Daily Market Update for 6/13

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 13, 2022

Facts: -4.68%, Volume lower, Closing Range: 12%, Body: 60% Red
Good: Nothing
Bad: Everything
Highs/Lows: Lower high, Lower low
Candle: Gap down leads to thick red body and small tiny wick with low closing range
Advance/Decline: 0.09, more than eleven stocks decline for every advancing stock
Indexes:SPX (-3.88%), DJI (-2.79%), RUT (-4.76%), VIX (+22.59%)
Sector List: Consumer Staples ( XLP -2.16%) and Financials ( XLF -2.98%) at the top. Real Estate ( XLRE -4.81%) and Energy ( XLE -5.22%) at the bottom.

Market Overview

Markets capitulated in grandiose style with eleven stocks declining for every advancing stock on the Nasdaq. Both stock and bond prices dropped sharply as worries about inflation grew.

The Nasdaq fell by -4.68% on higher volume than the previous trading day. The index opened with a gap-down for the second day and proceeded to sell off creating a thick red body with a short lower wick. The 60% red body is below a short upper wick created just after the opening. A tiny lower wick was left after a 12% closing range. There were more than eleven stocks that declined for every advancing stock.

The Russell 2000 (RUT) did even worse, declining by -4.76%. Both the Nasdaq and the Russell 2000 are more than 30% lower than their all-time-highs. The S&P 500 (SPX) entered a bear market with a -3.88% decline today. The Dow Jones Industrial Average (DJI) fell by -2.79%. The VIXVolatility Index soared by +22.59%.

All eleven S&P 500 sectors declined. Consumer Staples ( XLP -2.16%) and Financials ( XLF -2.98%) were the best performing but still declined by more than 2%. Real Estate ( XLRE -4.81%) and Energy ( XLE -5.22%) were at the bottom of the list.

The US Dollar Index DXY ) made a new high, rising by +0.97% today. US 30y, 10y, and 2y Treasury Yields rose sharply as bonds sold off. The yield curve inverted once again, reflecting the poor outlook analysts have for the near-term economy. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices dumped as well and the gap between junk bonds and treasury bonds grew to its widest since 2020.

The put/call ratio rose to 1.36. That’s the highest closing level since March of 2020. The CNN Fear & Greed index moved back into Extreme Fear.

All big six mega-caps fell. Tesla TSLA ) had the biggest loss, declining by -7.10%. Apple AAPL ) held up the best but still lost by -3.83%.

None of the stocks in the broader mega-cap list gained. Coca-cola (KO) performed the best, declining only -0.11%. Alibaba (BABA) was the biggest loser, declining by -10.31% to land at the bottom of the list.

Beyond Meat BYND ) topped the Daily Update Growth List, but still declined by -2.58%. Only five stocks on the list declined less than 5%. DraftKings DKNG ) had the biggest loss, declining by -15.80%.

Looking ahead

We’ll get Producer Price Index data tomorrow which is a forward-looking measure of inflation . Producers pass higher prices along to consumers.

API Weekly Crude Oil stock comes in the afternoon.

Trends, Support, and Resistance

The Nasdaq dropped below 11,000 early in the session and continued lower. This is the first close below 11,000 since October 2020.

If the index returns to the downward regression trend line from the 6/2 high, that would require a +1.97% advance for tomorrow.

The one-day trend line points to a -0.67% decline.

Following the five-day trend line , would result in a -1.61% decline for Tuesday.

Wrap-up

Ouch.

Stay healthy and trade safe!

Comments

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