Daily Market Update for 3/31

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 31, 2022

Facts: -1.54%, Volume lower, Closing Range: 1%, Body: 94% Red
Good: Lower volume
Bad: Closing range, advance/decline
Highs/Lows: Lower high, Lower low
Candle: Mostly red body, tiny upper wick
Advance/Decline: 0.41, more than two declining for every advancing stock
Indexes:SPX (-1.57%), DJI (-1.56%), RUT (-1.00%), VIX (+6.36%)
Sector List: Utilities ( XLU -0.11%) and Consumer Staples ( XLP -0.24%) at the top. Consumer Discretionary ( XLY -1.92%) and Financials ( XLF -2.29%) at the bottom.

Market Overview

No sector avoided losses among continuing worries over the war in Ukraine and the Fed’s response to inflation . Chinese stocks moved lower on disappointing economic data and COVID outbreaks.

The Nasdaq fell by -1.54%. Volume was lower than the previous day but the 94% red body and 1% closing range show selling throughout the day. There is a small upper wick formed after open but then a sell-off in the last hour erased a lower wick leaving behind a thick red bodied candle. There were more than two declining stocks for every advancing stock.

The S&P 500 (SPX) lost -1.57% while the Dow Jones Industrial Average (DJI) fell by -1.56%. Small caps held up the best with the Russell 2000 (RUT) declining only -1.00%. The VIXVolatility Index rose +6.26%.

All S&P 500 sectors declined. Defensive sectors were at the top of the sector list. Utilities ( XLU -0.11%) and Consumer Staples ( XLP -0.24%) had the least significant declines. Consumer Discretionary ( XLY -1.92%) and Financials ( XLF -2.29%) were at the bottom of the list.

PCE Price Index data was slightly lower than forecast. Weekly Initial Jobless claims came in at 202,000 compared to the forecast of 197,000. The Chicago PMI for March showed a stronger than expected manufacturing sector.

The US Dollar index DXY ) grew +0.52%. US 30y and 10y Treasury Yields were lower while the 2y Yields increased. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate bond prices moved lower. Brent Oil moved below $110, ending the day at $105.22.

The put/call ratio ( PCCE ) rose to 0.787. The CNN Fear & Greed index is just on the Fear side of Neutral. The NAAIM Money Manager Exposure Index rose to 79.72 from 52.69 the previous week.

All of the big six declined today. Alphabet had the biggest loss, declining by -2.10%. However, Amazon ( AMZN ) is the only one trading below any moving average line (the 200d MA).

No mega-caps gained today. Costco (COST) faired the best, only declining -0.11%. The biggest loser was Alibaba (BABA), declining -6.67% to end up at the bottom of the list.

The Daily Update Growth List had just eight stocks with gains. The best stock in the list was MongoDb , gaining +3.11%. Chinese stocks were at the bottom of the list with FUTU Holdings ( FUTU ) having the largest decline. The stock fell by -12.94%.

Looking ahead

Tomorrow is payrolls Friday when we get the monthly look at employment data in the early morning. We will also get the ISM Manufacturing Purchasing Managers Index after the market opens.

Trends, Support, and Resistance

The Nasdaq continued to pull back from the recent rally.

If the index will return to the trend line from the 3/14 low, it would take a +4.49% gain which is not likely to come in one day.

The five-day trend line points to a +2.80% gain.

If the one-day trend continues, we can expect another -0.23% decline for Friday.

Wrap-up

Investor jitters drove selling today. The war in Ukraine. Continuing high inflation . Economic data from China amid COVID outbreaks. Those were the major themes and will continue to drive volatility in the days and possibly weeks ahead.

We just ended the worst quarter for equities since the pandemic began. Here’s hoping for a better Q2!

Stay healthy and trade safe!

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