Stocks Give Back Big Gains Amid Rising Rates, Stronger U.S. Dollar
2022.06.07 11:31
The S&P 500 finished higher yesterday by 31 bps; it wasn’t a good day. The S&P 500 had been sharply higher to start the day, rising by nearly 1.5%, and by lunchtime, almost that whole rally was gone.
The turn lower in the market came around when the 10-year rates surged above 3%, and the dollar index started to move up. That pretty much sealed the market’s fate for the day.
S&P 500 Index, 5-Min Chart
If you are looking for a stock market rally, the time for that may be running out. First off, the S&P 500 broke the uptrend that I noted over the weekend, which was part of that bear flag. If this is a flag pattern, then the index should start to drift lower soon, with gaps at 4,050 and 3,980 that are still open.
S&P 500 Index, 1-Hr Chart
NASDAQ
Additionally, the QQQ ETF has a bearish rising broadening wedge pattern, along with a potential head and shoulder pattern. A drop below $305 is all it should take for the ETF to start moving down.
QQQ ETF 1-Hr Chart
Dollar
The big move for the dollar came against the yen yesterday, with the dollar climbing to its highest level since 2002. The dollar may continue to strengthen vs. the yen in the weeks ahead, with the 2002 highs around $135.
USD/JPY Weekly Chart
Costco
Costco (NASDAQ:COST) has filled the gap from its May 18 plunge. The trend for Costco was clearly lower before the gap was created, and I think that means the stock should continue that prior trend lower now, and probably head back towards its May lows.
Costco Daily Chart
JP Morgan
JPMorgan (NYSE:JPM) has seen resistance at $132 remain very firm, the stock was weaker yesterday, and with a huge gap to fill around $123 from the May 23 rally, I can’t help but think that gap will fill soon.
JPMorgan Daily Chart
DocuSign
DocuSign (NASDAQ:DOCU) has a nice bullish divergence going for it right now, with a rising RSI and weak stock price. That tells us that momentum for DocuSign is actually bullish, and if we get some follow through here, the next major level of resistance doesn’t come until $102.
Docusign Daily Chart
Have a good one
