Daily Market Update for 3/30

Original Chart

Notes

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

Wednesday, March 30, 2022

Facts: -1.21%, Volume lower, Closing Range: 26%, Body: 52% Red
Good: Lower volume on decline, still well above last week’s close
Bad: Closing range, lower high, lower low
Highs/Lows: Lower high, Lower low
Candle: Medium red body in middle of candle, equal upper and lower wicks
Advance/Decline: 0.33, three declining for every advancing stock
Indexes:SPX (-0.63%), DJI (-0.19%), RUT (-1.97%), VIX (+2.28%)
Sector List: Energy ( XLE +1.16%) and Utilities ( XLU +0.83%) at the top. Technology ( XLK -1.33%) and Consumer Discretionary ( XLY -1.52%) at the bottom.

Market Overview

Stocks pulled back after yesterday’s rally as investors awaited any breakthroughs in the Russia-Ukraine negotiations.

The Nasdaq fell by -1.21%. The decline nearly filled the gap-up at yesterday’s open. Volume was lower than the previous day. The 52% red body sits in the middle of candle with equal length upper and lower wicks. The upper wick, formed in the morning. The index then declined, briefly pausing at 14,500 before moving lower. A quick rally before the close created the lower wick.

The Russell 2000 (RUT) had the biggest decline, pulling back by -1.97% today. The S&P 500 (SPX) dropped -0.63%. The Dow Jones Industrial Average (DJI) declined only -0.19%, helped by a rally in energy stocks.

Four of the eleven S&P 500 sectors gained. Energy ( XLE +1.16%) was at the top of the sector list, followed closely by Utilities ( XLU +0.83%). The other two gaining sectors were both defensive sectors. Technology ( XLK -1.33%) and Consumer Discretionary ( XLY -1.52%) were at the bottom of the list.

GDP data for Q4 was lower than expected, showing quarter-over-quarter growth of 6.9% compared to expected growth of 7.1%. GDP Price Index data also came in lower than expected, possibly good news that prices are growing less quickly than thought. Crude Oil Inventories were lower than expected, helping boost oil prices today.

Brent Oil prices moved higher on reports that Germany may ration oil and the US Crude Oil Inventories were lower than expected. The US Dollar index DXY ) declined by -0.58%. US 30y, 10y, and 2y Treasury Yields all declined and the inversion in the 10y and 2y started to recover. High Yield ( HYG ) Corporate Bond prices declined while Investment Grade ( LQD ) Corporate Bond prices rose.

The put/call ratio ( PCCE ) declined to 0.627. The CNN Fear & Greed index is at Neutral.

All big six declined. Amazon ( AMZN ) dipped back below its 200d MA but all others are well above moving averages.

Novo Nordisk (NOVO) was the top mega-cap today, advancing +2.12%. UnitedHealth ( UNH ) followed with a +2.12% advance, helping the health sector end the day with gains. ASML Holding ( ASML ) was at the bottom of the mega-cap list, declining by -3.47%.

The Daily Update Growth List had only three gainers. Lululemon Athletica (LULU) was at the top of the list, gaining +9.58% on strong earnings and a stock repurchase announcement. RH RH ) and Chewy CHWY ) both disappointed investors with their earnings and landed at the bottom of the list. They declined by -13.33% and -16.10% respectively.

Looking ahead

PCE Price Index Data along with Personal Spending for February comes in the morning. We will also get the weekly Initial Jobless Claims. After the market opens, the Chicago Purchasing Managers Index data will provide a look at manufacturing health.

Walgreens ( WBA ) reports earnings tomorrow. The company will give one more look at the health of the Retail sector which so far had mixed results in earnings this week.

Trends, Support, and Resistance

The Nasdaq pulled back from yesterday’s rally. On the way down, it go support at 14,500 but then ended the day below that area.

If the index returns to the trend line from the 3/14 low, that would mean a +2.83% gain for Thursday.

The five-day trend line points to a +2.11% gain.

If the pull-back continues, the one-day trend line ends with a -1.15% decline for tomorrow.

Wrap-up

Investors, and the general public, were hoping for more of a breakthrough in negotiations to end the war between Russia and Ukraine. Negotiators on both sides needed time to write a formal agreement and get support from within their parties. Talks will resume in online formats on Friday.

Germany has said it may start to ration oil . That caused Brent Oil to rise above $110 again today but is now back below that mark. Tomorrow’s inflation data tomorrow will have the most influence over markets as we wait for better news from Ukraine.

Stay healthy and trade safe!

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