Daily market review March 11 ( Market quiet pending March 12 CPI release )
Broad market overview
Semis perform the worst . Losing more than 1.7% daily.
Overall , Equal weighted indices outperformed Cap weighted counterpart.
Will there be follow through ? it will depends on the crucial CPI data release on March 12 , where everyone will be scrutinizing the data component to see if there are any elements showing signs of stickiness/sustainable increase.
March 12 CPI release directly informs the dot plot projection and fed communication tone.
FYI, per past info from Fed chair Powell, FOMC members are given up to 24 hours before start of meeting to submit their updated dotplot, so period between March 12 to march 19-20 meeting are quite an ample time for them to assess their economic projection point.
S&P 500 11 sectors
Materials, Energy and Staples are the top ranking sectors while industrials and real estates are the bottom ranking sectors.
On both 1 week and 1 month basis, Materials , energies and utilities perform the best, while Technologies, Discretionary and Communications/industrials perform the worst.
SPX
Price is sitting comfortably with some buffer above 5100 and 20D MA, March 12 will be the crucial day to get an initial inkling of the next directional move.
NDX
Price is resting at 20D MA, March 12 will be the crucial day to get an initial inkling of the next directional move.
Would like to point an interesting phenomena, as market gets jittery over the important data release or fed decision, there will be some pullback/sell off before the “event” date, but ultimately it all fail to have any follow through in the “event day” or “post event” day. Which led to market chatter about the use of cheap hedges, 0Dte options before event date to hedge against event date, and square the hedges on the event date. Contributing to Fall before event, rise in the event or post event date phenomena.
Also, there’s not much deterioration in Inflation data yet even though it look “sticky” at high 2 or sub 3% in the past few months. Hence, the no follow through in sell-off day.
Macro data
Inflation forecast
Goldman, Nomura and Barclays are forecasting slightly higher ? will they make the right call for March 12 CPI release ?
Beige book Activity index
Recession ?? it has flirted close to recessionary territory last year but has since steer clear of it.
Market top vs Market bottom
An interesting chart from bloomberg, Market bottom is point/event ( often V bottom ), Market top a process which is why it’s much harder to call a top
NYSE & Nasdaq market internals
Market is in a wait and hold stance, there’s no high Decliner to Advancer ratio and no expansion of new lows.
On March 11th 2024,
1.01 to 1 NYSE Advancer to Decliner ratio (1413/1397 )
1.45 to 1 Nasdaq Decliner to Advancer ratio (2525/1739 )
Bitcoin
Bitcoin has breached 70K level, and is currently sitting at 72K level ( a day after participant wonder if 70K is a “respectable” resistance ). Consolidation, 70K resistance, CPI release be damn.
This chart shows BTC ETF flow type, Grayscale has been the major casualty of Spot BTC ETF approval.
BTC price dynamic
It’s likely in a BTC ETF Flow increase BTC price, and BTC price increase BTC ETF flow feedback loop, the momentum is astounding. Things can obviously cut both way, when will it pullback ?
An interesting place to watch in the next few week.
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.
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