Daily Market Update for 3/18

Original Chart

Notes

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

Friday, March 18, 2022

Facts: +2.05%, Volume higher, Closing Range: 99%, Body: 89% Green
Good: High volume advance, great closing range
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Mostly green body, tiny lower wick, no upper wick
Advance/Decline: 1.86, more than three advancing for every two declining stocks
Indexes:SPX (+1.17%), DJI (+0.80%), RUT (+1.02%), VIX (-7.01%)
Sector List: Consumer Discretionary ( XLY +2.11%) and Technology ( XLK +2.05%) at the top. Energy ( XLE -0.09%) and Utilities ( XLU -0.85%) at the bottom.

Market Overview

The Nasdaq had its best week since November 2020, rallying more than 10% from Monday’s low to close with a +8.18% gain.

The tech-dominated index rose +2.05% for the day. Volume was much higher thanks to a quadruple witching day where derivative contracts all expire the same day, causing an increase in volume . The candle is 89% green body with a 99% closing range, leaving behind a small lower wick created right after the market opened.

The S&P 500 (SPX) climbed by +1.17%. The Dow Jones Industrial Average (DJI) rose by +0.80%. The Russell 2000 (RUT) advanced +1.02%. The VIXVolatility Index fell further, declining -7.01% today.

Nine of the eleven S&P 500 (SPX) sectors gained today. Growth sectors led again with Consumer Discretionary ( XLY +2.11%) and Technology ( XLK +2.05%) at the top of the sector list. Energy ( XLE -0.09%) and Utilities ( XLU -0.85%) were the two declining sectors.

Existing Home Sales for February declined -7.2% month-over-month. Much more than the forecast of a -1.0% decline.

Brent Oil remained above $100, closing at $105 today. The US Dollar index DXY ) gained +0.22%. The US 30y and 10y Treasury yieldS declined while the 2y Treasury yield advanced . High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices advanced Gold and Silver declined. Timber continues to rise back toward its 2022 highs after dropping sharply this month.

The put/call ratio ( PCCE ) declined to 0.676. The CNN Fear & Greed index is in the middle of the Fear range as it moves back toward neutral. A drop in market volatility and less demand for safe-haven assets is driving the move in the index.

The big six made significant progress in their charts today. Nvidia NVDA ) is outperforming in the current rally, gaining +6.81% and well above its moving average lines. All six are above their 21d exponential moving average . Five are above their 50d moving average. Three of the six are above their 200d moving average.

Alibaba (BABA) topped the mega-cap list with a +7.90% gain, beating out Nvidia for the top spot. Verizon Communications VZ ) was at the bottom of the list, declining -2.98%.

In the Daily Update Growth List, UP Fintech ( TIGR ) was at the top. The company benefited from both the momentum in Chinese stocks and a great earnings report and outlook. The stock soared +33.66% today. The stock is up +73.42% for the week and over 100% from its low on Monday. The other Chinese stocks in the list also dominated the top spots.

Only two stocks declined in the growth list, Solar Edge ( SEDG ) declined -0.66% and Penn National Gaming ( PENN ) lost -0.11%.

Looking ahead

There is not much economic data scheduled for Monday, but Fed Chair Jerome Powell will speak in the morning.

Nike NKE ), Pinduoduo PDD ), and Tencent Music Entertainment ( TME ) report earnings on Monday.

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Trends, Support, and Resistance

The Nasdaq moved above the 13,800 and closed right just above the 50d moving average line.

The one-day and five-day trend lines and the trend line from the 3/14 low all point to a gain of around 2% on Monday if the current momentum continues.

Wrap-up

I thought there might be a pullback in indexes today as investors take profits and protect from war news over the weekend. The optimism and high volume from expiring derivative contracts were enough to keep the strong rally from Monday’s low alive.

Stay healthy and trade safe!

Comments

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