Daily Market Update for 2/28
Summary: Markets responded to more sanctions on Russia issued by Europe and the United States over the weekend. Treasury yields declined as the demand on the US dollar and US bonds lifted prices.
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 28, 2022
Facts: +0.41%, Volume higher, Closing Range: 77%, Body: 69% Green
Good: Higher high, higher low, positive close on more volume
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Thick green body, longer upper wick, tiny lower wick
Advance/Decline: 1.01, one advancing stock for every declining stock
Indexes: SPX (-0.24%), DJI (-0.49%), RUT (+0.35%), VIX (+9.28%)
Sector List: Energy (XLE +2.47%) and Industrials (XLI +0.77%) at the top. Financials (XLF -1.48%) and Real Estate (XLRE -1.72%) at the bottom.
Expectation: Sideways or Lower
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Market Overview
Markets responded to more sanctions on Russia issued by Europe and the United States over the weekend. Treasury yields declined as the demand on the US dollar and US bonds lifted prices.
The Nasdaq finished a choppy day with a +0.41% advance. Volume was much higher than the previous trading day. The candle has a 69% green body. The longer upper wick formed with a morning rally, but the index returned to the morning lows before another rally in the afternoon took it to a 77% closing range. There was an equal number of advancing and declining stocks.
The Russell 2000 (RUT) was the only other index to gain, with the small-cap index advancing +0.35%. The S&P 500 (SPX) declined by -0.24% and the Dow Jones Industrial Average (DJI) fell by -0.49%. The VIX Volatility Index climbed by +9.32%.
Only four of the S&P 500 sectors gained today. Energy (XLE +2.47%) was the big winner as oil prices continue to rise. Industrials (XLI +0.77%) was the next best sector. Financials (XLF -1.48%) and Real Estate (XLRE -1.72%) were the bottom two sectors.
The US Dollar index (DXY) rose by +0.21%. Long and short-term Treasury Yields all dropped as investors bought up bonds as a place to park US dollars. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices tracked higher along with treasuries (yields drop as prices rise).
The put/call ratio dropped to 0.748. The CNN Fear & Greed index slipped back into Extreme Fear.
Five of the big six mega-caps gained for the day. Amazon (AMZN) was the only decline but did close higher than intraday lows and near its 21d EMA. Microsoft (MSFT) gained +0.50% to close above its 21d EMA and 200d MA. Tesla (TSLA) had the biggest gain, climbing by +7.48% today but hitting resistance at its 21d EMA. The company appears on track to open a factory in Germany in March.
Tesla was the top mega-cap for the day, followed by Chevron (CVX) which gained +3.09%. JP Morgan Chase was at the bottom of the mega-cap list with a -4.17%. Also near the bottom was Taiwan Semiconductor (TSM) which continued its decline with a -3.79% loss today.
On the Daily Update Growth List, two stocks gained more than 10%. Solar Edge (SEDG) climbed by +14.93%, possibly due to worries over oil shortages. Chewy (CHWY) gained +11.79% to come in second on the list. At the bottom of the growth list is Alibaba (BABA) with a -2.55% decline today.
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Looking ahead
Manufacturing data from ISM will be available after the markets open on Tuesday.
Salesforce.com (CRM), Target (TGT), Sea Unlimited (SE), Baidu (BIDU), AutoZone (AZO), Hewlett Packard (HPE), Dominos Pizza (DPZ), McAfee (MCFE), AMC Entertainment (AMC), and Kohls Corp (KSS) are among the earnings reports tomorrow.
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Trends, Support, and Resistance
The Nasdaq touched above the 13,800 support/resistance area in the morning but closed below that area by the end of the day.
The five-day and one-day trend lines point to a -0.65% decline for tomorrow.
The trend line from the 2/10 high ends with a -4.08% decline for Tuesday. If the current uptrend continues, I'll replace this with a trend line from the 2/24 low.
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Wrap-up
Depending on what you read, the financial impact of sanctions on Russia should be sending equities lower. It certainly has the expected impact on the dollar and bonds. But so far, our favorite index continues to march higher. But there certainly could be more downside in the near future as the story plays out in Ukraine.
