Daily market review Jan 8th, 2024 (Broad based market rebound, led by Technology and semiconductors. )
Broad market overview
Market rebound decisively on Jan 8th 2024 trading session. Recovery was initially led by Technology and semiconductors, but broaden out to other sectors, mid & small cap. Nearly every major indices rose by more than 1% , except for DJIA and Transports.
It’s entirely possible that market rose on Monday in anticipation of further slowdown in CPI ( Jan 11th release ) and favourable upcoming earning seasons.
S&P 500 11 sectors
Technology, Discretionary, communications, are the top 3 performers on Friday. While Materials and Energy are dead last.
Santa Claus rally period (-0.6%) and First five Day (almost flat)
Santa Claus Rally period closed at -0.6% for S&P 500. ( Dec 26 – last trading day in December + first 2 days in January ).
So far S&P 500 first 5 days returns are -0.57 , -0.8 , -0.34 and +0.18, +1.41 for a net total of -0.12%, so the 5th trading day alone erase did almost negate selling wave
How would the rest of the year turn out? We still have to look at January barometer. Entire January close.
To be honest, percentage wise -0.6% and -0.12% are not very negative, but if we look at multiple breadth thrusts that have occurred since Oct 27 Market bottom, things would still turn out fine (January barometer turning in positive Return figure would help ). In my future post, I will cover more on the other technical parameters to look at to gauge the upcoming year, and show Numerous Breadth thrust that I didn’t manage to cover in my previous post.
Apple downgrade (to 2nd largest holdings in SPY ) and technical charts
Additional FYI,
=> as of Jan 4th 2024, Apple is the 2nd largest holdings in SPY ETF (6.76% ), overtaken by Microsoft (6.95%)
=>Apple is still vanguard total stock market fund ,VOO, InvesCo QQQ,QQQM largest holdings
If Apple market Cap is overtaken by Microsoft ( AAPL 2.89T vs MSFT 2.78T as of Jan 8th ) and other ETF, Mutual funds start lowering Apple weightings in the fund, Apple performance will likely drop further and lag both market & Tech Sector return.
Apple technical charts
on Jan 8th 2024 trading session, it has rebounded from area between 100D and 200D MA, between 50% - 61.8% retracement based on End Oct - Mid Dec price swing
Apple is likely to recapture 20D MA, but its performance may lag the market going forward
Anyhow, several early pullback warning signs has been shown in my previous blog. Therefore, this short term pull back should not come as a surprise.
MOVE index
Move index give us one possible lenses to look at private sectors collateral pool utilization. MOVE index close at 117%, price is contracting and is confined within a triangle, market breakout from this triangle need to be watchout closely, as it may dictate equity market movement post breakout.
S&P 500 overview
On Jan 8th, 2024 trading session, Price rebound from 20D MA (4680 - 4700 )
market next movement may depends on how it price in the following,
1) Thursday Jan 11th CPI
2) upcoming Q4 earnings report over the next few weeks
based on current set up, unlikely to retest CPI gap
Nasdaq 100 Overview
On Jan 8th, 2024 trading session, price recapture 20D MA
market next movement may depends on how it price in the following,
1) Thursday Jan 11th CPI
2) upcoming Q4 earnings report over the next few weeks
NYSE market internals
Thursday Jan 4th, 1.03 to 1 NYSE Decliner to Advancer ratio ( 1427/1386 )
Friday Jan 5th, 1.19 to 1 NYSE Advancer to Decliner ratio ( 1527/1285 )
Monday Jan 8th, 3.04 to 1 NYSE Advancer to Decliner ratio ( 2143/704 )
The peculiarity of TRIN being 1.6 on Jan 8th session should be regarded as formula anomaly ( bearish above 1.0 , Bullish below 1.0 )
TRIN formula = ( Advancing issue/Declining issue ) / ( Advancing volume/Declining volume )
So if there are 3 – 4 times advancing issue vs declining issue, but only 2 to 1 ratio in Advancing volume vs Declining volume, then the formula will give a reading above 1.0.
The following sections are for Paid subscribers.
=>AVWAP charts ( including Apple charts )
=>10Y yield charts
=> near term warning signal to lookout for
=> Sector ETF choice for the month of January to outperform SPY ( with new added buying flow as supportive evidence )
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