Daily Market Update for 12/7
Summary: Investors rushed back into risk assets as more assurances came from experts that Omicron might spread faster but have less severe symptoms. The drugmaker GlaxoSmithKline also reported that their antibody-based COVID-19 therapy is effective against the new variant.
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, December 7, 2021
Facts: +3.03%, Volume lower, Closing Range: 92% (w/gap), Body: 83% Green
Good: Mostly green body, close above 50d MA, 21d EMA and 15,600 support area.
Bad: Gap up on lower volume
Highs/Lows: Higher high, Higher low
Candle: Gap up and mostly green body, upper wick, no lower wick
Advance/Decline: 2.41, more than two advancing stocks for every declining stock
Indexes: SPX (+2.07%), DJI (+1.40%), RUT (+2.28%), VIX (-19.46%)
Sector List: Technology (XLK +3.49%) and Energy (XLE +2.34%) at the top. Utilities (XLU +0.75%) and Consumer Staples (XLP +0.22%) at the bottom.
Expectation: Higher
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Market Overview
Investors rushed back into risk assets as more assurances came from experts that Omicron might spread faster but have less severe symptoms. The drugmaker GlaxoSmithKline also reported that their antibody-based COVID-19 therapy is effective against the new variant.
The Nasdaq gapped up at open, starting the day with a 2% gain and ending with a +3.03% gain. The candle is 83% green body with an upper wick and no lower wick. The closing of 92% includes the gap from yesterday's high. Volume was lower than the previous day, but gains were shared broadly with more than two advancing stocks for every declining stock.
The S&P 500 (SPX) rose +2.07%, while the Dow Jones Industrial Average (DJI) gained +1.40%. Small-caps did well with the Russell 2000 (RUT), climbing +2.28%. The VIX Volatility Index dropped -19.46%. The volatility index is still at an elevated level.
All S&P 500 sectors advanced for a second day. Technology (XLK +3.49%) and Energy (XLE +2.34%) were the top performers. The defensive sectors Utilities (XLU +0.75%) and Consumer Staples (XLP +0.22%) were at the bottom.
Nonfarm Productivity for Q3 dropped more than expected, but it didn't seem to bother investors. Unit Labor Costs rose 9.6% compared to the expectation of 8.3%.
The US Dollar index (DXY) remained flat, climbing only +0.01%. US 30y, 10y, and 2y yields rose, continuing their recovery after dropping among Omicron fears last week. High Yield (HYG) Corporate Bond prices rose sharply. Investment Grade (LQD) Corporate Bond prices ticked higher also.
Crude Oil Futures are rising again. Timber (WOOD) had another steep advance, adding to yesterday's gains.
The put/call ratio (PCCE) declined to 0.621. The CNN Fear & Greed index moved back toward neutral but is still at the Fear level.
All four largest mega-caps had significant gains today, closing above their 21d EMA. Apple (AAPL) had a record close after a +3.54% gain. Alphabet (GOOGL) rose +2.87%. Amazon (AMZN) climbed by +2.80%. Microsoft (MSFT) advanced +2.68%.
Nvidia (NVDA) topped the mega-cap list with a +7.96% gain. The list is primarily gainers today. Comcast (CMCSA) lost -5.29%, ending the day at the bottom of the mega-cap list after providing slower broadband growth guidance.
The stocks in the Daily Update Growth List had a very good day. At the top of the list was MongoDB (MDB), gaining +16.42% after smashing earnings expectations. Sumo Digital (SUMO), Digital Turbine (APPS), and Fiverr (FVRR) all gained more than 10%. Only three stocks in the growth list declined. The biggest loser was DocuSign (DOCU) which continues to struggle after last week's disappointing guidance.
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Looking ahead
After the market opens on Wednesday, the JOLTs Job Openings report will be available. The report made headlines last week as investors focused on the mass exodus of US workers. There was some evidence in last week's labor data that participation may be on the rise again.
Crude Oil Inventories will be available later in the morning. There is a 10-Year Treasury Note Auction scheduled in the afternoon.
GameStop (GME), RH (RH), and Lovesac (LOVE) are a few of the earnings reports for Wednesday.
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Trends, Support, and Resistance
Today, the Nasdaq closed above its 50d moving average and 21d exponential moving average. It also moved above the 15,400 and 15,600 support areas.
If the one-day trend line continues, we can expect a +0.44% gain for Wednesday.
If the index pulls back to the five-day trend line, that would mean a -2.16% decline.
The trend line from the 11/22 high points to a -3.27% decline.
15,833.11 is the high of last week. Creating a higher high for this week will be a key indicator of a recovery from the Omicron sell-off. Reaching that milestone higher volume will make it an even more decisive move.
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Wrap-up
Optimism over the lower impact of Omicron sent markets on a rally today. Will the rally continue? Analysts still need to measure the response to positive pandemic news against the reactions from the Fed on monetary policy. There is also the question of which sectors should benefit from the news. Technology soared today, but many believe that value stocks and recovery stocks should lead the way for a rebound. This week will continue to be interesting.
