Daily market review Mar 25, 2024 (market struggling to follow through after breaking out, Bitcoin regain 70K level, flow data in focus, )
Broad market overview
Market struggle to follow through after initial breakout to all time high, is this hesitation on market ? or just small pinch before breaking out again, we remain attentive to the follow through action.
S&P 500 11 sectors
Energy and Utilities are top ranking sectors while and Technologies are the bottom ranking sectors.
MOVE index
MOVE index closed at 92 level ( bond price implied volatility is expected to be around 9.2% per annum. ) Consistent close below 100 level is in general bullish for market.
Bond volatility moving lower translates into lesser haircut to bond, in which more liquidity can be extracted from the collateral pool.
NYSE & Nasdaq market internals
Internal is lacklustre. ( volume lower than usual )
On March 25th 2024,
1.39 to 1 NYSE Decliner to Advancer ratio (1632/1173 )
1.40 to 1 Nasdaq Decliner to Advancer ratio (2463/1756 )
% of stock above 20Day, 50Day, 200Day
% of SPX stock above 20day MA has declined to around 60%, while the rest is holding up at 70% to low 80%.
Also notably in the past few weeks, % of stock above 50days Ma drop to mid 50% level, but SPX has not even fall below 20day MA, which is a testament to the strength of the market.
McCllelan oscillator and Summation index
SPX McCllelan oscillator is slowly trending up again and summation index is increasing after bottoming at 550 level( indication of other sectors picking up the slack after tech and Semi momentum slowed recently )
As for NDX, momentum as represented by SPX McCllelan oscillator is a bit lacklustre and Summation index has been dropping but haven’t really show signs of bottoming.
Small cap growth base breakout
Price retest previous base breakout support. Will it retrace deeper or bounce from there ? likely to bounce higher if price can stay and hold above 270.
Flow data
Outflow from institution
According to JP Morgan data, Asset managers and leverage fund has been selling equities into strength recently.
According to Goldman Sachs Data, Hedge fund(HF) and long only funds(LO = longly) has been selling recently around march, after a relatively flat period in Jan and Feb. mostly within tech space. Perhaps this could be why Nasdaq has been pretty range bound in March.
According to Bank of America data, there’s significant outflow after record inflow in the previous week.
Equity Inflow from Mutual fund
On the other hand, Mutual fund inflow into equity remain strong
Bitcoin
According to the foremost liquidity Expert, Bitcoin ( bitcoin only, other cryptocurrency has not been tested, which has lesser data point than Bitcoin) track the liquidity index relatively closely, lagging only by about 6 weeks, it’s the financial instrument that is most responsive to changes in liquidity conditions. No other instruments come close to it in terms of liquidity sensitivities. And this is why I dedicate a section to Bitcoin ( I look at it daily even when I am not writing any new blog entry )
Bitcoin daily chart
There’s no trend deterioration despite the recent retracement from 73K to 61K. RSI is above 50 level
Bitcoin hourly chart
Bitcoin hold the 61000 low and has broken out of contracting triangle to the upside, hovering at around 70K level currently
Bitcoin futures positioning
Institutions has been net long while hedge fund has been netshort, who’s correct and who will be proven wrong ultimately ?
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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