Daily Market Update for 6/30

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 30, 2022

Facts: -1.33%, Volume higher, Closing Range: 57%, Body: 6% Red
Good: Closing range above 50%
Bad: Lower high, lower low, lower close, on higher volume
Highs/Lows: Lower high, Lower low
Candle:Spinning top candle signals indecision
Advance/Decline: 0.57, almost two declining for every advancing stock
Indexes:SPX (-0.88%), DJI (-0.82%), RUT (-0.66%), VIX (+1.95%)
Sector List: Utilities ( XLU +1.11%) and Industrials XLI +0.31%) at the top. Consumer Discretionary ( XLY -1.47%) and Energy ( XLE -2.11%) at the bottom.

Market Overview

Markets closed the worst first semester in over 50 years with another decline, falling on concerns over economic growth and corporate debt concerns.

The Nasdaq finished lower by -1.33%. Volume was slightly higher than the previous day. The candle has a thin red body in between a long upper wick and an even longer lower wick. The candle is a spinning top that signals indecision in the market. The lower wick came during a sell-off just after the market opened. The index recovered , but not enough to regain all the losses. There were nearly two declining stocks for every advancing stock.

The S&P 500 (SPX) declined by -0.88%. The Dow Jones Industrial Average (DJI) fell by -0.82%. The Russell 2000 (RUT) lost -0.66%. The VIXVolatility index rose by +1.95%.

Four of the eleven S&P sectors gained mostly defensive sectors. Utilities ( XLU +1.11%) and Industrials XLI +0.31%) were the best two sectors. Consumer Discretionary ( XLY -1.47%) and Energy ( XLE -2.11%) were at the bottom of the list.

Core PCE Price Index data grew 4.7% year-over-year and 0.3% month-over-month. That was less than the expected 4.8% and 0.4%. Personal Spending (MoM) grew by only 0.2% compared to an expectation of 0.4% and the Chicago Purchasing Managers Index also fell short, registering at 56.0 instead of the expected 58.0. So inflation may be tapering, but spending is also cooling.

The US Dollar Index DXY ) fell by -0.34%. US 30y, 10y, and 2y Treasuries all declined. High Yield ( HYG ) Corporate Bonds continue to diverge from Treasury bond prices, signaling the concern over corporate debt. Investment Grade ( LQD ) Corporate Bond prices are tracking along with Treasuries. Brent Oil dropped to $108.42 a barrel.

The put/call ratio ( PCCE ) dropped to 0.996. The CNN Fear & Greed index is in Extreme Fear. The NAAIM money manager exposure index rose to 30.66 from 19.86 the previous week.

Looking ahead

ISM Manufacturing data will be released in the morning after the market opens, giving a heads up on economic demand.

Trends, Support, and Resistance

The Nasdaq almost 3% after the market opened but regained some of the losses, resulting in an intra-day trend line that slopes upward.

If the index returns to the trend line from the 6/16 low, that would require a +3.31% gain for Friday.

The one-day trend line points to a +1.82% gain.

The five-day trend line ends with a -1.51% decline.

Wrap-up

It was a choppy session as investors close out the first half of the year. Economic data in the morning didn’t help paint a solid picture for economic direction and investors sided on the fear side, selling growth and buying defensive stocks.

Let’s hope for a better second half of the year.

Stay healthy and trade safe!

Comments

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