Daily Market Update for 2/18
Summary: Worries over Ukraine caused another day of losses to cap a volatile week.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Friday, February 18, 2022
Facts: -1.23%, Volume higher, Closing Range: 28%, Body: 63% Red
Good: Nothing
Bad: Lower higher, lower low, lower close all on higher volume
Highs/Lows: Lower high, Lower low
Candle: Large red body, longer lower wick, low closing range
Advance/Decline: 0.54, almost two declining stocks for every advancing
Indexes: SPX (-0.72%), DJI (-0.68%), RUT (-0.92%), VIX (-1.28%)
Sector List: Consumer Staples (XLP +0.18%) and Financials (XLF -0.03%) at the top. Industrials (XLI -0.83%) and Technology (XLK -1.01%) at the bottom.
Expectation: Lower
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Market Overview
Worries over Ukraine caused another day of losses to cap a volatile week.
The Nasdaq closed lower by -1.23%. Volume was higher than the previous day. The longer lower wick formed in the morning before the index bounced off intraday lows. A failed rally in the afternoon left behind a 63% red body and a 28% closing range. There were almost two declining stocks for every stock that advanced.
The S&P 500 (SPX) declined by -0.72%, and the Dow Jones Industrial Average (DJI) fell by -0.68%. The Russell 2000 (RUT) dropped -0.92%. Despite the declines in the major indexes, the VIX Volatility Index closed lower by -1.28%. Today's volatility was less than the previous day that saw significant losses across the market.
Only two of the eleven S&P 500 sectors gained for the day, with the top sector being a safe haven. Consumer Staples (XLP +0.18%) and Financials (XLF -0.03%) were the two gaining sectors. Industrials (XLI -0.83%) and Technology (XLK -1.01%) had the most significant losses.
Existing Home Sales for January were higher than expected. 6.5 million homes sold compared to the forecast of 6.1 million. As expected, the Fed's John Williams was much more optimistic about inflation than officials who spoke earlier in the week.
The US Dollar index (DXY) rose by +0.32%. US Treasury Yields all declined as investors poured into the safer instruments. The yield curve is flattening again as the short-term outlook sours against the backdrop of the Ukraine conflict. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices followed Treasury prices higher (yield down, prices up). Gold remained at recent highs.
The put/call ratio (PCCE) topped 1.0 again, ending the day at 1.05. The CNN Fear & Greed index remained in the Fear range. The put/call component of the CNN index is broken and, if working, would probably put the overall index near or within Extreme Fear. The NAAIM Money Manager Exposure Index dropped to 53.49 from 66.8 the previous week.
All big six mega-caps declined today. Nvidia (NVDA) dropped -3.53%, getting support at its 200d moving average. Besides Nvidia, only Tesla (TSLA) remains above its 200d MA despite a -2.21% decline today.
Cisco Systems (CSCO) was the top mega-cap for the day, gaining +2.58% on further momentum after its earnings report earlier this week. Alibaba (BABA) was at the bottom of the mega-cap list with a -4.37% loss.
Only two stocks in the Daily Update Growth List, Netflix (NFLX) and D.R. Horton (DHI) gained for the day. Netflix gained +1.19% while D.R Horton advanced +0.83%. Draft Kings (DKNG) and Roku (ROKU) were at the bottom of the list, declining more than -20% after disappointing investors with guidance outlook in their earnings releases.
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Looking ahead
U.S. Markets will be closed on Monday for President's Day.
Tuesday will kick off with February Manufacturing and Service Purchasing Managers Index data just after the market opens. Shortly after that, the CB Consumer Confidence numbers for February will be available.
Berkshire Hathaway (BRKa) will be the big earnings report to start the week. Also reporting on Tuesday will be Home Depot (HD), MercadoLibre (MELI), Nu Holdings (NU), Teladoc (TDOC), and Virgin Galactic (SPCE).
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Trends, Support, and Resistance
The Nasdaq moved lower, not showing much support at any levels yet.
If the index returns to the five-day trend line and the trend line from the 2/10 high, we can expect a +0.44% gain for Tuesday.
If the one-day trend line continues, expect another -0.71% decline.
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Wrap-up
Right now, we are almost entirely dependent on the outcome of the Ukraine conflict. Certainly, investors did not want to hold riskier assets over a three-day weekend with the tensions still elevated.
