Daily Market Update for 4/4Summary: Equities rallied on the first day of the week. Large-cap growth stocks drove the rally while Twitter soared 27% on news that Elon Musk bought a significant stake in the company.
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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Monday, April 4, 2022
Facts: +1.90%, Volume lower, Closing Range: 99%, Body: 92% Green
Good: Higher high, higher low, great closing range
Bad: Lower volume on gain
Highs/Lows: Higher high, Higher low
Candle: Mostly green body, small lower wick
Advance/Decline: 1.18
Indexes: SPX (+0.81%), DJI (+0.30%), RUT (+0.21%), VIX (+0.16%)
Sector List: Communications (XLC +2.76%) and Consumer Discretionary (XLY +2.25%) at the top. Utilities (XLU -0.77%) and Health (XLV -0.83%) at the bottom.
Expectation:
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Market Overview
Equities rallied on the first day of the week. Large-cap growth stocks drove the rally while Twitter soared 27% on news that Elon Musk bought a significant stake in the company.
The Nasdaq rose by +1.90%. Volume was lower than the previous day. The candle is 92% green body with a tiny lower wick and really no upper wick as the index ended the day with a 99% closing range. The higher high and higher low starts the week off in an uptrend. There were more advancing stocks than declining stocks.
The S&P 500 (SPX) gained +0.81%. The Dow Jones Industrial Average (DJI) advanced by +0.30%. The Russell 2000 (RUT) rose by +0.21%. The VIX Volatility Index (VIX) moved higher by +0.16%.
Five of the eleven S&P 500 sectors gained. Communications (XLC +2.76%) and Consumer Discretionary (XLY +2.25%) were the top sectors, the former helped by Twitter's big gain. Utilities (XLU -0.77%) and Health (XLV -0.83%) were at the bottom of the sector list.
Factory Orders for February met expectations.
The US Dollar index (DXY) rose by +0.43%. US 30y and 10y Yields rose while the 2y Yield declined. Both High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices advanced. Brent Oil rose back above $105 for a barrel.
The put/call ratio (PCCE) declined to 0.640. The CNN Fear & Greed index is at the mid-point of Neutral.
All big six mega-caps gained with Tesla (TSLA) leading the way, advancing +5.61% for the day. Amazon (AMZN) closed back above its 200d moving average, gaining +2.93% today. All big six are above their key moving averages.
Alibaba (BABA) was the top mega-cap for the day. It advanced +6.62% along with many other Chinese stocks that rallied. Pfizer (PFE) was at the bottom of the list, declining by -1.22% today.
Twitter (TWTR) was the top stock in the Daily Update Growth List. The company's stock price soared +27.12% after Elon Musk took a 9% stake in the company. Twitter was followed by Chinese Fintech companies. FUTU Holding (FUTU) gained +19.51% and UP Fintech (TIGR) gained +13.74%. There were no decliners in the list, but Crowdstrike (CRWD) landed at the bottom, advancing only +0.52% today.
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Looking ahead
Tuesday morning will bring Import/Export data for February. We will also get the Services and Non-Manufacturing PMI data for March. The data shows the level of activity in those sectors. API Weekly Crude Oil stock comes in the afternoon.
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Trends, Support, and Resistance
The Nasdaq moved met resistance at the 14,500 level, but then closed above that level after a late-session rally.
If the index returns to the trend line from the 3/14 low, that would mean a +2.17% gain for Tuesday.
The one-day trend line points to a +0.77%.
The five-day trend line is still sloping downward from the 3/29 high. That line ends with a -1.79% decline for tomorrow.
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Wrap-up
It was a good start to the week. Investors seem positive about the news of withdrawals in Ukraine. It also helped to have the shiny object of Twitter's rally to attract attention to the market. We'll see if the rally can continue this week.
Stay healthy and trade safe!
