Daily Market Update for 2/5
Trend lines drawn from the 10/30 bottom (67d), 2/1 (5d) and today 2/5 (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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Friday, February 5, 2021
Facts: +0.57%, Volume lower, Closing range: 81%, Body: 27%
Good: New all-time high, not overly heated gain
Bad: Some pullback in the afternoon
Highs/Lows: Higher high, higher low
Candle: Thin body in upper half of the candle, longer lower wick from morning dip.
Advance/Decline: 1.95, two advancing stocks for every declining stock
Indexes: SPX (+0.39%), DJI (+0.30%), RUT (+1.40%), VIX (-4.13%)
Sectors: Materials (XLB +1.72%) and Communications (XLC +1.26%) were top. Technology (XLK -0.22%) was the bottom sector for the day.
Expectation: Higher
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Market Overview
The markets topped a bullish week with one more gain on Friday. Every day this week produced a higher high and a higher low on the Nasdaq. The broad market rally continued despite disappointing employment data as investors hope the data will accelerate the stimulus bill through congress.
The index closed with a +0.57% gain on lower volume. The closing range was 81%. The long lower wick, created by a morning dip right after open, is below a 27% body. The opening price became support in the afternoon as the index tested the area twice. There were two advancing stocks for every declining stock.
The S&P 500 (SPX) and Dow Jones Industrial (DJI) gained +0.39% and +0.30%. The Russell 2000 (RUT) formed its second Marubozu White candle in as many days, gaining 1.40%. The bullish candle had no upper or lower wick with the open being the low of the day and the close being the high of the day.
The VIX declined another -4.13%.
Materials (XLB +1.72%) and Communications (XLC +1.26%) were the top sectors of the day. Technology (XLK -0.22%) was the only loosing sector for the day.
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Economic Indicators
The US Dollar (DXY) declined -0.53% for the day, possibly due to the disappointing economic data. The US 30y and 10y treasury bond yields rose while the US 2y declined sharply. The yield curve continues to steepen since the beginning of the year. High Yield Corporate Bond (HYG) prices rose for another day.
Silver (SILVER) and Gold (GOLD) both advanced for the day. Crude Oil (CRUDEOIL1!) futures continued to climb higher. Timber (WOOD), Copper (COPPER1!), and Aluminum (ALI1!) all advanced.
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Investor Sentiment
The put/call ratio declined to 0.578. 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
Alphabet (GOOGL) added to recent gains with a +1.71% advanced. Amazon (AMZN) was up +0.63% as the market moves past this week's news. Microsoft (MSFT) had a small gain of +0.08% as the stock consolidates a bit on lower volume. Apple (AAPL) declined -0.46%. All four are trading above the key moving average lines, but below their all-time highs.
Abbott Laboratories (ABT) was the leading mega-cap of the day with a +3.58% gain. ABT was following by Exxon Mobil (XOM +3.35%), Nike (NIKE +3.19%) and Toyota Motor (TM +1.92%).
Digital Turbine (APPS) added to yesterday's big gain with a 14.11% advance today. SNAP (SNAP) rose +9.14% even after selling off -10% in yesterday's post market reaction to earnings. Magnite (MGNI) rose +26.25%. Peloton (PTON) declined -5.86% on warnings of continued slow delivery to new customers.
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Looking ahead
There is not much economic news scheduled for Monday. However watch for updates on the Stimulus bill over the weekend.
SoftBank Group will announce earnings on Monday. Timing is not listed, but it's likely to be before US markets open. Chegg (CHGG) will release earnings after market close.
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Trends, Support and Resistance
The five-day trend line points to a +1.12% gain for Monday. The one-day trend is a bit under that line and points to a +0.54% gain.
The long-term trend line from the 10/30 bottom points to a small -0.58% pullback.
If there is further downside, the 21d EMA line offers an area of support and is -3.54% below Friday's close. 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
It was a positive end to a great week. Time to use the weekend to relax and enjoy the gains.
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=-
Friday, February 5, 2021
Facts: +0.57%, Volume lower, Closing range: 81%, Body: 27%
Good: New all-time high, not overly heated gain
Bad: Some pullback in the afternoon
Highs/Lows: Higher high, higher low
Candle: Thin body in upper half of the candle, longer lower wick from morning dip.
Advance/Decline: 1.95, two advancing stocks for every declining stock
Indexes: SPX (+0.39%), DJI (+0.30%), RUT (+1.40%), VIX (-4.13%)
Sectors: Materials (XLB +1.72%) and Communications (XLC +1.26%) were top. Technology (XLK -0.22%) was the bottom sector for the day.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The markets topped a bullish week with one more gain on Friday. Every day this week produced a higher high and a higher low on the Nasdaq. The broad market rally continued despite disappointing employment data as investors hope the data will accelerate the stimulus bill through congress.
The index closed with a +0.57% gain on lower volume. The closing range was 81%. The long lower wick, created by a morning dip right after open, is below a 27% body. The opening price became support in the afternoon as the index tested the area twice. There were two advancing stocks for every declining stock.
The S&P 500 (SPX) and Dow Jones Industrial (DJI) gained +0.39% and +0.30%. The Russell 2000 (RUT) formed its second Marubozu White candle in as many days, gaining 1.40%. The bullish candle had no upper or lower wick with the open being the low of the day and the close being the high of the day.
The VIX declined another -4.13%.
Materials (XLB +1.72%) and Communications (XLC +1.26%) were the top sectors of the day. Technology (XLK -0.22%) was the only loosing sector for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.53% for the day, possibly due to the disappointing economic data. The US 30y and 10y treasury bond yields rose while the US 2y declined sharply. The yield curve continues to steepen since the beginning of the year. High Yield Corporate Bond (HYG) prices rose for another day.
Silver (SILVER) and Gold (GOLD) both advanced for the day. Crude Oil (CRUDEOIL1!) futures continued to climb higher. Timber (WOOD), Copper (COPPER1!), and Aluminum (ALI1!) all advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.578. 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
Alphabet (GOOGL) added to recent gains with a +1.71% advanced. Amazon (AMZN) was up +0.63% as the market moves past this week's news. Microsoft (MSFT) had a small gain of +0.08% as the stock consolidates a bit on lower volume. Apple (AAPL) declined -0.46%. All four are trading above the key moving average lines, but below their all-time highs.
Abbott Laboratories (ABT) was the leading mega-cap of the day with a +3.58% gain. ABT was following by Exxon Mobil (XOM +3.35%), Nike (NIKE +3.19%) and Toyota Motor (TM +1.92%).
Digital Turbine (APPS) added to yesterday's big gain with a 14.11% advance today. SNAP (SNAP) rose +9.14% even after selling off -10% in yesterday's post market reaction to earnings. Magnite (MGNI) rose +26.25%. Peloton (PTON) declined -5.86% on warnings of continued slow delivery to new customers.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
There is not much economic news scheduled for Monday. However watch for updates on the Stimulus bill over the weekend.
SoftBank Group will announce earnings on Monday. Timing is not listed, but it's likely to be before US markets open. Chegg (CHGG) will release earnings after market close.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line points to a +1.12% gain for Monday. The one-day trend is a bit under that line and points to a +0.54% gain.
The long-term trend line from the 10/30 bottom points to a small -0.58% pullback.
If there is further downside, the 21d EMA line offers an area of support and is -3.54% below Friday's close. 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
It was a positive end to a great week. Time to use the weekend to relax and enjoy the gains.
Stay healthy and take care!
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