Daily Market Update for 6/17

Original Chart

Notes

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

Friday, June 17, 2022

Facts: +1.43%, Volume higher, Closing Range: 65%, Body: 41% Green
Good: Gain on higher volume , closing range good
Bad: A/D ratio, long upper wick
Highs/Lows: Higher high, Higher low
Candle: Small body under a longer upper wick, short lower wick
Advance/Decline: 0.32, three declining for every advancing stock.
Indexes:SPX (+0.22%), DJI (-0.13%), RUT (+0.96%), VIX (-5.52%)
Sector List: Communications ( XLC +1.43%) and Consumer Discretionary ( XLY +1.09%) at the top. Utilities ( XLU -0.93%) and Energy ( XLE -5.47%) at the bottom.

Market Overview

Big tech and growth stocks recovered some of the heavy losses from Thursday’s selling. The bounce comes at the end of one of the worst weeks in the market since the start of the pandemic.

The Nasdaq rose by +1.43%. Volume was at its highest since March. The rally reached the intraday high and then subdued, leaving behind a longer upper wick and a 65% closing range over a 41% green body. The gains were not broadly shared. For every advancing stock, there were three declining stocks.

The Russell 2000 (RUT) gained +0.96%. The S&P 500 (SPX) climbed by just +0.22% and the Dow Jones Industrial Average (DJI) declined by -0.13%. The VIXVolatility Index fell by -5.52% but remains elevated.

Only five of the S&P 500 sectors gained. Communications ( XLC +1.43%) and Consumer Discretionary ( XLY +1.09%) were the top gainers, while Utilities ( XLU -0.93%) and Energy ( XLE -5.47%) had the biggest declines.

Industrial Production for May grew by only 0.2% compared to the expectation of 0.4%.

The US Dollar strengthened with the index ( DXY ) rising by +0.82%. US30y , 10y, and 2y Treasury Yields all rose. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices rose. Brent Oil fell sharply to $111.43 a barrel. The fall in oil prices sent the Energy ( XLE ) sector lower. Timber, Copper , and Aluminum were all lower for the day.

The put/call ratio rose to 1.24, another high reading at the close. The CNN Fear & Greed Index is in Extreme Fear. The NAAIM Money Manager Index fell to 32.18 from 50 last week.

All of the big six mega-caps gained Friday. Amazon ( AMZN ) gained +2.47% for the day, beating the other five. Microsoft MSFT ) had the smallest gain but still rose by +1.09%.

The big six topped the broader mega-cap list along with Nvidia NVDA ) which gained by +1.79% today. At the bottom of the mega-cap list were Chevron CVX ) and Exxon Mobil XOM ) which fell by -4.57% and -5.77%.

Growth stocks did well today. The Daily Update Growth List has only three declining stocks. The biggest gain was by Enphase ( ENPH ) which rose by +8.94%. Just behind it was another new energy stock, Solar Edge ( SEDG ) which climbed by +8.44%. UP Fintech ( TIGR ) was at the bottom of the list, declining by -4.03%.

Looking ahead

Markets will be closed on Monday for the Juneteenth holiday.

On Tuesday morning, we will get the Existing Home Sales data for May.

Trends, Support, and Resistance

The Nasdaq opened with a whipsaw action in the morning before climbing to the intraday high in the early afternoon.

If the one-day trend line continues into Tuesday, we can expect a +1.35%.

If the index returns to the five-day trend line , that would mean a -0.75% decline.

A return to the trend line from the 6/2 high would mean a -4.19% decline to start the short week.

Wrap-up

The gain on high volume is positive for the Nasdaq, but it was confined to a small percentage of stocks in the index. We need those gains to be shared more broadly across the index to build support for further improvements.

Stay healthy and trade safe!

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