Daily Market Update for 6/1
Summary: The Dow Jones Industrial Average attempted to set a record, but the small-cap Russell 2000 performed the best among the major indices today. As for the Nasdaq, the first day of the summer months started with a rally but faded quickly and continued last week's sideways moves.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Tuesday, June 1, 2021
Facts: -0.09%, Volume lower, Closing range: 37%, Body: 59%
Good: Higher high, advance/decline ratio above 1.0, support at 13,700
Bad: Low closing range, faded from morning rally to a lower low
Highs/Lows: Higher high, lower low
Candle: Outside day, thick red body with a tiny upper wick and longer lower wick.
Advanced/Decline: 1.32, more advancing stocks than declining stocks.
Indexes: SPX (-0.05%), DJI (+0.13%), RUT (+1.14%), VIX (+6.68%)
Sectors: Energy (XLE +3.85%) and Real Estate (XLRE +1.71%) were top. Utilities (XLU -0.61%) and Health (XLV -1.64%) were bottom.
Expectation: Sideways or Lower
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Market Overview
The Dow Jones Industrial Average attempted to set a record, but the small-cap Russell 2000 performed the best among the major indices today. As for the Nasdaq, the first day of the summer months started with a rally but faded quickly and continued last week's sideways moves.
The Nasdaq closed the day down -0.09% on lower volume. The opening price was nearly the high of the day, but then the index dropped to 13,700 before finding any support. That formed a 59% red body under a barely visible upper wick. The lower wick developed after the morning selling turned to afternoon buying. Despite the slight decline, there were more stocks advancing than stocks declining.
The Russell 2000 (RUT) closed the day with a +1.14% gain. The Dow Jones Industrial Average (DJI) was heading toward a new all-time high close before it reversed and ended lower, advancing just +0.13% for the day. The S&P 500 (SPX) closed with a -0.05% gain.
The VIX volatility index rose +6.68%.
Energy (XLE +3.85%) and Real Estate (XLRE +1.71%) were top. Growth in fuel demand sent oil prices higher and helped the Energy sector top the list today. Utilities (XLU -0.61%) and Health (XLV -1.64%) were at the bottom of the sector list.
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Economic Indicators
The US Dollar (DXY) rose +0.10%.
The US 30y, 10y, and 2y Treasury yields advanced.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (WOOD) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -1.74%. Ethereum (ETHUSD) declined -2.70%.
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Investor Sentiment
The put/call ratio dropped to 0468. 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. Below that level is overly bullish.
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Market Leaders
Of the four largest mega-caps, only Alphabet (GOOGL) advanced today, gaining +1.03%. Microsoft (MSFT) declined -0.91% and dropped back below its 21d EMA and 50d MA lines. Amazon (AMZN) continued to get resistance at its declining 21d EMA, losing -0.14% today. Apple (AAPL) declined -0.26% and is trading below both of the key moving average lines.
Toyota Motor (TM ), Exxon Mobil (XOM), Chevron (CVX), and Alibaba (BABA) topped the mega-cap list, all with greater than 2.5% gains. At the bottom of the list were Johnson & Johnson (JNJ), Adobe (ADBE), Procter & Gamble (PG), and Nike (NKE).
The majority of the daily update growth list declined today, but there were some gainers. The Chinese stocks topped the list, with NIO (NIO), UP Fintech (TIGR), JD.com (JD), and Ehang Holdings (EH) performing the best. FUTU (FUTU) and Alibaba (BABA) were the fifth and sixth. At the bottom of the list were Beyond Meat (BYND), GrowGeneration (GRWG), Solar Edge (SEDG), and Enphase (ENPH).
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Looking ahead
Some more updates from the Federal Reserve come on Wednesday with the release of the Beige book and comments from Fed member Raphael Bostic in the afternoon. API Weekly Crude oil stock updates come after market close.
Advanced Auto Parts (AAP) will release earnings. Otherwise, there are not many interesting earning reports for the daily update.
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Trends, Support, and Resistance
The index continues to hold above the 13,600 - 13,700 area after testing the area in the early morning dip.
Following the five-day trend-line would result in a +0.54% gain on Wednesday.
The one-day trend line points to a -0.04% sideways move.
Following the trend-line from the 4/2 high would result in a -1.71% decline for tomorrow.
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Wrap-up
It wasn't an inspiring start to the month of June. Certainly, there were things to watch, from the sale of Cloudera (CLDR) to the continued resurgence of the meme stocks of AMC (AMC) and GameStop (GME). The cryptocurrencies settled down a bit and are starting to form some nice coils on lower volume. But overall, it was a mixed day with a sideways move in the indices.
