Daily Market Update for 11/30
Summary: Lower consumer confidence and elevated Omicron fears sent stocks lower while Jerome Powell piled on with news of an accelerated bond tapering timeline.
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, November 30, 2021
Facts: -1.55%, Volume higher, Closing Range: 23%, Body: 47% Red
Good: Nothing
Bad: Lower high, lower low, decline on much higher volume
Highs/Lows: Lower high, Lower low
Candle: Thick red body in the middle of two long wicks.
Advance/Decline: 0.33, three declining stocks for every advancing stock
Indexes: SPX (-1.90%), DJI (-1.86%), RUT (-1.92%), VIX (+18.42%)
Sector List: Technology (XLK -0.83%) and Consumer Discretionary (XLY -1.35%) at the top. Utilities (XLU -2.92%) and Communications (XLC -3.17%) at the bottom.
Expectation: Lower
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Market Overview
Lower consumer confidence and elevated Omicron fears sent stocks lower while Jerome Powell piled on with news of an accelerated bond tapering timeline.
The Nasdaq declined -1.55% for the day. Volume was higher than the previous day and much higher than the 50d average volume. The candle is long, nearly stretching to yesterday's high and last week's low, with a thick red body covering 47% of the middle. The closing range of 23% is not great, and three stocks declined for every stock that advanced.
The S&P 500 (SPX) declined -1.90%, and the Dow Jones Industrial Average (DJI) fell -1.86%. The Russell 2000 (RUT) dropped another -1.92% and is fast approaching the bottom of its trading range since February 2021. The VIX Volatility Index (VIX) climbed by +18.42%.
All S&P 500 sectors declined for the day. However, Technology (XLK -0.83%) and Consumer Discretionary (XLY -1.35%) faired the best, possibly boosted by news of a new iPhone SE device in the first quarter of 2022. Utilities (XLU -2.92%) and Communications (XLC -3.17%) were the bottom two sectors.
CB Consumer Confidence for November was at 109.5, lower than the expected 111.0. The Chicago Purchasing Managers Index was also lower than expected, registering 61.8 compared to the expectation of 67.0.
Jerome Powell was surprisingly hawkish in his comments before congress today, accelerating a timeline for bond purchase tapering after citing a strong economic recovery and high inflation. Janet Yellen pleaded with congress again to raise the debt ceiling to avoid defaults that could begin by December 15. Congress delayed the decision by a temporary agreement as a deadline approached in October.
The US Dollar weakened with the index (DXY) declining -0.31% today. US 30y and 10y Treasury Yields fell while the 2y Treasury Yield rose. High Yield (HYG) Corporate Bond Prices dropped. Investment Grade (LQD) Corporate Bond Prices rose for another day.
Silver and Gold Prices both declined for another day. Crude Oil Futures fell another -8.37%. Timber, Copper, and Aluminum all declined.
The put/call ratio rose to 0.723. The CNN Fear & Greed Index fell further into the Fear area, almost reaching Extreme Fear.
Of the four largest mega-caps, Apple (AAPL) was the only one to advance, gaining +3.16% on rumors of a new iPhone SE release in Q1 of 2022. Microsoft (MSFT) and Amazon (AMZN) closed below their 21d EMA, declining -1.79% and -1.53%. Alphabet (GOOGL) closed below its 50d MA, losing -2.50% today.
Apple was the top mega-cap for the day, followed by Pfizer (PFE), which gained +2.54%. Facebook (FB) was the biggest loser in the mega-cap list, falling -4.01% along with the rest of the Communications sector.
Pfizer's gain came in contrast to its main competitor Moderna (MRNA). Pfizer's message has been more positive on the effectiveness of current vaccines against Omicron. Moderna's CEO told the press late on Monday that he was concerned current vaccines wouldn't be effective. That sent futures tumbling overnight and set the mood for the market at the open.
Tesla (TSLA) was the only stock in the Daily Update Growth List to gain today, advancing +0.68%. At the bottom of the growth list were Fiverr (FVRR) and Snowflake (SNOW), both declining more than -6%.
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Looking ahead
ADP Nonfarm Employment Data will be available before the market opens tomorrow. After the market opens, ISM Manufacturing Data, including Employment and the Purchasing Managers Index, will be available. Crude Oil Inventories are to be available later in the morning.
Jerome Powell and Janet Yellen are scheduled for additional comments. The Beige Book will be released in the afternoon.
Tomorrow's earning reports include Snowflake (SNOW), Synopsys (SNPS), Crowdstrike (CRWD), Veeva Systems (VEEV), Okta (OKTA), Splunk (SPLK), and Five Below (FIVE).
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Trends, Support, and Resistance
The Nasdaq again dropped below the 21d EMA and the 15,600 support/resistance area.
The trend line from the 11/22 high points to a +0.04% lateral move for Wednesday.
The five-day trend line results in a -0.25% decline.
If the one-day trend line continues, it will mean a -1.63% drop for Wednesday.
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Wrap-up
There's much fear in the market this week as investors digest news about Omicron, the Bond Tapering schedule, and the looming debt ceiling deadline. The fear shows up in stock price weakness, treasury bond price strength, and the rising put/call ratio. Expect continued volatility as each of these develops over the next few weeks.
The expectation for Wednesday is Lower. Some good news could help turn the trend around.
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.
