Daily Market Update for 4/1Summary: Small-caps led the way higher on Friday, but defensive sectors continued to top the sector list with mixed news in economic data.
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, April 1, 2022
Facts: +0.29%, Volume lower, Closing Range: 74%, Body: 5% Red
Good: High closing range, recovery from dip
Bad: Lower high, lower low
Highs/Lows: Lower high, Lower low
Candle: Thin red body in upper part of candle, long lower wick
Advance/Decline: 1.1, more advancing than declining stocks
Indexes: SPX (+0.34%), DJI (+0.40%), RUT (+1.01%), VIX (-4.52%)
Sector List: Real Estate (XLRE +1.99%) and Utilities (XLU +1.40%) at the top. Technology (XLK -0.30%) and Industrials (XLI -0.78%) at the bottom.
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Market Overview
Small-caps led the way higher on Friday, but defensive sectors continued to top the sector list with mixed news in economic data.
The Nasdaq rose +0.29%. The candle has a thin red body in the upper half and a long lower wick. Despite the high closing range of 74%, the candle has a lower high and lower low from the previous day. Volume was lower than Thursday. However, there were more advancing stocks than declining stocks.
The Russell 2000 (RUT) outperformed the other indexes, moving up by +1.01%. The S&P 500 (SPX) advanced +0.34% and the Dow Jones Industrial Average (DJI) gained +0.40%. The VIX Volatility Index fell by -4.52%.
Eight of the eleven S&P 500 sectors gained for the day. Real Estate (XLRE +1.99%) and Utilities (XLU +1.40%) were the top-performing sectors. Technology (XLK -0.30%) and Industrials (XLI -0.78%) were at the bottom of the list.
Payrolls grew less than expected in March, with Nonfarm Payrolls gaining 431,000 compared to the forecast of 490,000. However, the unemployment rate declined to 3.6%, better than the expected 3.7%. The ISM Manufacturing PMI that shows the health of the sector, came in at 57.1 compared to the expected 59.0
The US Dollar index (DXY ) gained by +0.22%. The US 30y Treasury Yield declined while the 10y and 2y Treasury Yields rose. High Yield (HYG) Corporate Bond prices fell but Investment Grade (LQD) Corporate Bond prices gained slightly. Brent Oil ended the week below $105.
The put/call ratio (PCCE) declined to 0.784. The CNN Fear & Greed index is on the Fear side, but near Neutral.
Four of the big six gained for the day. Alphabet (GOOG) had the biggest gain, advancing +0.75% after testing its 200d MA. Tesla (TSLA), Microsoft (MSFT), and Amazon (AMZN) followed with +0.75%, +0.36% and +0.35% gains. Apple (AAPL) and Nvidia (NVDA) declined but only Amazon remains below its 200d MA.
Verizon Wireless (VZ) was the top mega-cap for the day. The communications company gained +2.32% on Friday. Nvidia was the worst-performing stock in the mega-cap list.
Stocks in the Daily Update Growth List did well for the day. Fastly (FSLY) topped the list with a +7.65% gain. Draft Kings (DKNG) was at the bottom of the list, declining by -2.16%.
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Looking ahead
Factory Orders data for February will be released on Monday after the market opens.
ZoomInfo (ZI) is among a shortlist of earnings reports to start the week.
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Trends, Support, and Resistance
Despite the daily gain, the Nasdaq put in a lower low and lower high on the day, continuing a downtrend over the last three days of the week.
If the index returns to the trend line from the 3/14 low, that would require a +3.88% for Monday. Returning to that trend line would likely take a few days.
The five-day trend line is in decline, but the index would still need a +0.25% to return to that line.
The one-day trend line is also in decline despite ending the day with a gain. If the one-day trend continues, expect a -0.78% decline for Monday.
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Wrap-up
After two strong days on Monday and Tuesday, the Nasdaq entered a downtrend for the remainder of the week. It's not a bad thing, as it allows moving averages to catch up, keeping the market from getting extended.
Oil prices seem to be coming down which is good. Maersk says that supply chain issues created by shipping costs could be resolved in a few months. That is good news. Market direction for next week depends a lot on the war in Ukraine.
Stay healthy and trade safe!
