3 May 2016 – Broad sell-off in market

All the indices were trading lower at the end of the day as the five indices (Dow Transportation, Dow Industrial, Russell 2000, Nasdaq 100 and S&P 500) sold off. US Dollar and oil traded lower at the end of the day. Money went into bonds which is a defensive move and TLT closed higher for the day.

Dow Transportation sold off on market open and found support at the 200 SMA. It bounce and closed with a bearish Marubozu candle. Momentum remains downward. Daily volumetric buying pressure is at 75.9%.

Dow Industrial sold off on market open and range traded during the day to close with a small bearish Marubozu candle below its 21 EMA. Momentum reversed downward. Short term volumetric buying pressure is at 95%. The index is in a monthly Squeeze.

Russell 2000 sold off on market open and range traded for the day. It closed with a bearish Marubozu candle just below its 200 SMA. Pivot momentum remains upward. Volumetric buying pressure is at 83.4%.

Nasdaq 100 traded down in the morning session and recovered in early afternoon session. It sold off in late afternoon trading and closed with a spinning top doji candle. Momentum remains downward. Volumetric buying pressure is at 81.2%. The index is in a monthly Squeeze.

S&P 500 traded down on market open and range traded for the rest of the day to close with a bearish Marubozu candle below its 21 EMA. Momentum has reversed downward. Volumetric buying pressure is at 91.8%. The index is in a monthly Squeeze.

Commodities
Oil (/CL) futures is down at $43.62 per barrel. Gold (/GC) futures is at 1284.6. Silver (/SI) futures is at 17.355. Agriculture (DBA) ETF closed down at 20.88. Commodities (DBC) ETF closed at 14.16.

Bonds
Junk bonds ETF (HYG) closed down at 82.96. Bonds ETF (TLT) traded down to 129.43.

Currencies
USD/JPY is at 107.06. EUR/USD is at 1.1485. The dollar index (/DX) is at 93.165.

Relative Strength – Sectors
On a monthly lookback, the ETFs outperforming the S&P 500 are XLE, XLF, XLB, XLU, XLI, XLY, XLP and XLV respectively.

On a 3-month lookback, the relative strength order are XLE, XLB, XLF, XLY and XLI. Consumer discretionary performed relatively well in a broad market sell-off.

Market Internals
Vix is at made gains at 15.60. Vix futures is at 16.90. Skew is at 125.94. Market sentiment remains slightly bullish. Market breadth is sloping down which means nett losers to gainers. Volumetric accumulation/distribution is sloping downward showing distribution.

The Week Ahead
Market continues to come under selling pressure when there are no positive catalysts. Earnings season has been mixed so far. Bonds are doing well as it is a place to park one’s wealth when the market is selling off. Just about all the 9 sectors in the S&P 500 were sold off. Oil and gold came down as well. The US dollar index did make a small gain. Even gold traded downward where previously, it has been inversely correlated to the market perforance.The prognosis is that market will continue to sustain selling pressure for the coming week.

To YOUR wealth!