The expectation for Wednesday is Higher. A move up with more volume would be a confidence booster.
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, December 7, 2021
Facts: +3.03%, Volume lower, Closing Range: 92% (w/gap), Body: 83% Green
Good: Mostly green body, close above 50d MA, 21d EMA and 15,600 support area.
Bad: Gap up on lower volume
Highs/Lows: Higher high, Higher low
Candle: Gap up and mostly green body, upper wick, no lower wick
Advance/Decline: 2.41, more than two advancing stocks for every declining stock
Indexes: SPX (+2.07%), DJI (+1.40%), RUT (+2.28%), VIX (-19.46%)
Sector List: Technology (XLK +3.49%) and Energy (XLE +2.34%) at the top. Utilities (XLU +0.75%) and Consumer Staples (XLP +0.22%) at the bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors rushed back into risk assets as more assurances came from experts that Omicron might spread faster but have less severe symptoms. The drugmaker GlaxoSmithKline also reported that their antibody-based COVID-19 therapy is effective against the new variant.
The Nasdaq gapped up at open, starting the day with a 2% gain and ending with a +3.03% gain. The candle is 83% green body with an upper wick and no lower wick. The closing of 92% includes the gap from yesterday's high. Volume was lower than the previous day, but gains were shared broadly with more than two advancing stocks for every declining stock.
The S&P 500 (SPX) rose +2.07%, while the Dow Jones Industrial Average (DJI) gained +1.40%. Small-caps did well with the Russell 2000 (RUT), climbing +2.28%. The VIX Volatility Index dropped -19.46%. The volatility index is still at an elevated level.
All S&P 500 sectors advanced for a second day. Technology (XLK +3.49%) and Energy (XLE +2.34%) were the top performers. The defensive sectors Utilities (XLU +0.75%) and Consumer Staples (XLP +0.22%) were at the bottom.
Nonfarm Productivity for Q3 dropped more than expected, but it didn't seem to bother investors. Unit Labor Costs rose 9.6% compared to the expectation of 8.3%.
The US Dollar index (DXY) remained flat, climbing only +0.01%. US 30y, 10y, and 2y yields rose, continuing their recovery after dropping among Omicron fears last week. High Yield (HYG) Corporate Bond prices rose sharply. Investment Grade (LQD) Corporate Bond prices ticked higher also.
Crude Oil Futures are rising again. Timber (WOOD) had another steep advance, adding to yesterday's gains.
The put/call ratio (PCCE) declined to 0.621. The CNN Fear & Greed index moved back toward neutral but is still at the Fear level.
All four largest mega-caps had significant gains today, closing above their 21d EMA. Apple (AAPL) had a record close after a +3.54% gain. Alphabet (GOOGL) rose +2.87%. Amazon (AMZN) climbed by +2.80%. Microsoft (MSFT) advanced +2.68%.
Nvidia (NVDA) topped the mega-cap list with a +7.96% gain. The list is primarily gainers today. Comcast (CMCSA) lost -5.29%, ending the day at the bottom of the mega-cap list after providing slower broadband growth guidance.
The stocks in the Daily Update Growth List had a very good day. At the top of the list was MongoDB (MDB), gaining +16.42% after smashing earnings expectations. Sumo Digital (SUMO), Digital Turbine (APPS), and Fiverr (FVRR) all gained more than 10%. Only three stocks in the growth list declined. The biggest loser was DocuSign (DOCU) which continues to struggle after last week's disappointing guidance.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
After the market opens on Wednesday, the JOLTs Job Openings report will be available. The report made headlines last week as investors focused on the mass exodus of US workers. There was some evidence in last week's labor data that participation may be on the rise again.
Crude Oil Inventories will be available later in the morning. There is a 10-Year Treasury Note Auction scheduled in the afternoon.
GameStop (GME), RH (RH), and Lovesac (LOVE) are a few of the earnings reports for Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
Today, the Nasdaq closed above its 50d moving average and 21d exponential moving average. It also moved above the 15,400 and 15,600 support areas.
If the one-day trend line continues, we can expect a +0.44% gain for Wednesday.
If the index pulls back to the five-day trend line, that would mean a -2.16% decline.
The trend line from the 11/22 high points to a -3.27% decline.
15,833.11 is the high of last week. Creating a higher high for this week will be a key indicator of a recovery from the Omicron sell-off. Reaching that milestone higher volume will make it an even more decisive move.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Optimism over the lower impact of Omicron sent markets on a rally today. Will the rally continue? Analysts still need to measure the response to positive pandemic news against the reactions from the Fed on monetary policy. There is also the question of which sectors should benefit from the news. Technology soared today, but many believe that value stocks and recovery stocks should lead the way for a rebound. This week will continue to be interesting.
The expectation for Wednesday is Higher. A move up with more volume would be a confidence booster.
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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