What a day! It was close to a bloodbath as the selling intensified and stocks were offered all day. Not one break.
The Dow Jones Industrial Average traded lower by 368.03 points, or 1.05%, to close at 34,792.76. The S&P 500 dropped 1.48% to 4,393.66, and the Nasdaq Composite slid 2.07% to 13,174.65.
The story was all about rates: US 10 Year yield hit 2.95% at some point and closed at 2.90%
Equities started on the backfoot and then Fed speakers put fuel on the fire.
*POWELL: 50 BPS HIKE WILL BE ON THE TABLE FOR MAY FOMC MEETING
*POWELL: WE ARE GOING TO BE RAISING RATES, GETTING EXPEDITIOUSLY TO MORE NEUTRAL, THEN TO TIGHT POLICY IF APPROPRIATE
*POWELL: IT MAY BE PEAK WAS IN MARCH, BUT WON’T COUNT ON IT
*BULLARD: HIKES PARTIALLY PRICED IN, REST WILL COME WHEN WE ACT
Safe to say stocks did not like this nor did the growth ones.
Tech has been the pillar of equities and is the one getting hammered for the past few months, as they are very sensitive to rates.
Sentiment in the surveys is very bearish but not positioning – which worries me a lot although we bought stocks today as we start our swing portfolio
Nasdaq ETF ($QQQ) is below the 20, 50 (dotted yellow), and 200-day moving averages — technically very bearish. It is an ugly candle today on higher than average volume – not the kind of setup to be long (reminder to myself who initiated 4 positions at the close in the swing portfolio ).
S&P 500 was holding better in the past few sessions due to energy but everything got shot today
The Russell 200 (IWM) could not hold its 50 MA
Apple ($AAPL) could not hold its 50 MA but does not look too bad compared to other charts
Tesla (TSLA) had good earning yesterday and was up 11% for the day but finished up 3% only but above its 50 MA.
ARK Innovation ($ARKK) got crushed, down 5% and is close to its 52 week low from March. Ugly chart. Its biggest component is TSLA and things could have been worse. Cathie Wood is still adding to pendamic stocks concentrating its positions and trimming TSLA. We bought half a position of ARKK today at 53.44 in the swing portfolio looking for a technical bounce to 60 at some point. But ARKK could go to low 40s where we would have a full position. Will see how it pans out.
Commodities and commodity stocks.
Commodities was the bright spot since December. Today, most commodity stocks got hit pretty bad. This is frightening as everything was sold after the more hawkish talk of Fed officials.
Alcoa Corporation ($AA) broke its 50 SMA (dotten yellow line).
Same goes for Vale ($VALE), the Brazilian mining stock who lost its 50 MA.
Same goes for Rio Tinto ($RIO) the world’s second-largest metals and mining corporation.
Let’s take a look at Oil and Gas. West Texas Intermediate crude for June delivery rose $1.60, or 1.6%, to settle at $103.79 a barrel. Brent crude for June delivery rose $1.53 to $108.33 a barrel.
Oil stock? Got crushed.
Devon Energy ($DVN) was down 5% after hitting 52 week high during the session
ConocoPhilips ($COP) down 3%
Chevron ($CVX) was down 4.6%
Good luck tomorrow – futures look bad
Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.