Daily Market Update for 1/5
Trend lines drawn from the 10/30 bottom (45d), 12/29 (5d) and today 1/5 (1d).
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog.
I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time.
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Tuesday, January 5, 2021
There must be some kind of way outta here
Facts: +0.95%, Volume higher, Closing range: 94%, Body: 94%
Good: Solid day of gains, no lower wick
Bad: Nothing
Highs/Lows: Lower high, higher low
Candle: Inside day, bullish green body with no lower wick and tiny upper wick
Advance/Decline: 2.39, More than two advancing stocks for every declining stock
Indexes: SPX (+0.71%), DJI (+0.55%), RUT (+1.71%), VIX (-6.04%)
Sectors: Energy (XLE +4.48%) and Materials (XLB +2.25%) were top. Utilities (XLU -0.02%) and Real Estate (XLRE -0.11%) were worst performing
Expectation: Sideways or Higher
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Market Overview
The Nasdaq followed yesterday's bearish session with a bullish rebound today. There is still work to do to get back to all-time highs, but the gains were steady throughout the day as the index never revisited the morning low. The index closed the day with a +0.95% gain on higher volume, closing range of 94% and a thick green body of 94%. The lower wick doesn't exist and the upper wick is very tiny. More than two stocks advanced for every declining stock.
All major indexes had gains for the day. The S&P 500, Dow Jones Industrial and Russell 200 had similar bullish inside days. The VIX dropped back -6.04%, but still at an elevated level.
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Economic Indicators
The US Dollar (DXY) declined for another day as it sits within a support range from early 2018. US Treasury 30y (US30Y), 10y (US10Y)and 2y (US02Y) bond yields all gained for the day. Corporate Bonds (HYG) prices stayed about the same while short term treasury bond (IEI) prices dropped.
Silver (SILVER) and Gold (GOLD) both increased for a second day. Crude Oil (CRUDEOIL1!) futures advanced. Timber (WOOD) is up but moving in a sideways trend. Copper (COPPER1!) and Aluminum (ALI1!) advanced.
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Investor Sentiment
The put/call ratio dropped to 0.592. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
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Market Leaders
The biggest four mega-caps all advanced for the day. Apple (AAPL) and Amazon (AMZN) closed above its 21d EMA. Microsoft (MSFT) and Alphabet (GOOGL)closed below the 21d EMA but above the 50d MA.
Alibaba (BABA) was one of the top mega-cap gainers with a 5.51% advance. Nvidia, Intel and PayPal were the other large mega-caps with top gains for the day. Visa (V) and Mastercard (M) were at the bottom of the mega-cap list with >1% losses.
Many growth stocks advanced for the day with Chinese stocks FUTU Holdings (FUTU) and JD.Com (JD) topping the list at 19.76% and 10.62% gains respectively. Several others including FVRR, PENN and DKNG all had huge gains.
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Looking ahead
Tomorrow morning, ADP Nonfarm Employment data for December will be released before market open. Additional pricing index data will be released just after open. Crude Oil Inventories will be updated at 10:30. Finally, the FOMC Meeting minutes from the December meeting will be released in the afternoon.
No notable earnings announcements are scheduled for Wednesday.
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Trends, Support and Resistance
The long-term trend line from the 10/30 bottom points to a +1.97% gain.
The one-day trend points to a +0.66% gain.
The five-day line points to a -0.99% loss.
The index held the 12,550 area today. If it passes that area, the next support area is 12,250.
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Wrap-up
The bullish reversal from yesterday's bearish day was a pleasant surprise today. Possibly buoyed by positive Manufacturing data that shows growth in economic activity. Additional data released tomorrow could strengthen that positive outlook.
All eyes will be on the Senate race as Georgia is starting to count votes as I write this. The outcome could have an impact on how investors position themselves for the next year. With Biden in the Whitehouse, a Democratic controlled Senate would have a very different impact on the markets than a Republican controlled Senate.
Stay healthy and take care!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog.
I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, January 5, 2021
There must be some kind of way outta here
Facts: +0.95%, Volume higher, Closing range: 94%, Body: 94%
Good: Solid day of gains, no lower wick
Bad: Nothing
Highs/Lows: Lower high, higher low
Candle: Inside day, bullish green body with no lower wick and tiny upper wick
Advance/Decline: 2.39, More than two advancing stocks for every declining stock
Indexes: SPX (+0.71%), DJI (+0.55%), RUT (+1.71%), VIX (-6.04%)
Sectors: Energy (XLE +4.48%) and Materials (XLB +2.25%) were top. Utilities (XLU -0.02%) and Real Estate (XLRE -0.11%) were worst performing
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Nasdaq followed yesterday's bearish session with a bullish rebound today. There is still work to do to get back to all-time highs, but the gains were steady throughout the day as the index never revisited the morning low. The index closed the day with a +0.95% gain on higher volume, closing range of 94% and a thick green body of 94%. The lower wick doesn't exist and the upper wick is very tiny. More than two stocks advanced for every declining stock.
All major indexes had gains for the day. The S&P 500, Dow Jones Industrial and Russell 200 had similar bullish inside days. The VIX dropped back -6.04%, but still at an elevated level.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined for another day as it sits within a support range from early 2018. US Treasury 30y (US30Y), 10y (US10Y)and 2y (US02Y) bond yields all gained for the day. Corporate Bonds (HYG) prices stayed about the same while short term treasury bond (IEI) prices dropped.
Silver (SILVER) and Gold (GOLD) both increased for a second day. Crude Oil (CRUDEOIL1!) futures advanced. Timber (WOOD) is up but moving in a sideways trend. Copper (COPPER1!) and Aluminum (ALI1!) advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio dropped to 0.592. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The biggest four mega-caps all advanced for the day. Apple (AAPL) and Amazon (AMZN) closed above its 21d EMA. Microsoft (MSFT) and Alphabet (GOOGL)closed below the 21d EMA but above the 50d MA.
Alibaba (BABA) was one of the top mega-cap gainers with a 5.51% advance. Nvidia, Intel and PayPal were the other large mega-caps with top gains for the day. Visa (V) and Mastercard (M) were at the bottom of the mega-cap list with >1% losses.
Many growth stocks advanced for the day with Chinese stocks FUTU Holdings (FUTU) and JD.Com (JD) topping the list at 19.76% and 10.62% gains respectively. Several others including FVRR, PENN and DKNG all had huge gains.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tomorrow morning, ADP Nonfarm Employment data for December will be released before market open. Additional pricing index data will be released just after open. Crude Oil Inventories will be updated at 10:30. Finally, the FOMC Meeting minutes from the December meeting will be released in the afternoon.
No notable earnings announcements are scheduled for Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The long-term trend line from the 10/30 bottom points to a +1.97% gain.
The one-day trend points to a +0.66% gain.
The five-day line points to a -0.99% loss.
The index held the 12,550 area today. If it passes that area, the next support area is 12,250.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The bullish reversal from yesterday's bearish day was a pleasant surprise today. Possibly buoyed by positive Manufacturing data that shows growth in economic activity. Additional data released tomorrow could strengthen that positive outlook.
All eyes will be on the Senate race as Georgia is starting to count votes as I write this. The outcome could have an impact on how investors position themselves for the next year. With Biden in the Whitehouse, a Democratic controlled Senate would have a very different impact on the markets than a Republican controlled Senate.
Stay healthy and take care!
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