Daily Market Update for 9/29Summary: Two failed rallies for the Nasdaq ended in a decline for the day while the Dow Jones completed the day with a gain. Growing concerns about the debt ceiling debate in Washington and continued inflation in the economy have Investors playing defense.
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, September 29, 2021
Facts: -0.24%, Volume higher, Closing Range: 10%, Body: 56% Red
Good: Held support above 14,500
Bad: Red body, lower high, lower low, close lower on high volume
Highs/Lows: Lower high, Lower low
Candle: Thick red body in lower part of the candle
Advance/Decline: 0.52, two declining stocks for every advancing stock
Indexes: SPX (+0.16%), DJI (+0.26%), RUT (-0.20%), VIX (-2.97%)
Sector List: Utilities (XLU +1.31%) and Consumer Staples (XLP +0.91%) at the top. Technology (XLK -0.13%) and Materials (XLB -0.41%) at the bottom.
Expectation: Sideways or Lower
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Market Overview
Two failed rallies for the Nasdaq ended in a decline for the day while the Dow Jones completed the day with a gain. Growing concerns about the debt ceiling debate in Washington and continued inflation in the economy have Investors playing defense.
The Nasdaq closed the day with a -0.24% decline. Volume was higher than the previous day. The closing range of 10% comes after two intraday rallies. Eventually, the 56% red body in the bottom of the candle led the index to rest above the 14,500 support area at the close. There were two declining stocks for every advancing stock.
The Dow Jones Industrial Average (DJI) advanced +0.26% as the NYSE had more gainers than losers for the day. The S&P 500 (SPX) closed with a +0.26% gain, but the Russell 2000 (RUT) declined -0.20%. The VIX Volatility Index fell -2.97% but remains high.
Utilities (XLU +1.31%) and Consumer Staples (XLP +0.91%) were at the top of the sector list. Investors fled to defensive sectors to protect against further volatility. Growth and cyclical sectors were at the bottom of the list, with Technology (XLK -0.13%) and Materials (XLB -0.41%) performing the worst for the day.
Pending Home Sales grew 8.1% in August vs. the forecast of 1.4%. Crude Oil Inventories were at 4.6 million barrels compared to a forecast of -1.7 million barrels.
The US Dollar index (DXY) rose another +0.68% for the day, reaching its highest level since October 2020. Treasury Yields eased back slightly from recent gains. High Yield (HYG) Corporate Bond prices rose for the day while Investment Grade (LQD) Corporate Bond prices remained about the same. Silver declined -4.10% for the day. Gold also fell, losing -0.52%.
The put/call ratio dropped to 0.729. The CNN Fear & Greed index remained in the Fear area.
Apple (AAPL) and Microsoft (MSFT) were able to find support and end the day with gains. Alphabet (GOOGL) continued to tumble, losing another -1.09% today. Eli Lilly (LLY) was the top mega-cap for the day, gaining +3.95%. The company got an upgrade from Citigroup to a Buy rating and a new price target of $265. Netflix (MFLX) also performed well, gaining +2.61% after acquiring the video gaming company Night School. Alibaba (BABA) was the worst performer in the mega-cap list, declining -3.16%.
The Daily Update growth list was mostly decliners for today. RH (RH) was the best performer, topping the list with a +1.65% gain. JD.com (JD) and Ehang Holding (EH) were at the bottom of the list, both losing more than 5% as Chinese stocks dropped lower today.
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Looking ahead
We will get an update on Q2 GDP numbers tomorrow morning. The weekly Initial Jobless Claims report will also be available before the market opens. Several Fed officials will speak in the morning.
Don't expect any significant updates on funding for the government or the debt ceiling until a scheduled vote late in the evening on Thursday.
Paychex (PAYX), CarMax (KMX), and Bed Bath & Beyond (BBBY) are a few interesting earnings reports to watch out for tomorrow.
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Trends, Support, and Resistance
The Nasdaq had two failed rally attempts today before closing just above the 14,500 support area.
If the index returns to the trend line from the 9/7 high, that would mean a gain of +0.88% for tomorrow.
The one-day trend line points to a -0.39% decline.
The five-day trend line ends with a -0.82% decline.
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Wrap-up
There is not much to do other than wait for what happens in Washington over funding for the government and the debt ceiling. A default on US debt is not likely, but fear and doubt will continue to grow until the debate finishes.
The expectation for tomorrow is Sideways or Lower.
Stay healthy and trade safe!
