Daily market review June 21, 2024 (Largest Institutional buying flow into Tech ETF, Equal weighted indices outperform Cap weighted counterpart in Quad witching day)
Apologies to readers for my absence in the past 1 week or so as I was on business trip leave.
Broad market overview
In the Quadruple witching expiry Friday, June 21, 2024, Semis perform the worst , losing 1.5%, but luckily broad market perform quite ok, bringing broader market to close slightly negative for cap-weighted indices and slightly positive for broader market, equal-weighted indices.
Overall, equal weighted performed better than cap weighted indices.
Is this the start of a sector rotation trade ? Based on initial diagnosis, I think it maybe forthcoming. we need to examine more charts below and wait for a few more days to ascertain further.
S&P 500 11 sectors overview
Discretionary, Communications and Healthcare are the best performing sectors. While Energy, Financials and industrials are the bottom ranking sectors.
MOVE index
Move index is currently at 94.09, ( bond price implied volatility is expected to be around 9.41% per annum. ) Lower MOVE points to expected 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
More or less equal advancers to Decliners ratio, which was an improvement compared to previous day. Generally, after Memorial day holiday, volume will decline gradually heading into the summer season.
On June 21 2024,
1.06 to 1 NYSE Advancer to Decliner ratio (1440/1353 )
1.03 to 1 Nasdaq Advancer to Decliner ratio (2140/2073 )
% of stock above 20Day, 50Day, 200Day
Breadth is improving while market is declining slightly, which means Cap distortion effect is causing market to decline slightly,
But it also points to possibilities of sector rotation underway & possibly eventual broadening of market rally
% of SPX stock above 20D MA : 54%
% of SPX stock above 50Day MA : 53.6%
% of SPX stock above 200Day MA : 70.8%
Institutional ETF Funds flow
According to BofA, Tech sector experienced the largest ETF buying inflow last week in over 7 years.
As a result of last week inflow, it has bumped up the tech positioning among Fund manager to several places.
By Tomorrow, paid subscribed readers will get my thoughts on the possible new trade and new sector ETF Trade.
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.
But the strange thing is, Stock market is performing better and making new All Time High while Bitcoin is not; this is quite a stark contrast compared to Q1 situation, where Bitcoin made new high before benchmark stock market. Liquidity condition is still going up and getting better compared to April/May, so the only reason I could think of is that, Bitcoin is mired in its own market idiosyncrasy, while stock market is obeying in its own cycle characteristics
Bitcoin daily chart
Bitcoin is currently below 20D and 50D MA, 20D MA is on the verge of crossing below 50D MA
BTC RSI is approaching 30 level
BTC is very likely to retest previous swing low at 60K again..
As always, we will continue to monitor the charts, assess the bullish/bearish evidence day-by-day to make appropriate capital allocation and investment decisions on all time frame ( short, mid & long term )
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