Based on the failed rally attempt in the morning and overall bearish candle, the expectation is for sideways or lower tomorrow. That's been a consistent expectation the past week, even among higher highs and higher lows. Unless something excites investors back into big tech and growth stocks, we can continue to expect this sideways movement heading into the early summer.
Stay healthy and trade safe!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, June 1, 2021
Facts: -0.09%, Volume lower, Closing range: 37%, Body: 59%
Good: Higher high, advance/decline ratio above 1.0, support at 13,700
Bad: Low closing range, faded from morning rally to a lower low
Highs/Lows: Higher high, lower low
Candle: Outside day, thick red body with a tiny upper wick and longer lower wick.
Advanced/Decline: 1.32, more advancing stocks than declining stocks.
Indexes: SPX (-0.05%), DJI (+0.13%), RUT (+1.14%), VIX (+6.68%)
Sectors: Energy (XLE +3.85%) and Real Estate (XLRE +1.71%) were top. Utilities (XLU -0.61%) and Health (XLV -1.64%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Dow Jones Industrial Average attempted to set a record, but the small-cap Russell 2000 performed the best among the major indices today. As for the Nasdaq, the first day of the summer months started with a rally but faded quickly and continued last week's sideways moves.
The Nasdaq closed the day down -0.09% on lower volume. The opening price was nearly the high of the day, but then the index dropped to 13,700 before finding any support. That formed a 59% red body under a barely visible upper wick. The lower wick developed after the morning selling turned to afternoon buying. Despite the slight decline, there were more stocks advancing than stocks declining.
The Russell 2000 (RUT) closed the day with a +1.14% gain. The Dow Jones Industrial Average (DJI) was heading toward a new all-time high close before it reversed and ended lower, advancing just +0.13% for the day. The S&P 500 (SPX) closed with a -0.05% gain.
The VIX volatility index rose +6.68%.
Energy (XLE +3.85%) and Real Estate (XLRE +1.71%) were top. Growth in fuel demand sent oil prices higher and helped the Energy sector top the list today. Utilities (XLU -0.61%) and Health (XLV -1.64%) were at the bottom of the sector list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) rose +0.10%.
The US 30y, 10y, and 2y Treasury yields advanced.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (WOOD) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -1.74%. Ethereum (ETHUSD) declined -2.70%.
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Investor Sentiment
The put/call ratio dropped to 0468. 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. Below that level is overly bullish.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Of the four largest mega-caps, only Alphabet (GOOGL) advanced today, gaining +1.03%. Microsoft (MSFT) declined -0.91% and dropped back below its 21d EMA and 50d MA lines. Amazon (AMZN) continued to get resistance at its declining 21d EMA, losing -0.14% today. Apple (AAPL) declined -0.26% and is trading below both of the key moving average lines.
Toyota Motor (TM ), Exxon Mobil (XOM), Chevron (CVX), and Alibaba (BABA) topped the mega-cap list, all with greater than 2.5% gains. At the bottom of the list were Johnson & Johnson (JNJ), Adobe (ADBE), Procter & Gamble (PG), and Nike (NKE).
The majority of the daily update growth list declined today, but there were some gainers. The Chinese stocks topped the list, with NIO (NIO), UP Fintech (TIGR), JD.com (JD), and Ehang Holdings (EH) performing the best. FUTU (FUTU) and Alibaba (BABA) were the fifth and sixth. At the bottom of the list were Beyond Meat (BYND), GrowGeneration (GRWG), Solar Edge (SEDG), and Enphase (ENPH).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Some more updates from the Federal Reserve come on Wednesday with the release of the Beige book and comments from Fed member Raphael Bostic in the afternoon. API Weekly Crude oil stock updates come after market close.
Advanced Auto Parts (AAP) will release earnings. Otherwise, there are not many interesting earning reports for the daily update.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index continues to hold above the 13,600 - 13,700 area after testing the area in the early morning dip.
Following the five-day trend-line would result in a +0.54% gain on Wednesday.
The one-day trend line points to a -0.04% sideways move.
Following the trend-line from the 4/2 high would result in a -1.71% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It wasn't an inspiring start to the month of June. Certainly, there were things to watch, from the sale of Cloudera (CLDR) to the continued resurgence of the meme stocks of AMC (AMC) and GameStop (GME). The cryptocurrencies settled down a bit and are starting to form some nice coils on lower volume. But overall, it was a mixed day with a sideways move in the indices.
Based on the failed rally attempt in the morning and overall bearish candle, the expectation is for sideways or lower tomorrow. That's been a consistent expectation the past week, even among higher highs and higher lows. Unless something excites investors back into big tech and growth stocks, we can continue to expect this sideways movement heading into the early summer.
Stay healthy and trade safe!
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