Daily Market Update for 3/17

Original Chart

Notes

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

Thursday, March 17, 2022

Facts: +1.33%, Volume lower, Closing Range: 98%, Body: 84% Green
Good: Closing range, support at 21d EMA , advance/decline
Bad: Lower volume
Highs/Lows: Higher high, Higher low
Candle: Mostly green body with a tiny lower wick
Advance/Decline: 2.85, almost three advancing for every declining stock
Indexes:SPX (+1.23%), DJI (+1.23%), RUT (+1.69%), VIX (-3.75%)
Sector List: Energy ( XLE +3.44%) and Materials ( XLB +1.92%) at the top. Consumer Staples ( XLP +0.69%) and Utilities ( XLU +0.42%) at the bottom.

Market Overview

All sectors rose on Thursday as investors’ worries eased about interest rate hikes and the war in Ukraine. However, oil prices are on the rise again and could create more volatility to close the week.

The Nasdaq rose +1.33%. Volume was lower than the previous day. The candle is covered by an 84% green body. A tiny lower wick formed when the index dipped to the 21d EMA . The closing range of 98% comes after a late afternoon rally. There were nearly three advancing stocks for every declining stock.

Small-caps outperformed today with the Russell 2000 (RUT) gaining +1.69%. The S&P 500 (SPX) and the Dow Jones Industrial Average (DJI) both rose by +1.23%. The VIXVolatility Index declined by -3.75%.

All S&P 500 sectors advanced . Energy ( XLE +3.44%) and Materials ( XLB +1.92%) were the top two as oil prices and commodity prices rose again. Consumer Staples ( XLP +0.69%) and Utilities ( XLU +0.42%) were at the bottom of the sector list.

Building Permits and Housing Starts in February were higher than forecasted. The weekly Initial Jobless Claims came in less than expected. There were only 214,000 claims vs the forecast of 220,000. The Philadelphia Fed Manufacturing Index for March showed much better conditions than expected, with the index registering 27.4 vs the expectation of 15.0.

The US Dollar Index DXY ) declined by -0.39%. US Treasury yields didn’t move much but all declined a bit today. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices continued to rebound higher from their low points on Monday. Brent Oil closed the day above $100 again. Silver and Gold both were higher.

The put/call ratio ( PCCE ) declined to 0.709. The CNN Fear & Greed index moved back into the Fear range from Extreme Fear yesterday. The NAAIM money manager exposure index rose to 46.68 from exposure of 42.58 last week.

The big six all rose but more modestly than the previous two days. Tesla TSLA ) had the biggest gain, rising by +3.73% today. Amazon ( AMZN ) was next with a +2.70% gain. Nvidia NVDA ) closed above its 50d moving average, gaining +1.10%, and is not above all three moving averages I track.

Tesla topped the broader mega-cap list with its gain. At the bottom of the list was Alibaba (BABA), declining -4.39% as investors take profits from yesterday’s massive rise for Chinese stocks.

Lemonade LMND ) topped the Daily Update Growth List, gaining +14.54%. The Chinese stocks that topped the list yesterday, were at the bottom of the list today. Niu Technologies NIU ) declined by -6.51%, landing at the bottom of the list.

Looking ahead

After the market opens on Friday, we’ll have the Existing Home Sales stats for February.

Friday is a quadruple witching day for the market which means that derivatives for stock index futures , stock index options, stock options, and single stock futures all expire on the same day creating more volatility than usual in the market.

Trends, Support, and Resistance

The Nasdaq rose in the morning but then dipped back to the 21d EMA where it got support and then rose higher for the rest of the day.

The trend line from the 3/14 low is pointing at a +2.81% advance if this current rally can continue.

The one-day trend line ends with a +1.48% gain for tomorrow.

The five-day trend line points to a -0.29% decline.

Wrap-up

The market seems much more optimistic over the last few days. There’s a big spike in stocks that are over their 50d moving average as the gains since Tuesday were broadly shared across the market. Still, after three days of big gains and investors wanting to protect from war news over the weekend, we may see some selling to end the week.

Stay healthy and trade safe!

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