Daily Market Update for 6/9

Original Chart

Notes

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

Thursday, June 9, 2022

Facts: -2.75%, Volume higher, Closing Range: 1%, Body: 72% Red
Good: Nothing
Bad: Broad declines on higher volume , low closing range
Highs/Lows: Lower high, Lower low
Candle: Large red body under a medium upper wick
Advance/Decline: 0.25, four declining stocks for every advancing stock
Indexes:SPX (-2.38%), DJI (-1.94%), RUT (-2.12%), VIX (+8.89%)
Sector List: Consumer Staples ( XLP -1.50%) and Consumer Discretionary ( XLY -1.81%) at the top. Technology ( XLK -2.67%) and Communications ( XLC -3.07%) at the bottom.

Market Overview

Sellers took charge again as investor fears over inflation took hold ahead of the Consumer Price Index data due on Friday.

The Nasdaq fell by -2.75%, dropping below a channel that formed over the previous eight days. Volume was higher than the previous day. The 72% red body sits under an upper wick that formed in the early morning. The closing range of 1% came as selling accelerated in the late afternoon. There were four declining stocks for every advancing stock.

The S&P 500 (SPX) declined by -2.38%. The Russell 2000 (RUT) lost -2.12%. The Dow Jones Industrial Average (DJI) fell by -1.94%. The VIXVolatility Index ( VIX ) rose by +8.89%.

All eleven S&P 500 sectors declined. Consumer Staples ( XLP -1.50%) and Consumer Discretionary ( XLY -1.81%) had the smallest declines. Technology ( XLK -2.67%) and Communications ( XLC -3.07%) were the worst performers.

The weekly Initial Jobless Claims rose to 229,000 compared to the expected 210,000.

The US Dollar Index DXY ) rose by +0.74%. The US 30y Treasury Yield declined while the 10y and 2y yields rose. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices declined. Timber (WOOD) declined sharply on Thursday.

The put/call ratio ( PCCE ) rose to 0.823. The CNN Fear & Greed index moved back toward Extreme Fear but is still in the Fear range. The NAAIM money manager exposure index rose to 50 from 34.3 the previous week.

All big six mega-caps declined and all closed back below their 21d EMA . Meta ( FB ) had the biggest decline, falling by -6.43%. Tesla TSLA ) dropped by only -0.89% but lost gains from an early morning rally.

Only two mega-caps in the broader list had gains today. Costco (COST) and Home Depot (HD) advanced by +0.87% and +0.78%, respectively. After topping the list for several days in the past week, Alibaba (BABA) dropped to the bottom of the list, declining by -8.13% today.

Looking ahead

The Daily Update Growth List also had only two gaining stocks. Chewy CHWY ) topped the list with a +2.62% gain. The biggest loser on the list was Block ( SQ ), which declined by -9.64%.

Consumer Price Index data arrives in the morning before the market opens. After trading starts, the Michigan Consumer Sentiment, and Consumer Expectations data will be released.

Trends, Support, and Resistance

Just as I set a new support area at 12,000 on the chart, the Nasdaq fell below the line today breaking lower from an eight-day tight trading range. The index moved below the 12,000 area and closed below the 21d EMA .

If the index is to return to the trend line from the 5/20 low, that would require a +5.37% gain which is not likely.

If we can get back to the five-day trend line , that would mean a +2.32% gain.

If the one-day trend line continues into Friday, that would result in a -1.59%.

Wrap-up

All we can do now is wait for the CPI data for May. It could be investors priced in the bad news today because of the inflation warning from the ECB. If the data is higher than expected, we can expect more downward movement.

Stay healthy and trade safe!

Comments

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