Free Daily market review Jan 9th, 2024 (Market quiet pending for CPI release)
Broad market overview, market chatter
After Market rebound on Jan 8th 2024 trading session. Market was quiet on Jan 9th, most are either closing flat or slightly positive/negative. While Small cap close in red -1.14%.
So what’s behind the Dec 29 – Jan 5th market swoon ? Most insiders opined that market fell in the first few days due to tax loss selling. Because if institutions close the winning trades in December, there are capital gains taxes to be paid. Therefore, selling in the coming new calendar days give them maximum flexibility in tax arrangement. Furthermore, selling in new calendar days help them to reset the book, and do rebalancing amongst their asset class, equity sectors.
So, is Jan 5th a low or the low ? hard to reach a verdict now, the next few days will give us a clearer picture, on whether Jan 5th is the low which will start market next leg higher or part of a consolidation.
Also, if upcoming earnings release cycle for Q4 result does not excite the market, that likely also provides a clue to next market movement. Which we will find out more in the coming sessions.
S&P 500 11 sectors
It’s not meaningful to read too much into the sector performance when market are quiet.
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 2.88T vs MSFT 2.79T as of Jan 9th ) and other ETF, Mutual funds start lowering Apple weightings in the fund, Apple performance will likely lag both market & Tech Sector return going forward
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 , as there are quite a few headwinds coming up for Apple ( sales slowdown, lawsuits, and possibly weightings changes in ETF/mutual in future ).
Personally, still a big fan of Iphone 15 pro. ( 3D facial recognition is still best, idiot proof, Scam/Malware 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 115, price is contracting and is confined within a triangle, market breakout from this triangle need to be watch out closely, as it may dictate Bond market movement and influence equity market movement post breakout. ( through 10Y Yield link as the negative correlation between US indices and 10Y yield is still strong )
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 )
Spot Bitcoin ETF upcoming SEC Approval ( buy the rumor , sell the news ? )
Not that I am in this trade, but saw a timely teachable moment of Buy the rumor, sell the news on perfect display.
Bitcoin jump up and close in big doji bar. Initially, there was a announcement of spot BTC ETF approval in SEC Twitter account ( but was later found to be in error /security compromise ). Yet I suspect this is how BTC price will transpire later when the ETF was finally approved. But then again, maybe BTC Halving factor will immediately negate it and push BTC higher again.
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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