Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
Thursday, July 7, 2022
Facts: +2.28%, Volume lower, Closing Range: 90%, Body: 86% Green
Good: Price rally all-day, high closing range, advance/decline ratio
Bad: Lower volume
Highs/Lows: Higher high, Higher low
Candle: Mostly green body, tiny upper and lower wicks.
Advance/Decline: 2.21, more than two advancing stocks for every declining stock
Indexes:SPX (+1.50%), DJI (+1.12%), RUT (+2.43%), VIX (-2.43%)
Sector List: Energy ( XLE +3.61%) and Consumer Discretionary ( XLY +2.58%) at the top. Real Estate ( XLRE +0.07%) and Utilities ( XLU -0.10%) at the bottom.
Markets had a fourth day of gains for July, starting off the month green as analysts continue to judge if and when a recession will hit. Wells Fargo says the recession is already here.
The Nasdaq climbed by +2.28% but on lower volume than the previous day. The 86% green body is in between two tiny wicks as the index closed the day with a 90% closing range. Prices rose throughout the day. There were more than two advancing stocks for every declining stock.
Weekly Initial Jobless Claims were at 235,000, slightly worse than the consensus forecast of 230,000. The Trade Balance for May was at -85.50 billion, worse than the expected -84.90 billion. Crude Oil Inventories were much higher than expected, with 8.2 million barrels of excess for the week compared to the expectation for a -1 million-barrel shortfall.
The US Dollar index ( DXY ) held its current level, declining by only -0.01% today. US 30y, 10y, and 2y Treasury Yields rose for a second day. High Yield ( HYG ) Corporate Bond prices advanced, narrowing the gap with short-term treasuries. Investment Grade ( LQD ) Corporate Bond prices were flat for the day. Brent Oil rose back above $100 a barrel.
Tomorrow is the monthly employment data Friday. Nonfarm Payrolls and the Unemployment Rate are top indicators of the health of the labor market. The data will be released before the market opens.
Trends, Support, and Resistance
The Nasdaq rose throughout the day to close just below the 50d MA.
If the index returns to the trend line from the 6/16 low, that would mean a -1.80% decline for Friday.
Investors are likely looking for mediocre to worse labor market data for Friday. Worse-than-expected employment data could mean a more dovish fed in 2023 which is what institutions are pricing into the market now.
Stay healthy and trade safe!
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