Daily Market Update for 6/16
Summary: The Fed has spoken. The market came to life after the Fed pulled forward projected dates for interest rate hikes into 2023. As a result, the US Dollar spiked about 1%, long-term Treasury yields rose, and equities dropped. Equities found support after the initial reaction but couldn't quite recover all the losses.
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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Wednesday, June 16, 2021
Facts: -0.24%, Volume higher, Closing range: 60%, Body: 20%
Good: Bounce off low in the afternoon to close back above 14,000
Bad: Big dip after fed news
Highs/Lows: Lower high, lower low
Candle: Slim red body in the upper half of a long candle. Long lower wick.
Advanced/Decline: 0.56, Almost two declining stocks for every advancing stock
Indexes: SPX (-0.54%), DJI (-0.77%), RUT (-0.23%), VIX (+6.64%)
Sectors: Consumer Discretionary (XLY +0.05%) and Financials (XLF -0.11%) were top. Consumer Staples (XLP -1.33%) and Utilities (XLU -1.50%) were bottom.
Expectation: Sideways or Lower
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Market Overview
The Fed has spoken. The market came to life after the Fed pulled forward projected dates for interest rate hikes into 2023. As a result, the US Dollar spiked about 1%, long-term Treasury yields rose, and equities dropped. Equities found support after the initial reaction but couldn't quite recover all the losses.
The Nasdaq closed the day with a -0.24% decline. That was better than the -1.20% intraday dip. Volume was higher than the previous day. The candle has a long lower wick underneath a 20% body in the upper half of the candle. The closing range of 60% provides some positive ending to a day that ended in a loss. There were almost two declining stocks for every advancing stock.
The Russell 2000 (RUT) declined -0.23%. The S&P 500 (SPX) slid -0.54%. The Dow Jones Industrial Average (DJI) fell -0.77%.
The VIX volatility index rose +6.64%.
Consumer Discretionary (XLY +0.05%) was the only sector to have a gain for the day. Financials (XLF -0.11%) was the next best performer. Consumer Staples (XLP -1.33%) and Utilities (XLU -1.50%) were at the bottom of the sector list.
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Economic Indicators
The US Dollar (DXY) rose +0.98%.
The US 30y, 10y, and 2y Treasury yields all advanced. Shorter-term Treasuries sold off more than longer-term bonds, flattening the yield curve.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -4.52%. Ethereum (ETHUSD) declined -7.00%.
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Investor Sentiment
The put/call ratio rose to 0.677. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved to the fear side of neutral.
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Market Leaders
Amazon (AMZN) was able to close with a +0.95% gain today. Apple (AAPL) dipped below its 50 MA but was able to close above the line with a decline of -0.39% today. Microsoft (MSFT) and Alphabet (GOOGL) lost -0.38% and -0.53%.
Amazon, Tesla (TSLA), Toyota Motor (TM ), and JP Morgan Chase (JPM) topped the mega-cap list today. Most mega-caps declined for the day. Visa (V), Facebook (FB), Walmart (WMT), and Oracle (ORCL) were at the bottom of the list. Oracle declined 7% after disappointing investors with their current FY guidance. It recovered a bit before close, ending the day with a -5.59% loss.
The daily update growth stock list was a mix of winners and losers today. Enphase (ENPH), Chewy (CHWY), MongoDB, and Solar Edge (SEDG) were the top gainers. At the bottom of the list were Facebook (FB), Ehang Holdings (EH), SNAP (SNAP), and FUTU Holdings (FUTU).
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Looking ahead
Initial Jobless Claims data is expected to continue to improve on Thursday. The Philadelphia Fed Manufacturing Index will also be released before the market opens.
Adobe (ADBE), Kroger (KR), and Jabil (JBL) release earnings on Thursday. The Jabil report will be before the market opens.
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Trends, Support, and Resistance
The index dipped below the 14,000 support area but quickly recovered to close back above the area.
The trend-line from the 5/12 low points to a +1.08% advance for Thursday.
The five-day trend-line ends with a +0.55% gain.
The one-day trend-line points to a -1.05% decline for tomorrow.
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Wrap-up
It's hard to tell where investors are heading with the Fed news today. The infamous dot plots show more officials leaning toward 2023 interest rate hikes. And yet, the Fed reiterated its stance that it would wait until there was substantial further progress before introducing changes.
