Daily Market Update for 6/29

Original Chart

Notes

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

Wednesday, June 29, 2022

Facts: -0.03%, Volume higher, Closing Range: 69%, Body: 11% Green
Good: Closing range above 40%
Bad: A/D ratio, lower high and low
Highs/Lows: Lower high, Lower low
Candle: On neck candle where close is near a previous day which was long red (continuation candle)
Advance/Decline: 0.42, more than two declining stocks for every advancing stock
Indexes:SPX (-0.07%), DJI (+0.27%), RUT (-1.12%), VIX (-0.71%)
Sector List: Health ( XLV +0.87%) and Consumer Staples ( XLP +0.63%) at the top. Materials ( XLB -0.72%) and Energy ( XLE -3.48%) at the bottom.

Market Overview

GDP for Q1 was revised lower while investors are trying to calculate what possible moves the Fed will make to combat a recession.

The Nasdaq declined by -0.03%. Volume was higher than the previous day. The on-neck candle has a thin green body that opens and closes near yesterday’s close, signaling a continuation in a downtrend. The continuation will be confirmed if tomorrow’s low breaks today’s low. The closing range of 69% comes above a longer lower wick which formed right at the open of the market. There were more than two declining stocks for every advancing stock.

The Dow Jones Industrial Average (DJI) held onto gains for the day, rising by +0.27%. The S&P 500 (SPX) fell by only -0.07% while the Russell 2000 (RUT) declined by -1.12%. The VIXVolatility Index declined by -0.71%.

Five of the eleven S&P 500 sectors gained. Health ( XLV +0.87%) and Consumer Staples ( XLP +0.63%) led the gaining sectors. Materials ( XLB -0.72%) and Energy ( XLE -3.48%) had the biggest losses for the day. Energy followed Brent Oil prices lower.

GDP growth for Q1 was revised to -1.6% compared to the previous calculation of -1.5%. GDP Price Index Data was also revised, rising to 8.3% from the previous measure of 8.1%.

The US Dollar Index DXY ) rose by +0.59%. US 30y, 10y, and 2y Treasury Yields all moved lower. High Yield ( HYG ) Corporate Bond prices declined while Investment Grade ( LQD ) Corporate Bond prices rose. Brent Oil prices declined by -1.63% to $111.69 a barrel.

The put/call ratio ( PCCE ) rose to 1.26. The CNN Fear & Greed index moved back into the Extreme Fear range.

Four of the big six mega-caps gained today. Meta ( FB ) had the biggest gain of the six, advancing by +2.03%. Tesla TSLA ) and Alphabet GOOGL ) declined by -1.79% and -0.28% respectively.

Meta was the top gainer in the broader mega-cap list as well. The biggest loser in the list was Exxon Mobil XOM ), which declined by -3.69%.

Digital Turbine (APPS) received some positive reviews from analysts, helping it top the Daily Update Growth List by gaining +5.76%. At the bottom of the list was Lemonade LMND ) which lost -7.28% today.

Looking ahead

Our next look at inflation comes in the morning with the release of the PCE Price Index and Personal Spending data for May. We will also get the weekly Initial Jobless Claims. The Chicago Purchasing Managers Index for Jun will be released after the market opens.

Trends, Support, and Resistance

The Nasdaq dipped after the open but then recovered and traded in a tight range the rest of the day, closing near yesterday’s close.

If the index returns to the trend line from the 6/16 low, that would mean a +3.28% advance.

The five-day trend line points to a +0.88% gain for Thursday.

The one-day trend line is flat and points to a +0.2% gain for tomorrow.

Wrap-up

The market continues to show uncertainty over future economic growth. More companies are beginning to scale back labor and purchases, adding more worries to the list. That’s all bad news, but now it also has some analysts predicting a 2023 rate cut from the Fed to fight against recession. Although Treasury bond prices rose, Corporate junk bond prices declined, signaling a move to safe-havens.

Stay healthy and trade safe!

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