Daily Market Update for 2/1
Trend lines drawn from the 10/30 bottom (63d), 1/26 (5d) and today 2/1 (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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Monday, February 1, 2021
Facts: +2.55%, Volume lower, Closing range: 91%, Body: 59%
Good: Close back above the 21d EMA, steady climb after morning dip
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Thick green body with longer lower wick
Advance/Decline: 3.19, three advancing stocks for every declining stock
Indexes: SPX (+1.61%), DJI (+0.76%), RUT (+2.53%), VIX (-8.61%)
Sectors: Consumer Discretionary (XLY +2.60%) and Technology (XLK +2.51%) were top. Consumer Staples (XLP +0.09%) and Health Services (XLV +0.38%) were bottom.
Expectation: Sideways or Higher
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Market Overview
February kicked off with broad gains across the Nasdaq. The index took a short dip in the morning and then headed upward for the rest of the day. Manufacturing data released after market open was a little lower than analyst expectations, but still high compared to the two-year monthly average.
The Nasdaq closed the day with a +2.55% gain on lower volume. The closing range of 91% and the 59% green body show the strong buying that occurred throughout the day after a morning dip. The index closed above the 21d EMA, a key area of support. Many participants benefited from the gains as there were three advancing stocks for every declining stock.
The S&P 500 (SPX) advanced +1.61% while the Dow Jones Industrial (DJI) gained +0.76%. The Russell 2000 (RUT) advanced +2.53%.
All sectors gained for the day. Consumer Discretionary (XLY +2.60%) and Technology (XLK +2.51%) were led the sector list. Real Estate (XLRE +2.26%) was also near the top. Consumer Staples (XLP +0.09%), Health Services (XLV +0.38%), and Utilities (XLU +0.48%) were at the bottom.
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Economic Indicators
The US Dollar (DXY) gained +0.44% for the day. US 30y and 10y treasury bond yields gained for the day while the 2y treasury bond yields declined. High Yields Corporate bond (HYG) prices declined.
Silver (SILVER) gained another 7%, fueled by retail investors targeting the commodity. Gold (GOLD) also advanced for the day. Crude Oil (CRUDEOIL1!) futures wend up. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both declined.
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Investor Sentiment
The put/call ratio declined back to 0.567, signaling bullish optimism. 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
All four of the biggest mega-caps gained with Amazon (AMZN) advancing the most with a +4.26% gain. Microsoft (MSFT) and Alphabet (GOOGL) also had big gains with +3.32% and +3.60% respectively. Apple (AAPL) had a smaller gain at +1.65%, which was enough to close above its 21d EMA.
Tesla (TSLA) was the top mega-cap of the day with a +5.83% gain. Very few mega-caps declined for the day.
Growth stocks also did very well. Magnite (MGNI), Fiverr (FVRR) and SNAP (SNAP) were among top gainers with +12.59%, +9.38% and +7.39% advances. Chinese stocks Ehang Holdings (EH), Up Fintech (TIGR) and FUTU Holdings (FUTU) gained +22.81%, +18.50% and +5.62%.
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Looking ahead
FOMC Members Mester and Williams will speak tomorrow afternoon.
API Weekly Crude Oil Stock numbers will be released after market close.
An update on Manufacturing activity for January will be released as the market opens on Monday. The last update showed Manufacturing activity at a record high level.
Alibaba (BABA), Pfizer (PFE), United Parcel Service (UPS) and Exxon Mobil (XOM) will release earnings before market open. Amazon (AMZN) and Alphabet (GOOGL) will release earnings after market close. There are many other earnings releases schedule for tomorrow, so be sure to check your portfolio for earnings events.
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Trends, Support and Resistance
If Monday's one-day trend line continues into Tuesday, it points to a +2.33% gain. The long-term trend line from the 10/30 bottom points to a +1.77% gain.
The five-day trend line is pointing to a -2.32% loss which would be below the 21d EMA again.
The 21d EMA line has provided support before Friday's close below the line. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250.
