Daily market review June 28, 2024 ( market stuck in range and intraday “reversal” in quarter end rebalancing )
Broad market overview
Market largely went nowhere on last day of Q2, June 28 2024. Cap-weighted Market open higher but close lower, displaying a certain intraday “reversal“ pattern, and occurring at a higher than average volume ( for SPX NDX, DJIA ). This could be confusing to some investors who are unaware of the quarter end rebalancing, window dressing by the large institution, but it is largely considered to be harmless and not threatening existing ongoing uptrend.
Overall, Small and mid cap, equal weighted indices outperform cap weighted counterpart.
Trading lesson moment
Also intraday “reversal” occurrence on Friday serve as a reminder to not chase the market. When PCE data came out to be as expected, market shoot up subsequently and was giving every market participant a seductive wink, inducing many at chasing them, but as an experience watcher myself, I have resisted the temptation to chase the market because I have been burned before by the spike upwards and the subsequent reversal of spike.
not a good idea to chase near high for extremely short trading time frame,.
Especially with Stop loss near previous day low, and even if your stop loss is not triggered, it exert mental pressure when you see your account in red or short term gain vanish shortly after.
S&P 500 11 sectors overview
Real estates is the best performing sectors. While Utilities, Discretionary, and Communications are the bottom ranking sectors.
MOVE index
MOVE is coiling tightly, pending breakout for the next directional move
Move index is currently at 98.59, ( bond price implied volatility is expected to be around 9.86% 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
More advancers relative to Decliners, more up volume than down volume on a mix day(down day for cap-weighted market, up day for mid and small cap )
Much Higher than average volume indicates quarter end closing and rebalancing for large institutions
On June 28 2024,
1.44 to 1 NYSE Advancer to Decliner ratio (1660/1154 )
1.17 to 1 Nasdaq Advancer to Decliner ratio (2283/1953 )
% of stock above 20Day, 50Day, 200Day
Breadth has stalled while SPX is still stuck in the range without breakout from either direction
% of SPX stock above 20D MA : 51.8%
% of SPX stock above 50Day MA : 48.8%
% of SPX stock above 200Day MA : 69.6%
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 below 20D and 50D MA, with 20D MA below 50D MA
Bitcoin is currently reconnecting with 20D MA,
RSI is bouncing back to 50 level
will be watching closely to see if it bounce higher or lower from 20D MA
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