Daily Market Update for 4/18

Original Chart

Notes

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

Monday, April 18, 2022

Facts: -0.14%, Volume lower, Closing Range: 57%, Body: 7% Green
Good: Closing range, lower volume on decline
Bad: Lower high, lower low, continued downtrend
Highs/Lows: Lower high, Lower low
Candle:Spinning top , thin body in middle of candle shows indecision
Advance/Decline: 0.35, almost three declining stocks for every advancing stock
Indexes:SPX (-0.02%), DJI (-0.11%), RUT (-0.74%), VIX (-2.33%)
Sector List: Energy ( XLE +1.47%) and Financials ( XLF +0.60%) at the top. Consumer Staples ( XLP -0.82%) and Health ( XLV -1.10%) at the bottom.

Market Overview

Stock indexes receded as treasury yields rose on the emerging likelihood of a recession in the next two years.

The Nasdaq declined -0.14%, ending the day near where it opened. That created a spinning top candle where the body is thin (7% green) and in the middle of long upper and lower wicks. Volume was lower than the previous day, and also indicated indecision as the index chopped up and down. There were almost three declining stocks for every advancing stock.

The S&P 500 (SPX) nearly ended the day positive after a late rally, but the result was a -0.02% decline for the day. The Dow Jones Industrial Average (DJI) declined by -0.11%. The Russell 2000 (RUT) dropped by -0.74%. The VIXVolatility Index fell by -2.33%.

Five of the eleven S&P 500 sectors advanced . Energy ( XLE +1.47%) and Financials ( XLF +0.60%) were at the top of the list. Consumer Staples ( XLP -0.82%) and Health ( XLV -1.10%) were the biggest losing sectors. While defensive sectors were at the bottom of the list, the growth sectors of Technology ( XLK +0.33%) and Consumer Discretionary ( XLY +0.30%) ended in the positive.

The US Dollar index DXY ) gained +0.32%. US 30y and 10y Treasury Yields rose while the 2y Yield declined. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices dropped. Copper Futures rose sharply. Brent Oil continues to climb, closing above $110 today.

The put/call ratio rose to 0.794. The CNN Fear & Greed Index remains in between the Fear and Neutral range.

Five of the big six mega-caps rose. Apple AAPL ) was the only of the six to decline today, falling by -0.13% but recovering some losses later in the session. Tesla TSLA ) had the biggest gain, rising by +1.96%. I moved Facebook FB ) back into the big six as its market cap remained above Nvidia NVDA ) for the past two weeks.

Bank of America Corp ( BAC ) was the top mega-cap for the day, climbing +3.41% after topping analyst estimates in its early morning earnings release. Pfizer PFE ) was at the bottom of the list, losing -2.41% and dragging the health sector lower.

Twitter TWTR ) rose to the top of the Daily Update Growth List, climbing +7.48% in another wild swing as the Elon Musk drama continues to unfold. Niu Technologies NIU ) was at the bottom of a long list of losers, declining by -6.72% to end up in the bottom spot.

Looking ahead

Building Permits and Housing Starts data for March arrive in the morning before the market opens. The weekly APICrude Oil Stock will be reported at the end of the day.

J&J ( JNJ ), Netflix NFLX ), Lockheed Martin LMT ), IBM IBM ), Halliburton (HAL), Fifth Third ( FITB ), and Hasbro (HAS) are some of the earnings reports to watch for tomorrow.

Trends, Support, and Resistance

The Nasdaq continued its decline today but is still well above the 13,000 support area .

The five-day and one-day trend lines point to a -0.02% decline for Tuesday.

If the index returns to the trend line from the 3/29 high, that would mean a -1.58% decline.

Wrap-up

If the indexes want to break out of the current decline, it’s a good sign that Energy and Financials are leading us higher. These often lead at the start of upcycles and then growth and small-caps follow in later rotations.

Sustaining any uptrend will come down to how the earnings season plays out. Bank of America was a good surprise this morning.

Stay healthy and trade safe!

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