Daily Market Update for 6/6

Original Chart

Notes

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

Monday, June 6, 2022

Facts: +0.40%, Volume higher, Closing Range: 24%, Body: 58% Red
Good: Held above the 21d EMA , volume higher on advance
Bad: Lost early morning rally, low closing range
Highs/Lows: Higher high, Higher low
Candle: Large red body in center of equal upper and lower wicks
Advance/Decline: 0.72, more declining than advancing stocks
Indexes:SPX (+0.31%), DJI (+0.05%), RUT (+0.36%), VIX (+1.13%)
Sector List: Consumer Discretionary ( XLY +1.00%) and Materials ( XLB +0.95%) at the top. Energy ( XLE -0.11%) and Real Estate ( XLRE -0.30%) at the bottom.

Market Overview

Indexes faded from an early morning rally as bond yields rose sharply. Chinese stocks rose on optimism after the Chinese government said they would conclude an investigation into Didi later this week.

The Nasdaq rose by +0.40%, but couldn’t hold onto the 2% early-morning gain. Volume was higher than the previous day and the index had a higher low and higher high. The 58% red body sits in the middle of the candle with short upper and lower wicks, ending with a dismal 24% closing range. There were more declining stocks than advancing stocks.

The Russell 2000 (RUT) gained +0.36%. The S&P 500 (SPX) moved by +0.31% higher. The Dow Jones Industrial Average (DJI) narrowly escaped a loss, gaining only +0.05% today. The VIXVolatility Index ended the day +1.13% higher.

Nine of the eleven S&P 500 sectors gained. Consumer Discretionary ( XLY +1.00%) and Materials ( XLB +0.95%) had the best results. Energy ( XLE -0.11%) and Real Estate ( XLRE -0.30%) were the two losing sectors.

US 30y, 10y, and 2y Yields all rose sharply as investors anticipate interest rate hikes. That pulled the US Dollar higher as well. The US Dollar Index DXY ) ended the day with a +0.24% gain. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices moved lower tracking along with treasury prices. Brent Oil fell back below $120 a barrel.

The put/call ratio ended the day lower at 0.840. The CNN Fear & Greed Index remained close to Extreme Fear, but in the Fear region.

Five of the big six mega-caps held onto gains. Microsoft MSFT ) was the only one to decline for the day, falling by -0.47% and closing just a smidge below its 21d EMA . Alphabet GOOGL ) closed with the best gain, climbing by +2.14% for the day.

Alibaba (BABA) topped the broader mega-cap list, outperforming along with other Chinese stocks. The stock gained +6.22% today. AstraZeneca ( AZN ) was at the bottom of the mega-cap list, falling by -3.32% today.

Two Chinese Fintech stocks topped the Daily Update Growth List. FUTU Holdings and UP Fintech gained +18.56% and +17.44% respectively. Chewy CHWY ) was at the bottom of the list, dropping by -3.61% as it gives back some of the massive 25% post-earnings gain last week.

Looking ahead

Tomorrow morning will bring Exports, Imports, and Trade Balance data for April. The EIA Short-Term Energy Outlook will be published at mid-day. API Weekly Crude Oil Stock numbers come out after the market closes.

Trends, Support, and Resistance

The index started the day with a rally, but then faded through the rest of the day. It still closed above the 21d EMA .

If the index returns to the trend line from the 5/20 low, that would mean a +3.10% advance for Tuesday.

If it continues along the five-day trend line , then we can expect a +0.29% gain.

The one-day trend line points to a -1.79% decline.

Wrap-up

Indexes looked poised to start the week with an aggressive rally, but energy faded quickly as Treasury yields soared. The market is waiting for Wednesday’s inflation data to determine how hawkish the Fed will be beyond next week’s expected 50 bps hike.

Stay healthy and trade safe!

Comments

If you find this helpful or have comments, please reply and like at

https://www.tradingview.com/chart/IXIC/GEO4mNWS-Daily-Market-Update-for-6-6/