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“What you’re thinking is what you’re becoming.” – Muhammad Ali
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Thankfully for US financial markets, they don’t work for the government. Elon Musk told all government employees that they must document five things they’ve accomplished over the last week or resign, so we thought it would be good to see what the markets have accomplished over the last week. Tuesday saw the S&P 500 close at a new all-time high which was followed by another new high on Wednesday. That’s two quick accomplishments. Now, let’s see what else the market has done.
Equities have taken a series of body blows in the three trading days since Wednesday’s high, and like a heavyweight fighter hoping to hang on to the end of the 12th round, the S&P 500 looked likely to make it to the end of the day yesterday and hold above its 50-day moving average (DMA). With less than ten minutes to go in the session, though, sellers unleashed a burst of blows knocking the market down to the mat and finishing the session right near its lows of the day. Holding the 50-DMA for the S&P 500? Not accomplished.
For the Nasdaq 100, a similar song. Unlike the S&P 500, which traded higher for much of the session, the Nasdaq opened positive but almost immediately moved into negative territory and stayed in a standing eight count for much of the session. The late-day decline only pushed it further below its 50-DMA by the time the closing bell rang. Holding the 50-DMA for the Nasdaq 100? Not accomplished.
The 50-DMA has never really been in question for small caps as the Russell 2000 closed below that level in almost every session for the last two months! It’s made attempt after unsuccessful attempt to break above its 50-DMA, but after Friday’s plunge, yesterday it was the 200-DMA that gave way. Back in August and January, the 200-DMA acted as support and the launchpad for a bounce, but this time around, the Russell had no such luck. Holding the 200-DMA for the Russell 2000? Not accomplished.
While not a major index, semiconductors are an import sector for the market, and yesterday the Van Eck Semiconductor ETF (SMH) one-upped the major averages by breaking below both its 50 and 200-DMA. The ETF has been essentially rangebound for the last five months and remains that way even after breaking below both moving averages yesterday. Even if it does set the bar lower heading into the report, this type of weakness heading into Nvidia’s (NVDA) earnings report Wednesday isn’t particularly encouraging, Holding the 50 and 200-DMA for semiconductors? Not accomplished.
Hey Elon, can the market get an extension on that email?
