Daily Market Update for 2/7
Summary: Small-caps outperformed while Meta continued to weigh on major indexes, creating a volatile day for equities.
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, February 7, 2022
Facts: -0.58%, Volume higher, Closing Range: 16%, Body: 39% Red
Good: Higher high, higher low, advance/decline line
Bad: Decline on higher volume, closing range
Highs/Lows: Higher high, Higher low
Candle: Longer upper wick over a red body, low closing range
Advance/Decline: 1.43, almost three advancing stocks for every two declining stocks
Indexes: SPX (-0.37%), DJI (+0.00%), RUT (+0.51%), VIX (-1.55%)
Sector List: Energy (XLE +1.28%) and Financials (XLF +0.30%) at the top. Technology (XLK -0.66%) and Communications (XLC -1.74%) at the bottom.
Expectation: Sideways
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Market Overview
Small-caps outperformed while Meta continued to weigh on major indexes, creating a volatile day for equities.
The Nasdaq was down -0.58% for the day. Volume was higher for the day. A rally in the first 20 minutes created a long upper wick and a higher high than the previous day. The rally faded and eventually the index sold into the close, creating a closing range of 16% under a 39% red body. Despite the decline with higher volume, there were almost three advancing stocks for every two declining stocks.
The Russell 2000 (RUT) outperformed for the day as small-caps got some attention, lifting the index by +0.51%. The S&P 500 (SPX) declined -by 0.37% while the Dow Jones Industrial Average (DJI) ended the day flat. The VIX Volatility Index declined -by 1.51%.
Five out of the eleven S&P 500 indexes advanced. Energy (XLE +1.28%) and Financials (XLF +0.30%) were the best two sectors. Technology (XLK -0.66%) and Communications (XLC -1.74%) were at the bottom of the list.
The US Dollar index (DXY) declined -by 0.07%. US 30y and 10y Treasury yields rose while the 2y Treasury yield declined. High Yield (HYG) Corporate Bond prices declined. Investment Grade (LQD) Corporate bond prices increased. Crude Oil Futures finally declined a big after climbing sharply last week. Aluminum Futures hit a high for 2022.
The put/call ratio (PCCE) declined to 0.729. The CNN Fear & Greed Index remains in the Fear range.
Of the big six mega-caps, only Amazon (AMZN) ended the day in the positive, gaining +0.19%. Meta (FB) dragged the market down with a -5.14% decline. Alphabet (GOOGL) dropped back below its 50d MA with a -2.86% decline.
Novo Nordisk (NVO) was the top-performing mega-cap for today. At the bottom of the mega-cap list was Alibaba (BABA), declining -by 6.05%.
Peloton (PTON) topped the Daily Update Growth List with a +20.93% swing to the positive. Rumors emerged this weekend that several companies, including Amazon and Nike, were looking at a potential acquisition of the beaten-down company. The biggest loser in the Growth List was RobinHood (HOOD), dropping -by 8.37%.
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Looking ahead
Crude Oil Inventories will be available after the market opens tomorrow. Two Fed officials (Bowman and Mester) speak in the morning. There is a 10-year note auction scheduled for the afternoon.
Toyota (TM ), Walt Disney (DIS), CVS (CVS), GlaxoSmithKline (GSK), Uber (UBER), Honda (HMC), Yum! Brands (YUM), Twilio (TWLO), and Zynga (ZNGA) are some of the significant earnings reports for Tuesday.
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Trends, Support, and Resistance
The index whipped up and down today in a sideways move, ending with a sell-off at close for a decline.
If the index returns to the trend line from the 1/24 low, that would mean a +2.56% gain for tomorrow.
The one-day and five-day trend lines point to a -0.37% decline.
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Wrap-up
Investors can expect more twists and turns as the market rotates from one risk asset to the next, looking for returns while reducing exposure to Inflation and Interest rates.
The expectation for tomorrow is Sideways.
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, February 7, 2022
Facts: -0.58%, Volume higher, Closing Range: 16%, Body: 39% Red
Good: Higher high, higher low, advance/decline line
Bad: Decline on higher volume, closing range
Highs/Lows: Higher high, Higher low
Candle: Longer upper wick over a red body, low closing range
Advance/Decline: 1.43, almost three advancing stocks for every two declining stocks
Indexes: SPX (-0.37%), DJI (+0.00%), RUT (+0.51%), VIX (-1.55%)
Sector List: Energy (XLE +1.28%) and Financials (XLF +0.30%) at the top. Technology (XLK -0.66%) and Communications (XLC -1.74%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Small-caps outperformed while Meta continued to weigh on major indexes, creating a volatile day for equities.
The Nasdaq was down -0.58% for the day. Volume was higher for the day. A rally in the first 20 minutes created a long upper wick and a higher high than the previous day. The rally faded and eventually the index sold into the close, creating a closing range of 16% under a 39% red body. Despite the decline with higher volume, there were almost three advancing stocks for every two declining stocks.
The Russell 2000 (RUT) outperformed for the day as small-caps got some attention, lifting the index by +0.51%. The S&P 500 (SPX) declined -by 0.37% while the Dow Jones Industrial Average (DJI) ended the day flat. The VIX Volatility Index declined -by 1.51%.
Five out of the eleven S&P 500 indexes advanced. Energy (XLE +1.28%) and Financials (XLF +0.30%) were the best two sectors. Technology (XLK -0.66%) and Communications (XLC -1.74%) were at the bottom of the list.
The US Dollar index (DXY) declined -by 0.07%. US 30y and 10y Treasury yields rose while the 2y Treasury yield declined. High Yield (HYG) Corporate Bond prices declined. Investment Grade (LQD) Corporate bond prices increased. Crude Oil Futures finally declined a big after climbing sharply last week. Aluminum Futures hit a high for 2022.
The put/call ratio (PCCE) declined to 0.729. The CNN Fear & Greed Index remains in the Fear range.
Of the big six mega-caps, only Amazon (AMZN) ended the day in the positive, gaining +0.19%. Meta (FB) dragged the market down with a -5.14% decline. Alphabet (GOOGL) dropped back below its 50d MA with a -2.86% decline.
Novo Nordisk (NVO) was the top-performing mega-cap for today. At the bottom of the mega-cap list was Alibaba (BABA), declining -by 6.05%.
Peloton (PTON) topped the Daily Update Growth List with a +20.93% swing to the positive. Rumors emerged this weekend that several companies, including Amazon and Nike, were looking at a potential acquisition of the beaten-down company. The biggest loser in the Growth List was RobinHood (HOOD), dropping -by 8.37%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Crude Oil Inventories will be available after the market opens tomorrow. Two Fed officials (Bowman and Mester) speak in the morning. There is a 10-year note auction scheduled for the afternoon.
Toyota (TM ), Walt Disney (DIS), CVS (CVS), GlaxoSmithKline (GSK), Uber (UBER), Honda (HMC), Yum! Brands (YUM), Twilio (TWLO), and Zynga (ZNGA) are some of the significant earnings reports for Tuesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index whipped up and down today in a sideways move, ending with a sell-off at close for a decline.
If the index returns to the trend line from the 1/24 low, that would mean a +2.56% gain for tomorrow.
The one-day and five-day trend lines point to a -0.37% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Investors can expect more twists and turns as the market rotates from one risk asset to the next, looking for returns while reducing exposure to Inflation and Interest rates.
The expectation for tomorrow is Sideways.
Stay healthy and trade safe!
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