74% comes above a 64% green body. The slightly longer upper wick formed just before close as investors closed positions before a long holiday weekend and expected lower volume over the next few weeks. There were more than two advancing stocks for every declining stock.

Small-caps continue to lead this week with the Russell 2000 (RUT) gaining +0.89% today. The S&P 500 (SPX) rose +0.62% and the Dow Jones Industrial Average (DJI) advanced +0.55%. The VIXVolatility Index fell to its lowest point since rising in late November, declining -3.60% today.

Consumer Discretionary ( XLY +1.39%) and Industrials XLI +1.18%) were the top two sectors. Utilities ( XLU -0.01%) and Real Estate ( XLRE -0.30%) were at the bottom of the list.

Economic data was mixed. Durable Goods Orders for November was higher than expected. However, PCE Price Index data for November was also higher than expected as high inflation continues. Personal Spending was lower than the previous month, but matched the forecast. Weekly Initial Jobless Claims stayed steady at 205,000.

The US Dollar Index DXY ) declined -0.06%. US 30y, 10y, and 2y Treasury Yields all rose for the day. High Yield ( HYG ) Corporate Bond prices rose while Investment Grade ( LQD ) Corporate Bond prices dropped.

The put/call ratio ( PCCE ) declined to 0.642. The CNN Fear & Greed Index moved back toward Neutral, but remains in the Fear range. The NAAIM Money Manager Exposure Index rose to 67.02 from 52.22 the week before.

All four largest mega-caps had gains. Microsoft MSFT ), Apple (APPL), and Alphabet GOOGL ) gained +0.45%, +0.36% and +0.34%, respectively. Amazon ( AMZN ) rose just +0.02% and still closed below its 21d EMA and 50d MA.

Tesla TSLA ) topped the mega-cap list for a second day, gaining +5.76% today. Pfizer PFE ) was at the bottom of the list with a -1.41% decline.

Chewy CHWY recovered most of its post-earnings decline with a +6.28% advance today, bringing it to the top of the Daily Update Growth List. JD.com JD ) was at the bottom of the list, losing -6.92%.

Looking ahead

Markets are closed on Friday due to the Christmas Holiday.

There are no significant economic events or earnings reports on Monday.

Trends, Support, and Resistance

The Nasdaq rose above the 15,600 support area today.

If the one-day and five-day trend lines continue into Monday, that would mean another +0.84% advance.

The trend line from the 11/22 high points to a -2.98% decline.

Wrap-up

Three days of green in the markets was a nice present leading into the Christmas holiday. Volume was shrinking however and one can expect volume to continue to be low for the next two weeks. That could give more influence to the bulls or bears, but typically the last week and first week of the year are bullish .

The expectation for Monday is Sideways or Higher.

Stay healthy and trade safe!

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