The initial reaction was a sudden dip in the indexes, but then the prices recovered, heading into the close. Based on the Nasdaq chart, I've got an expectation for sideways or lower tomorrow. The long lower wick suggests a possibility for higher. But let's be honest. Who knows.
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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Wednesday, June 16, 2021
Facts: -0.24%, Volume higher, Closing range: 60%, Body: 20%
Good: Bounce off low in the afternoon to close back above 14,000
Bad: Big dip after fed news
Highs/Lows: Lower high, lower low
Candle: Slim red body in the upper half of a long candle. Long lower wick.
Advanced/Decline: 0.56, Almost two declining stocks for every advancing stock
Indexes: SPX (-0.54%), DJI (-0.77%), RUT (-0.23%), VIX (+6.64%)
Sectors: Consumer Discretionary (XLY +0.05%) and Financials (XLF -0.11%) were top. Consumer Staples (XLP -1.33%) and Utilities (XLU -1.50%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Fed has spoken. The market came to life after the Fed pulled forward projected dates for interest rate hikes into 2023. As a result, the US Dollar spiked about 1%, long-term Treasury yields rose, and equities dropped. Equities found support after the initial reaction but couldn't quite recover all the losses.
The Nasdaq closed the day with a -0.24% decline. That was better than the -1.20% intraday dip. Volume was higher than the previous day. The candle has a long lower wick underneath a 20% body in the upper half of the candle. The closing range of 60% provides some positive ending to a day that ended in a loss. There were almost two declining stocks for every advancing stock.
The Russell 2000 (RUT) declined -0.23%. The S&P 500 (SPX) slid -0.54%. The Dow Jones Industrial Average (DJI) fell -0.77%.
The VIX volatility index rose +6.64%.
Consumer Discretionary (XLY +0.05%) was the only sector to have a gain for the day. Financials (XLF -0.11%) was the next best performer. Consumer Staples (XLP -1.33%) and Utilities (XLU -1.50%) were at the bottom of the sector list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) rose +0.98%.
The US 30y, 10y, and 2y Treasury yields all advanced. Shorter-term Treasuries sold off more than longer-term bonds, flattening the yield curve.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -4.52%. Ethereum (ETHUSD) declined -7.00%.
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Investor Sentiment
The put/call ratio rose to 0.677. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved to the fear side of neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN) was able to close with a +0.95% gain today. Apple (AAPL) dipped below its 50 MA but was able to close above the line with a decline of -0.39% today. Microsoft (MSFT) and Alphabet (GOOGL) lost -0.38% and -0.53%.
Amazon, Tesla (TSLA), Toyota Motor (TM ), and JP Morgan Chase (JPM) topped the mega-cap list today. Most mega-caps declined for the day. Visa (V), Facebook (FB), Walmart (WMT), and Oracle (ORCL) were at the bottom of the list. Oracle declined 7% after disappointing investors with their current FY guidance. It recovered a bit before close, ending the day with a -5.59% loss.
The daily update growth stock list was a mix of winners and losers today. Enphase (ENPH), Chewy (CHWY), MongoDB, and Solar Edge (SEDG) were the top gainers. At the bottom of the list were Facebook (FB), Ehang Holdings (EH), SNAP (SNAP), and FUTU Holdings (FUTU).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Initial Jobless Claims data is expected to continue to improve on Thursday. The Philadelphia Fed Manufacturing Index will also be released before the market opens.
Adobe (ADBE), Kroger (KR), and Jabil (JBL) release earnings on Thursday. The Jabil report will be before the market opens.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index dipped below the 14,000 support area but quickly recovered to close back above the area.
The trend-line from the 5/12 low points to a +1.08% advance for Thursday.
The five-day trend-line ends with a +0.55% gain.
The one-day trend-line points to a -1.05% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It's hard to tell where investors are heading with the Fed news today. The infamous dot plots show more officials leaning toward 2023 interest rate hikes. And yet, the Fed reiterated its stance that it would wait until there was substantial further progress before introducing changes.
The initial reaction was a sudden dip in the indexes, but then the prices recovered, heading into the close. Based on the Nasdaq chart, I've got an expectation for sideways or lower tomorrow. The long lower wick suggests a possibility for higher. But let's be honest. Who knows.
Stay healthy and trade safe!
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