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Tuesday, November 30, 2021
Facts: -1.55%, Volume higher, Closing Range: 23%, Body: 47% Red
Good: Nothing
Bad: Lower high, lower low, decline on much higher volume
Highs/Lows: Lower high, Lower low
Candle: Thick red body in the middle of two long wicks.
Advance/Decline: 0.33, three declining stocks for every advancing stock
Indexes: SPX (-1.90%), DJI (-1.86%), RUT (-1.92%), VIX (+18.42%)
Sector List: Technology (XLK -0.83%) and Consumer Discretionary (XLY -1.35%) at the top. Utilities (XLU -2.92%) and Communications (XLC -3.17%) at the bottom.
Expectation: Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Lower consumer confidence and elevated Omicron fears sent stocks lower while Jerome Powell piled on with news of an accelerated bond tapering timeline.
The Nasdaq declined -1.55% for the day. Volume was higher than the previous day and much higher than the 50d average volume. The candle is long, nearly stretching to yesterday's high and last week's low, with a thick red body covering 47% of the middle. The closing range of 23% is not great, and three stocks declined for every stock that advanced.
The S&P 500 (SPX) declined -1.90%, and the Dow Jones Industrial Average (DJI) fell -1.86%. The Russell 2000 (RUT) dropped another -1.92% and is fast approaching the bottom of its trading range since February 2021. The VIX Volatility Index (VIX) climbed by +18.42%.
All S&P 500 sectors declined for the day. However, Technology (XLK -0.83%) and Consumer Discretionary (XLY -1.35%) faired the best, possibly boosted by news of a new iPhone SE device in the first quarter of 2022. Utilities (XLU -2.92%) and Communications (XLC -3.17%) were the bottom two sectors.
CB Consumer Confidence for November was at 109.5, lower than the expected 111.0. The Chicago Purchasing Managers Index was also lower than expected, registering 61.8 compared to the expectation of 67.0.
Jerome Powell was surprisingly hawkish in his comments before congress today, accelerating a timeline for bond purchase tapering after citing a strong economic recovery and high inflation. Janet Yellen pleaded with congress again to raise the debt ceiling to avoid defaults that could begin by December 15. Congress delayed the decision by a temporary agreement as a deadline approached in October.
The US Dollar weakened with the index (DXY) declining -0.31% today. US 30y and 10y Treasury Yields fell while the 2y Treasury Yield rose. High Yield (HYG) Corporate Bond Prices dropped. Investment Grade (LQD) Corporate Bond Prices rose for another day.
Silver and Gold Prices both declined for another day. Crude Oil Futures fell another -8.37%. Timber, Copper, and Aluminum all declined.
The put/call ratio rose to 0.723. The CNN Fear & Greed Index fell further into the Fear area, almost reaching Extreme Fear.
Of the four largest mega-caps, Apple (AAPL) was the only one to advance, gaining +3.16% on rumors of a new iPhone SE release in Q1 of 2022. Microsoft (MSFT) and Amazon (AMZN) closed below their 21d EMA, declining -1.79% and -1.53%. Alphabet (GOOGL) closed below its 50d MA, losing -2.50% today.
Apple was the top mega-cap for the day, followed by Pfizer (PFE), which gained +2.54%. Facebook (FB) was the biggest loser in the mega-cap list, falling -4.01% along with the rest of the Communications sector.
Pfizer's gain came in contrast to its main competitor Moderna (MRNA). Pfizer's message has been more positive on the effectiveness of current vaccines against Omicron. Moderna's CEO told the press late on Monday that he was concerned current vaccines wouldn't be effective. That sent futures tumbling overnight and set the mood for the market at the open.
Tesla (TSLA) was the only stock in the Daily Update Growth List to gain today, advancing +0.68%. At the bottom of the growth list were Fiverr (FVRR) and Snowflake (SNOW), both declining more than -6%.
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Looking ahead
ADP Nonfarm Employment Data will be available before the market opens tomorrow. After the market opens, ISM Manufacturing Data, including Employment and the Purchasing Managers Index, will be available. Crude Oil Inventories are to be available later in the morning.
Jerome Powell and Janet Yellen are scheduled for additional comments. The Beige Book will be released in the afternoon.
Tomorrow's earning reports include Snowflake (SNOW), Synopsys (SNPS), Crowdstrike (CRWD), Veeva Systems (VEEV), Okta (OKTA), Splunk (SPLK), and Five Below (FIVE).
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Trends, Support, and Resistance
The Nasdaq again dropped below the 21d EMA and the 15,600 support/resistance area.
The trend line from the 11/22 high points to a +0.04% lateral move for Wednesday.
The five-day trend line results in a -0.25% decline.
If the one-day trend line continues, it will mean a -1.63% drop for Wednesday.
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Wrap-up
There's much fear in the market this week as investors digest news about Omicron, the Bond Tapering schedule, and the looming debt ceiling deadline. The fear shows up in stock price weakness, treasury bond price strength, and the rising put/call ratio. Expect continued volatility as each of these develops over the next few weeks.
The expectation for Wednesday is Lower. Some good news could help turn the trend around.
Stay healthy and trade safe!
Website: drewby.com
Twitter: twitter.com/drewrobbins
All ideas are for information purposes only. I may or may not invest in the stocks discussed. Before investing in any stock, do your research and trade using your rules.
Twitter: twitter.com/drewrobbins
All ideas are for information purposes only. I may or may not invest in the stocks discussed. Before investing in any stock, do your research and trade using your rules.
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