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Stocks Surge But Are Still Deteriorating Beneath The Surface

By Michael KramerStock MarketsFeb 09, 2022 12:19AM ET
www.investing.com/analysis/stocks-surge-but-are-still-deteriorating-beneath-the-surface-200617564
Stocks Surge But Are Still Deteriorating Beneath The Surface
By Michael Kramer   |  Feb 09, 2022 12:19AM ET
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Stocks finished the day, mostly higher, with the S&P 500 up around 85 points. The index really couldn’t get much beyond 4,520, which is now turning into a powerful level of resistance, and has been that way since mid- last week. A rise above that resistance level sets up a run to around 4,545.

The sellers had been showing up the last three days around 3:15 PM. Yesterday they didn’t show up, which left the index trading flat those last 45 minutes.

I really can’t see anything that gives me a lot of conviction one way or the other. Based on the data I have seen, liquidity remains thin, and spreads are wide. So it wouldn’t take much effort to move this market one way or the other at this point.

S&P 500 1-Hr Chart
S&P 500 1-Hr Chart

In fact, despite a gain in the NASDAQ Composite of more than 1%, there were still more stocks making new lows than new highs. The cumulative chart shows that the indicator is still making new lows, and diverging from the index. In fact, the current pattern is starting to look a lot like the fall of 2018 setup.

NAHL Cumulative Chart
NAHL Cumulative Chart

10-Year

The 10-year rate rose to 1.96% and was just about breaking out at time of writing. The next significant level of resistance comes at 2.15%, but there is no reason this yield can’t push to 2.4% over the next few weeks.

US 10-Yr Yield Daily Chart
US 10-Yr Yield Daily Chart

TIPS

The iShares TIPS Bond ETF (NYSE:TIP) made a new closing low on Tuesday for this cycle, at $123.70. I don’t see why the TIP ETF can’t go back to pre-pandemic levels at $121.80.

iShares TIPS Bond ETF Daily Chart
iShares TIPS Bond ETF Daily Chart

Facebook

Meta Platforms (NASDAQ:FB) was trading below its pre-COVID highs. Pretty remarkable. I think this was just dead money, with a business model that was being called into question. Believe it or not there was a gap at $195 just waiting to be filled.

Meta Platforms Daily Chart
Meta Platforms Daily Chart

Alphabet

Alphabet (NASDAQ:GOOGL) saw its entire gap from last week’s earnings close up. I’m not sure what happens next.

Alphabet 1-Hr Chart
Alphabet 1-Hr Chart

Amazon

Now if Amazon.com (NASDAQ:AMZN) can fill its gap, that would be great. That gap should get filled over time, I don’t see why it shouldn’t.

Amazon 1-Hr Chart
Amazon 1-Hr Chart

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Stocks Surge But Are Still Deteriorating Beneath The Surface
 

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Stocks Surge But Are Still Deteriorating Beneath The Surface

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Comments (3)
Mario tragik
Mario tragik Feb 09, 2022 9:54AM ET
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lol this guy, hope you make a post of what happened when NDX hits 17000 - 18000 range
Ayumastura PinkLady
Ayumastura PinkLady Feb 09, 2022 7:56AM ET
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i think cpi wont meet 7.3% expectation. They put it too high.
Jeff Page
Jeff Page Feb 09, 2022 5:23AM ET
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Thank you for your work.
 
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