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Wrap-up
The Nasdaq made a nice recovery on this Monday after a bearish move in the previous week. Another day or two of gains would confirm the reversal and put us back on a path for higher highs.
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=-
Monday, February 1, 2021
Facts: +2.55%, Volume lower, Closing range: 91%, Body: 59%
Good: Close back above the 21d EMA, steady climb after morning dip
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Thick green body with longer lower wick
Advance/Decline: 3.19, three advancing stocks for every declining stock
Indexes: SPX (+1.61%), DJI (+0.76%), RUT (+2.53%), VIX (-8.61%)
Sectors: Consumer Discretionary (XLY +2.60%) and Technology (XLK +2.51%) were top. Consumer Staples (XLP +0.09%) and Health Services (XLV +0.38%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
February kicked off with broad gains across the Nasdaq. The index took a short dip in the morning and then headed upward for the rest of the day. Manufacturing data released after market open was a little lower than analyst expectations, but still high compared to the two-year monthly average.
The Nasdaq closed the day with a +2.55% gain on lower volume. The closing range of 91% and the 59% green body show the strong buying that occurred throughout the day after a morning dip. The index closed above the 21d EMA, a key area of support. Many participants benefited from the gains as there were three advancing stocks for every declining stock.
The S&P 500 (SPX) advanced +1.61% while the Dow Jones Industrial (DJI) gained +0.76%. The Russell 2000 (RUT) advanced +2.53%.
All sectors gained for the day. Consumer Discretionary (XLY +2.60%) and Technology (XLK +2.51%) were led the sector list. Real Estate (XLRE +2.26%) was also near the top. Consumer Staples (XLP +0.09%), Health Services (XLV +0.38%), and Utilities (XLU +0.48%) were at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) gained +0.44% for the day. US 30y and 10y treasury bond yields gained for the day while the 2y treasury bond yields declined. High Yields Corporate bond (HYG) prices declined.
Silver (SILVER) gained another 7%, fueled by retail investors targeting the commodity. Gold (GOLD) also advanced for the day. Crude Oil (CRUDEOIL1!) futures wend up. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both declined.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined back to 0.567, signaling bullish optimism. 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
All four of the biggest mega-caps gained with Amazon (AMZN) advancing the most with a +4.26% gain. Microsoft (MSFT) and Alphabet (GOOGL) also had big gains with +3.32% and +3.60% respectively. Apple (AAPL) had a smaller gain at +1.65%, which was enough to close above its 21d EMA.
Tesla (TSLA) was the top mega-cap of the day with a +5.83% gain. Very few mega-caps declined for the day.
Growth stocks also did very well. Magnite (MGNI), Fiverr (FVRR) and SNAP (SNAP) were among top gainers with +12.59%, +9.38% and +7.39% advances. Chinese stocks Ehang Holdings (EH), Up Fintech (TIGR) and FUTU Holdings (FUTU) gained +22.81%, +18.50% and +5.62%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
FOMC Members Mester and Williams will speak tomorrow afternoon.
API Weekly Crude Oil Stock numbers will be released after market close.
An update on Manufacturing activity for January will be released as the market opens on Monday. The last update showed Manufacturing activity at a record high level.
Alibaba (BABA), Pfizer (PFE), United Parcel Service (UPS) and Exxon Mobil (XOM) will release earnings before market open. Amazon (AMZN) and Alphabet (GOOGL) will release earnings after market close. There are many other earnings releases schedule for tomorrow, so be sure to check your portfolio for earnings events.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
If Monday's one-day trend line continues into Tuesday, it points to a +2.33% gain. The long-term trend line from the 10/30 bottom points to a +1.77% gain.
The five-day trend line is pointing to a -2.32% loss which would be below the 21d EMA again.
The 21d EMA line has provided support before Friday's close below the line. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The Nasdaq made a nice recovery on this Monday after a bearish move in the previous week. Another day or two of gains would confirm the reversal and put us back on a path for higher highs.
Stay healthy and take care!
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