Daily Market Update for 4/19

Original Chart

Notes

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

Tuesday, April 19, 2022

Facts: +2.15%, Volume lower, Closing Range: 93%, Body: 85% Green
Good: Solid green candle on higher volume , higher high, higher low, closing range
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Mostly green body with small upper and lower wicks
Advance/Decline: 1.93, almost two advancing for every declining stock
Indexes:SPX (+1.61%), DJI (+1.45%), RUT (+2.04%), VIX (-3.61%)
Sector List: Consumer Discretionary ( XLY +2.90%) and Real Estate ( XLRE +2.10%) at the top. Utilities ( XLU +0.65%) and Energy ( XLE -0.81%) at the bottom.

Market Overview

Strong earnings reports thus far in the quarter helped investor confidence in the market and push indexes higher today.

The Nasdaq rose +2.15% on higher volume than the previous day. The 93% closing range comes above a thick 85% green body. A short lower wick formed in the early morning while an even shorter upper wick formed at the close. Buying was dominant throughout the day as two stocks advanced for every declining stock.

The Russell 2000 (RUT) also performed well, climbing by +2.04% today. The S&P 500 (SPX) gained +1.61% and the Dow Jones Industrial Average (DJI) advanced +1.45%. The VIXVolatility Index remains elevated but declined by -3.61% today.

Ten of the eleven S&P 500 sectors gained today. Consumer Discretionary ( XLY +2.90%) and Real Estate ( XLRE +2.10%) ended the day as the top sectors. Energy ( XLE -0.81%) was the only declining sector.

Both Building Permits and Housing Starts exceeded the forecast for March. API Weekly Crude Oil Stock was lower than expected, but overall oil prices dropped on fears of slower growth.

The US Dollar Index DXY ) continued to rise, gaining +0.18% today. US 20y, 10y, and 2y Treasury Yields all rose. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices dropped. Silver and Gold prices fell sharply. Brent Oil dropped to $1.07 / barrel after topping $110 earlier this week.

The put/call ratio ( PCCE ) declined to 0.782. The CNN Fear & Greed Index is at Neutral.

The big six all gained today. Amazon ( AMZN ) had the biggest gain, rising by +3.49% and closing above its 21d EMA and 50d MA.

Nike NKE ) was the top mega-cap for the day, topping Amazon’s gain with a +4.12% advance. Pfizer PFE ) ended the day at the bottom of the list again, declining by -3.20% today.

The Daily Update Growth List did very well today with only three stocks declining, two of them being Chinese stocks which all underperformed today. Roku (ROKU) was the top stock of the day, climbing by +8.22%. However, the stock was down after hours by almost 6%, likely because of Netflix’s bad news. At the bottom of the growth list is Twitter TWTR ) which declined by -4.73% today.

Netflix NFLX ) dropped -25% in after-hours trading. The company had the first subscriber shrinkage in over a decade. That’s going to have an impact on the Communications sector tomorrow.

Looking ahead

After the market opens on Wednesday, we will get Existing Home Sales data for March. Crude Oil Inventories will be released shortly after that. Beige Books will be released from the Fed in the afternoon.

Tesla TSLA ), Procter & Gamble PG ), ASML ASML ), and Abbott Labs ABT ) are some of the earnings reports coming on Wednesday.

Trends, Support, and Resistance

The Nasdaq rose throughout the day but stopped short of the 50d MA.

If the one-day trend line continues into Wednesday, the index could rise over the 50d MA and 21d MA, ending the day with a +1.11% gain.

If the index returns to the five-day trend line , that would mean a -1.35% decline.

The trend line from the 3/29 high points to a -3.58% decline, but that seems unlikely given the current chart pattern. Some surprise bad news could change that.

Wrap-up

The Nasdaq has been moving sideways, but within a wide trading range, for the past few sessions. Could this finally be the breakout we needed? We need to break from that range first which the top is around 13,685. Then it would help if we can close above the 50d MA and 21d EMA . Do all that on higher volume and with a high advance/decline ratio and it would build a lot of confidence for a move toward the 200d MA.

Stay healthy and trade safe!

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