Free Daily market review Jan 10th, 2024 (Cap-weighted outperform Mid& small cap, Equal-weighted counterpart , pending CPI release)
Broad market overview
On Jan 10th 2024 trading session. SPX, NDX , DJIA and Transport close at around 0.5%, while Mid&Smallcap, equal weighted indices close at around 0.25%. Notably Semiconductors sectors underperform and barely manage to stay positive, were it not for Nvidia +2.28% , the semiconductors would have close at a negative. This is Cap distortion and negative breadth on display within semiconductor sector. Is it a one day phenomena or will it sustain for a few days ? We shall watch the semiconductors sectors closely in the coming days.
S&P 500 11 sectors
nothing meaningful, a broadening of participation to other sectors is required for sustainable climb in rally
Apple downgrade (to 2nd largest holdings in SPY )
Additional FYI,
=> as of Jan 4th 2024, Apple is the 2nd largest holdings in SPY ETF (6.76% ), overtaken by Microsoft (6.95%)
=>Apple is still vanguard total stock market fund ,VOO, InvesCo QQQ,QQQM largest holdings
If Apple market Cap is overtaken by Microsoft ( AAPL 2.90T vs MSFT 2.84T as of Jan 10th ) and other ETF, Mutual funds start lowering Apple weightings in the fund, Apple performance will likely lag both market & Tech Sector return going forward
On the surface, the % changes may not seem much, but 0.2% differences in all these ETF and Mutual funds are equivalent to billions of dollar in flow allocation differences, inflow differences of this magnitude widen the return performance chasm between them.
Apple technical charts
Currently price is between 50D and 100D MA. Apple is likely to recapture 20D MA, but its performance may lag the market going forward.
The difference in fate could not be starker, Apple is facing few headwinds( sales slowdown, lawsuits, and possibly weightings changes in ETF/mutual in future ), while Microsoft is having tailwind on its back ( AI deployed across all the divisions )
Personally, I am still a big fan of Iphone 15 pro ( MAX ). ( 3D facial recognition is still best, idiot proof, Scam proof, what’s there to not like about this phone ? )
MOVE index
Move index give us one possible lenses to look at private sectors collateral pool utilization. MOVE index close at 109, price has broken out of symmetrical triangle formation. As price has broken to the downside, this likely mean stock will continue it’s upward trend. ( as long as CPI do not surprise to the upside by more than 20-30%, market will continue in a business as usual manner. )
NYSE market internals
Monday Jan 8th, 3.04 to 1 NYSE Advancer to Decliner ratio ( 2143/704 )
Tuesday Jan 9th, 2.33 to 1 NYSE Decliner to Advancer ratio ( 1963/844 )
Wednesday Jan 10th, 1.31 to 1 NYSE Advancer to Decliner ratio ( 1660/704 )
My future plan
As market are quiet, these are the best time to work on my other sections in the blogs and publishing. Amongst which, Final market lesson of 2023 and market model approach. I was planning to published them in the first week of January, however market had other plan and decide to throw a monkey wrench to my time schedule, as the saying goes, man proposes but god disposes.
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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