Daily market review July 17, 2024 ( market plunge across the board without damaging underlying breadth )
Apologies to readers and subscribers for not being able to provide timely update during this crucial period where so many things have transpired since last Friday. I was down with food poisoning and illness. Still not feeling my usual self, but will try my best to cover as much basics as I possibly can.
Broad market overview
The decline is nasty and swift after Trump Taiwan defence comment.
Semiconductors are the worst performers, losing over 7% and at higher than usual volume.
Benchmark indices such Nasdaq 100 lost close to 3%, S&P 500 lost close to 1.4%, while Dow Jones industrial average gain closed to 0.6%.
Overall, Mid&small cap, equal weighted indices outperformed Cap weighted indices.
It’s believed that the sell off/rotation out of technology sector is not over yet. ( still believed it’s short term in nature, but the degree of retracement might still be larger than expected )
S&P 500 11 sectors overview
The usual suspects are the worst performers in a day like this, Technologies, Communications and discretionary are the bottom ranking sectors. While Staples, Energy, real estates are the best performers.
MOVE index
Move index is currently at 91, ( bond price implied volatility is expected to be around 9.1% per annum. ) Lower MOVE points to (implied) lower bond market volatility going forward.
Bond volatility moving lower translates into less haircut to bond, in which more liquidity can be extracted from the collateral pool.
NYSE & Nasdaq market internals
There are more Decliners than Advancers, but the ratio is not lopsided and seem mild
On July 17 2024,
1.4 to 1 NYSE Decliners to Advancers ratio (1629/1157 )
1.66 to 1 Nasdaq Advancers to Decliners ratio (2633/1587 )
% of SPX stocks above 20D 50D 200D moving average
Hardly any decline in breadth despite the sell off, but as institutions rotate money into other sector, cap-weighted indices will experience larger than expected pullback.
% of SPX stock above 20D MA : 80%
% of SPX stock above 50Day MA : 76.2%
% of SPX stock above 200Day MA : 80.4%
Bitcoin
According to the foremost Global Liquidity Expert, Bitcoin track the Global Liquidity relatively closely, lagging only by about 6 weeks, it display the quickest responsiveness to changes in liquidity conditions.
Bitcoin recent function as a liquidity proxy has gone completely kaput for the past few days, this is because Bitcoin is mired in its own market idiosyncrasy, while stock market is obeying in its own cycle characteristics
Both Mt Gox and German government move their bitcoin at liquidity thin holiday period around Independence day, contributing to the sell off. And we have emerge fully from the aforementioned chaos.
Bitcoin daily chart
Selloff in Bitcoin is officially over
1) Price rose above 20D, 50D, and 200D MA in quick succession
2) made a higher high at 66.1K
3) RSI is above 50
Join my paid subscription as I unpack and give you the best investment idea to take advantage of the current rotation
if you would like to know more about the risk parameters to establish high probability profitable trade, and subsequent response to next market development then join my Paid subscription
Cost vs Benefit of joining paid subscription
For a price of USD 15 per month ( USD 0.50 per day ) or USD 149 per year (less than USD 0.42 per day ) I will give multiple big ideas per year to capitalize on biggest trends and shift in financial market to accelerate the growth of your savings / investment accounts.
That’s right, for the price USD 0.50 or less than USD 0.42 per day, you could gain 4 digit or 5 digit in USD annually with a small account if you catch any 1 of the biggest trends from my ideas & suggestions. I deliberately keep it low to make it extremely affordable and accessible for those with small savings to access high quality research, market leading articles/charts.
The following sections are for paid subscribers
Paid subscribers will get my thoughts on the latest update in the market as the situation/development unfolds. You will also get access to higher quality indicator to get a better handle on the market, and triangulate your entry point at Buying/accumulating your 401K ETF product. Conversely, I will also share strategies and timing ideas to avoid upcoming risk and protect your portfolio should there be incoming market risk in the near term horizon.