Things look good. Three days of gains, two on higher volume. The advance/decline line is over 1.0 for those three days and the closing ranges have been great. I think investors may take an opportunity here to take profits and so tomorrow I'd expect a Sideways or move Lower before we see further gains.
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 28, 2022
Facts: +0.41%, Volume higher, Closing Range: 77%, Body: 69% Green
Good: Higher high, higher low, positive close on more volume
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Thick green body, longer upper wick, tiny lower wick
Advance/Decline: 1.01, one advancing stock for every declining stock
Indexes: SPX (-0.24%), DJI (-0.49%), RUT (+0.35%), VIX (+9.28%)
Sector List: Energy (XLE +2.47%) and Industrials (XLI +0.77%) at the top. Financials (XLF -1.48%) and Real Estate (XLRE -1.72%) at the bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Markets responded to more sanctions on Russia issued by Europe and the United States over the weekend. Treasury yields declined as the demand on the US dollar and US bonds lifted prices.
The Nasdaq finished a choppy day with a +0.41% advance. Volume was much higher than the previous trading day. The candle has a 69% green body. The longer upper wick formed with a morning rally, but the index returned to the morning lows before another rally in the afternoon took it to a 77% closing range. There was an equal number of advancing and declining stocks.
The Russell 2000 (RUT) was the only other index to gain, with the small-cap index advancing +0.35%. The S&P 500 (SPX) declined by -0.24% and the Dow Jones Industrial Average (DJI) fell by -0.49%. The VIX Volatility Index climbed by +9.32%.
Only four of the S&P 500 sectors gained today. Energy (XLE +2.47%) was the big winner as oil prices continue to rise. Industrials (XLI +0.77%) was the next best sector. Financials (XLF -1.48%) and Real Estate (XLRE -1.72%) were the bottom two sectors.
The US Dollar index (DXY) rose by +0.21%. Long and short-term Treasury Yields all dropped as investors bought up bonds as a place to park US dollars. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices tracked higher along with treasuries (yields drop as prices rise).
The put/call ratio dropped to 0.748. The CNN Fear & Greed index slipped back into Extreme Fear.
Five of the big six mega-caps gained for the day. Amazon (AMZN) was the only decline but did close higher than intraday lows and near its 21d EMA. Microsoft (MSFT) gained +0.50% to close above its 21d EMA and 200d MA. Tesla (TSLA) had the biggest gain, climbing by +7.48% today but hitting resistance at its 21d EMA. The company appears on track to open a factory in Germany in March.
Tesla was the top mega-cap for the day, followed by Chevron (CVX) which gained +3.09%. JP Morgan Chase was at the bottom of the mega-cap list with a -4.17%. Also near the bottom was Taiwan Semiconductor (TSM) which continued its decline with a -3.79% loss today.
On the Daily Update Growth List, two stocks gained more than 10%. Solar Edge (SEDG) climbed by +14.93%, possibly due to worries over oil shortages. Chewy (CHWY) gained +11.79% to come in second on the list. At the bottom of the growth list is Alibaba (BABA) with a -2.55% decline today.
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Looking ahead
Manufacturing data from ISM will be available after the markets open on Tuesday.
Salesforce.com (CRM), Target (TGT), Sea Unlimited (SE), Baidu (BIDU), AutoZone (AZO), Hewlett Packard (HPE), Dominos Pizza (DPZ), McAfee (MCFE), AMC Entertainment (AMC), and Kohls Corp (KSS) are among the earnings reports tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq touched above the 13,800 support/resistance area in the morning but closed below that area by the end of the day.
The five-day and one-day trend lines point to a -0.65% decline for tomorrow.
The trend line from the 2/10 high ends with a -4.08% decline for Tuesday. If the current uptrend continues, I'll replace this with a trend line from the 2/24 low.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Depending on what you read, the financial impact of sanctions on Russia should be sending equities lower. It certainly has the expected impact on the dollar and bonds. But so far, our favorite index continues to march higher. But there certainly could be more downside in the near future as the story plays out in Ukraine.
Things look good. Three days of gains, two on higher volume. The advance/decline line is over 1.0 for those three days and the closing ranges have been great. I think investors may take an opportunity here to take profits and so tomorrow I'd expect a Sideways or move Lower before we see further gains.
Stay healthy and trade safe!
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