Daily Market Update for 5/6

٩ مايو ٢٠٢٢

Summary: The market continued to correct as the US Dollar strengthened and Treasury yields rose on Friday. Defensive sectors in the S&P 500 gained while other sectors sank.

Notes

A brief update today due to holidays and travel. I will be traveling for the next week as well but will try to keep the Daily Market Update going.

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, May 6, 2022

Facts: -1.40%, Volume higher, Closing Range: 42%, Body: 28% Red
Good: Closing range is ok
Bad: Lower high, lower low, higher volume sell-off
Highs/Lows: Lower high, Lower low
Candle: Thin body in middle of long upper and lower wicks
Advance/Decline: 0.27, almost four declining stocks for every advancing stock
Indexes: SPX (-0.57%), DJI (-0.30%), RUT (-1.69%), VIX (-3.24%)
Sector List: Energy (XLE +2.98%) and Utilities (XLU +0.80%) at the top. Materials (XLB -1.43%) and Communications (XLC -2.06%) at the bottom.

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Market Overview

A brief update today due to holidays and travel. The market continued to correct as the US Dollar strengthened and Treasury yields rose on Friday. Defensive sectors in the S&P 500 gained while other sectors sank.

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Looking ahead

Fed's Raphael Bostic is scheduled to speak on Monday. Bostic is on the hawkish side of the Fed and could stoke fears of higher interest rate hikes despite Jerome Powell's assurance they would limit to 50 basis points.

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Trends, Support, and Resistance

The Nasdaq fell to 12,000 before getting support on Friday. Some analysts have forecasted 12,000 as the bottom during this correction, but time and the market will tell if that's true. The 40w EMA is at 11,750.07. The index dipped below this line only in the 2000, 2008, and 2020 crashes.

If the index returns to the trend line from the 3/29 high, that would mean a +0.66% gain for Monday.

The one-day and five-day trend lines point to a -0.67% decline.

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Wrap-up

Analysts have been waiting for broad market capitulation and maybe we've seen some over the past two days, or maybe there is more to come. Watch the two levels at 12,000 and 11,750. If those levels hold, then we could see some upside from there.

Stay healthy and trade safe!