Massive Rally Partially Retraces on Thursday as SPX, NDX Closed Lower...Consumer Staples Lead Sectors...EPS Season Starts Friday BMO JPM, MS, WFC, BLK, BK...

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SPX -188.85, 5,268, a 39.8% correction/breakout test, opened lower after a better-than-expected CPI Report: CPI M/M -0.1% vs 0.1% exp and Y/Y 2.4% vs. 2.6% exp. 

                                    Core CPI M/M 0.1% vs 0.3% exp and Y/Y 2.8% vs. 3.0% exp.

The /ES futures did move up about 40 points on the CPI Report but quickly fell back and continued to move lower throughout the trading day as traders chose to cash in some one-day gains from Wednesday’s massive rally.

Thursday was a pause or retracement day after a major four standard deviation rally yesterday.  The fact that today’s retracement was smaller in size than Wednesday’s rally is positive.  The SPY fell below but rallied to close above Monday’s high is another positive and indicates that institutional buyers were buying this afternoon, which can also be seen in the lower shadow on today’s candle.

Breadth weakened as exchange and index advancers decreased significantly from Wednesday.  Net change declining capital was large in both the NDX and SPX, but one-third the size of net advancing capital on Wednesday.  The VIX +7.10 rose to 40.72.

The DJI, 39,593 -2.50%, opened lower and closed lower.  NDX -4.19% retraced 34.8% of Wednesday’s rally.

EPS season unofficially starts on Friday with six SPX companies reporting BMO including major financial stocks JPM, MS, WFC, BLK and BK.

TSLA -19.80, -7.27%, 39.3% retracement of Wednesday’s gain.  

Mega caps BRK/B, MSFT, GOOGL, AAPL, TSM, AMZN, NVDA, META, AVGO TSLA fell on Thursday. 

SPY down 24.04 at 524.58, 162.3 million shares, above average volume, did re-close above the high of the low day

VIX up 7.10 at 40.72

QQQ down 19.82 at 446.18

UNH, VZ, KO, WMT led the DJIA, 6 advancers, -19

NEM, MKTX, ERIE, KR led the SPX, 75 advancers,

EA, EXC, ORLY, ROST led the NDX, 9 advancers

Up:

Down: DIA, IWM, QQQ, SPY,

The SPY MFC green line pointed up to 24.9 and is short-term bullish. +7.3.

One of eleven sectors was higher on Thursday, led by XLP, XLU and XLRE. 

Uptrend sectors: 

Neutral sectors: XLP, XLC, XLF, XLU, XLY,

Down trend sectors: XLV, XLRE, XLE, XLI, XLK, XLB,

The 6-month intermediate trend is down.  The ten-day trend is down.

3-month Intermediate Term Market Trend:  Down

3-day Short Term Market Trend:  Up

9 of 100 NDX stocks closed higher on Thursday.

14 NDX stocks are above their 30 DMA: EXC, CPRT, AXON, CCEP, CDNS, COST, CRWD, CTAS, KDP, MDLZ, MNST, PLTR, ROST, ORLY,

NDX Stocks to Watch on Friday:

Moving Above 30 DMA = 1

ORLY,

Moving Below 30 DMA = 17

ADSK, AMAT, AVGO, BKNG, CEG, CSGP, DASH, FAST, FTNT, ISRG, KLAC, MSFT, MSTR, NVDA, TSLA, TTWO, ZS,

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