The expectation for Tuesday is lower.
Stay healthy and trade safe!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Friday, February 18, 2022
Facts: -1.23%, Volume higher, Closing Range: 28%, Body: 63% Red
Good: Nothing
Bad: Lower higher, lower low, lower close all on higher volume
Highs/Lows: Lower high, Lower low
Candle: Large red body, longer lower wick, low closing range
Advance/Decline: 0.54, almost two declining stocks for every advancing
Indexes: SPX (-0.72%), DJI (-0.68%), RUT (-0.92%), VIX (-1.28%)
Sector List: Consumer Staples (XLP +0.18%) and Financials (XLF -0.03%) at the top. Industrials (XLI -0.83%) and Technology (XLK -1.01%) at the bottom.
Expectation: Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Worries over Ukraine caused another day of losses to cap a volatile week.
The Nasdaq closed lower by -1.23%. Volume was higher than the previous day. The longer lower wick formed in the morning before the index bounced off intraday lows. A failed rally in the afternoon left behind a 63% red body and a 28% closing range. There were almost two declining stocks for every stock that advanced.
The S&P 500 (SPX) declined by -0.72%, and the Dow Jones Industrial Average (DJI) fell by -0.68%. The Russell 2000 (RUT) dropped -0.92%. Despite the declines in the major indexes, the VIX Volatility Index closed lower by -1.28%. Today's volatility was less than the previous day that saw significant losses across the market.
Only two of the eleven S&P 500 sectors gained for the day, with the top sector being a safe haven. Consumer Staples (XLP +0.18%) and Financials (XLF -0.03%) were the two gaining sectors. Industrials (XLI -0.83%) and Technology (XLK -1.01%) had the most significant losses.
Existing Home Sales for January were higher than expected. 6.5 million homes sold compared to the forecast of 6.1 million. As expected, the Fed's John Williams was much more optimistic about inflation than officials who spoke earlier in the week.
The US Dollar index (DXY) rose by +0.32%. US Treasury Yields all declined as investors poured into the safer instruments. The yield curve is flattening again as the short-term outlook sours against the backdrop of the Ukraine conflict. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices followed Treasury prices higher (yield down, prices up). Gold remained at recent highs.
The put/call ratio (PCCE) topped 1.0 again, ending the day at 1.05. The CNN Fear & Greed index remained in the Fear range. The put/call component of the CNN index is broken and, if working, would probably put the overall index near or within Extreme Fear. The NAAIM Money Manager Exposure Index dropped to 53.49 from 66.8 the previous week.
All big six mega-caps declined today. Nvidia (NVDA) dropped -3.53%, getting support at its 200d moving average. Besides Nvidia, only Tesla (TSLA) remains above its 200d MA despite a -2.21% decline today.
Cisco Systems (CSCO) was the top mega-cap for the day, gaining +2.58% on further momentum after its earnings report earlier this week. Alibaba (BABA) was at the bottom of the mega-cap list with a -4.37% loss.
Only two stocks in the Daily Update Growth List, Netflix (NFLX) and D.R. Horton (DHI) gained for the day. Netflix gained +1.19% while D.R Horton advanced +0.83%. Draft Kings (DKNG) and Roku (ROKU) were at the bottom of the list, declining more than -20% after disappointing investors with guidance outlook in their earnings releases.
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Looking ahead
U.S. Markets will be closed on Monday for President's Day.
Tuesday will kick off with February Manufacturing and Service Purchasing Managers Index data just after the market opens. Shortly after that, the CB Consumer Confidence numbers for February will be available.
Berkshire Hathaway (BRKa) will be the big earnings report to start the week. Also reporting on Tuesday will be Home Depot (HD), MercadoLibre (MELI), Nu Holdings (NU), Teladoc (TDOC), and Virgin Galactic (SPCE).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq moved lower, not showing much support at any levels yet.
If the index returns to the five-day trend line and the trend line from the 2/10 high, we can expect a +0.44% gain for Tuesday.
If the one-day trend line continues, expect another -0.71% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Right now, we are almost entirely dependent on the outcome of the Ukraine conflict. Certainly, investors did not want to hold riskier assets over a three-day weekend with the tensions still elevated.
The expectation for Tuesday is lower.
Stay healthy and trade safe!
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