Daily Market Update for 3/15

Original Chart

Notes

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

Tuesday, March 15, 2022

Facts: +2.92%, Volume lower, Closing Range: 93%, Body: 74% Green
Good: Solid green candle, higher high/low, great closing range
Bad: Couldn’t quite get above 13,000
Highs/Lows: Higher high, Higher low
Candle: Mostly green body, with a lower wick longer than upper wick
Advance/Decline: 1.33, more advancing than declining stocks
Indexes:SPX (+2.14%), DJI (+1.82%), RUT (+1.40%), VIX (-6.11%)
Sector List: Technology ( XLK +3.36%) and Consumer Discretionary ( XLY +3.35%) at the top. Real Estate ( XLRE +0.79%) and Energy ( XLE -3.66%) at the bottom.

Market Overview

Oil prices dropped below 99. 01 and the Producer Price Index indicated some relief on inflation , giving some assurance to investors that the Fed might not get too hawkish with interest rate hikes. That helped markets bounce to the upside on Tuesday.

The Nasdaq rose +2.92%. Volume was lower than the previous day but still higher than the 50-day average volume . The candle has a 74% green body with a short lower wick and barely any upper wick, ending the day with a 93% closing range. There were more advancing stocks than declining stocks.

The S&P 500 (SPX) gained +2.14%, helped by the large mega-caps that performed well for the day. The Dow Jones Industrial Average (DJI) climbed by +1.82%. The Russell 2000 (RUT) gained +1.40%. The VIXVolatility Index fell by -6.11%, but remains elevated.

All S&P 500 sectors except for the Energy sector gained. Growth sectors topped the list. Technology ( XLK +3.36%) and Consumer Discretionary ( XLY +3.35%) were the top-performing sectors. Energy ( XLE -3.66%) dropped as the price of oil plunged from its recent highs.

The Producer Price Index for February showed growth in prices of 0.8% compared to the forecast of 0.9%. The Core Producer Price Index, which excludes food and energy, rose by only 0.2% but was expected to rise 0.6%. The NY Empire State Manufacturing index showed worsening conditions for the sector, registering -11.80 compared to the forecast of +7.0.

Brent Oil fell below $100 for the first time since prices soared in the first week of March. The US Dollar index DXY ) declined by -0.08%. US 30y and 10y Treasury Yields rose while the 2y yield declined. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices rose. Silver and Gold prices continued to fall.

The put/call ratio ( PCCE ) declined to 0.907. The CNN Fear & Greed index is still in the Extreme Fear area.

The big six all gained today. Nvidia NVDA ) led the list of six with a +7.70% gain. Tesla TSLA advanced +4.63%. Microsoft MSFT ) and Amazon ( AMZN ) both gained around 3.9%.

Nvidia and Tesla also topped the broader mega-cap list. Only four mega-caps declined. Chevron CVX ) and Exxon Mobil XOM ) were at the bottom of the list with -5.06% and -5.69% declines.

Peloton rose +11.93% after getting positive commentary from an analyst at Bernstein. Only three stocks in the list had a decline, led by Sumo Logic which lost -1.42%.

Looking ahead

In the morning, Retail Sales data for February will be available. Sales are expected to be less than in January. Crude Oil Inventories will be available after the market opens.

The biggest news for tomorrow will be the Fed meeting and their interest rate decision which will come at 2p in the afternoon. Investors will also be interested in the interest rate projections for the rest of this year.

Trends, Support, and Resistance

The Nasdaq returned to the 13,000 support/resistance area. It was not able to close above the line, but could possibly move back above it tomorrow.

If the one-day trend line continues, expect a +1.28% advance for Wednesday.

If the index returns to the trend line from the 2/10 high, that would mean a -1.51% decline.

The five-day trend line points to a -2.88% decline for Wednesday.

Wrap-up

Finally, oil prices and the producer price index relieved some pressure from inflation worries. Markets reacted positively to the news and had a nice bump to the upside today. But investors will be even more sensitive to what comes from the Fed meeting tomorrow.

Stay healthy and trade safe!

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