Daily Market Update for 4/22

Original Chart

Notes

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

Friday, April 22, 2022

Facts: -2.55%, Volume lower, Closing Range: 3%, Body: 86% Red
Good: Lower volume
Bad: Drop below 13,000, closing range and advance/decline
Highs/Lows: Lower high, Lower low
Candle: Large red body with small upper wick
Advance/Decline: 0.24, four declining for every advancing stock
Indexes:SPX (-2.77%), DJI (-2.82%), RUT (-2.55%), VIX (+24.38%)
Sector List: Consumer Staples ( XLP -1.57%) and Utilities ( XLU -1.68%) at the top. Health ( XLV -3.65%) and Materials ( XLB -3.74%) at the bottom.

Market Overview

Indexes continued to dip as investors absorbed the likely 50-basis point interest rate hike coming in a few weeks.

The Nasdaq fell -2.55%, only pausing briefly at 13,000 before dipping below the support area . The only good news was that volume was lower than the previous day, signaling some slowdown in selling. But buyers were not present as seen by the 86% red body and 3% closing range on the candle. There were four declining stocks for every advancing stock.

The Russell 2000 (RUT) matched the Nasdaq’s decline, also falling by -2.55%. The S&P 500 (SPX) declined by -2.77%. The Dow Jones Industrial Average (DJI) fell by -2.82%. The VIXVolatility shot up by +24.38%.

All eleven S&P 500 sectors declined. Even the best sector for today, Consumer Staples ( XLP -1.57%), fell more than one percent. Utilities ( XLU -1.68%) followed Consumer Staples at the top of the list. Health ( XLV -3.65%) and Materials ( XLB -3.74%) were the worst-hit sectors.

The Manufacturing Purchasing Manager Index (PMI) for April was 59.7, exceeding the forecast of 58.2. The Services PMI came in lower than forecast at 54.7 compared to the expected 58.0.

The US Dollar Index DXY ) hit another recent high, rising by +0.49% today. The US 30Y Treasury Yield rose today while the 10y and 2y yields declined slightly. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate bond prices declined. Silver and Gold prices both declined sharply as the USD dollar rose and scared off investors from the safe-haven metals. Brent Oil dipped to near $105 a barrel.

The put/call ratio ( PCCE ) is up above 1.0, ending the day at 1.11. The CNN Fear & Greed index fell back into the Fear range. The NAAIM Money Manager Exposure index (measured on Wednesdays) rose to 74.05 after dropping to 63.29 last week.

All big six mega-caps declined. Alphabet GOOG ) fell the most, declining by -4.26% today. Tesla TSLA ) held up the best, declining only -0.37%.

Only one mega-cap gained. Alibaba (BABA) ended the day with a +0.58% advance. The worst mega-cap was Verizon ( VZ ) which declined by -5.64% and helped lead the rest of the market lower with a disappointing outlook during its earnings report this morning.

Twitter TWTR ) topped the Daily Update Growth List with a +3.93% gain. Other gainers on the list were mostly Chinese stocks. Chewy CHWY ) was at the bottom of the list, declining by -6.76% today.

Looking ahead

Coca-Cola (KO), Activision Blizzard ATVI ), and Whirlpool WHR ) are a few of the earnings reports to kick off a huge earnings calendar for the week. The remaining five of the big six mega-caps report next week along with several other reports that will be closely watched for outlook more important than results.

Trends, Support, and Resistance

The Nasdaq just briefly picked up support at 13,000 before diving lower today.

If the index returns to the trend line from the 3/29 high, that would meet up with the five-day trend line for a +1.29% gain on Monday.

The one-day trend line points to a continued sell-off and a decline of -2.23% to start the week.

Wrap-up

As a 50-basis point interest rate hike is nearly certain at this point, the good news is that the Fed (other than Bullard) are not entertaining a massive 75-basis point hike which hasn’t happened since the 1990s.

Take a breather this weekend. We all deserve one.

Stay healthy and trade safe!

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