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Nasdaq Market Update for 11/6Trend lines drawn from the 10/12 pivot day (20d), 10/30 bottom (6d), 11/2 (5d), and today 11/6 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, November 6, 2020 I don't know why you say goodbye, I say Hello Facts: +0.04% higher, Volume higher, Closing range: 86%, Body: 14% Good: Recovered from morning lows and closed near highs Bad: Nothing, the index needed a pause Highs/Lows: Lower high, lower low Candle: Bullish thick body candle after a gap up Advance/Decline: 0.63, three declining stocks for every two advancing stock Sectors: Consumer Staples (XLP +0.46%) and Technology (XLK +0.35%) were top. Energy (XLE -2.79%) was the worst performing. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The morning started with a pullback in the markets but then the indexes, including the Nasdaq rallied back to yesterday’s highs after better than expected employment data. It was not a stellar day of gains like the previous three days, but it was a good pause to cool off from one of the hottest weeks since April. The index ended the day with a +0.04% gain and a +9.01% gain for the week. The candle has a high tight body of 14% and a closing range of 86%. The bulls win the day, but any gains were focused to a smaller slice of the market. Declining stocks outnumbered advancing stocks at a 3 to 2 ratio. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX -0.03%), Dow Jones Industrial (DJI -0.24%) turned in minor losses while the Russell 2000 (RUT -0.96%) fell back from stellar gains the previous day. The S&P500 chart shows a doji candlestick, which can be a sign of reversal. Given the huge gains this week, I view it as showing a pause and possibly sideways move in the near term, especially given other indicators we look at. Consumer Staples (XLP +0.46%) was the top sector of the day while Technology (XLK +0.35%) was not far behind. Materials (XLB +0.25%) slowed a bit but continues an uptrend powered by an increase in commodities prices. Energy (XLE -0.64%) started the day on the top, opening with a 1.4% gain, but quickly came back down and ended the day at the bottom of the sector list. The VIX volatility index decreased -9.86% and continued to trade in the late September and October range. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond yields increased for the day and the 10Y-2Y and 30Y-10Y spread increased after a few days of declines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Of the big four mega-caps, only Microsoft (MSFT +0.19%) ended the days with gains although it did take a round-trip to fill the gap from Wednesday to Thursday. Apple (AAPL -0.29%), Amazon (-0.32%) and Google (GOOG -0.09%) had losses. Apple successfully tested its 50d MA. Apple and Google had intraday positive moves relative to the market. Growth stocks had mixed results. Square (SQ +13.04%) was a big winner after beating earnings expectations and showing opportunity for more growth. Cloudflare (NET +11.16%) got a boost from their earnings beat, gaining over 20% at one point in the day before settling at 11.16% gains. UBER (UBER +6.94%) is also up after earnings. Dr. Horton (DHI -3.15%) had a second day of losses as it heads into earnings next week. Zynga (ZNGA -4.64%) continued to retreat despite having beat expectations. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Not much economic news is scheduled for Monday, although we will have more updates on the election over the weekend. McDonald’s (MCD +0.12%) and Beyond Meat (BYND -0.11%) are among some of the earnings releases scheduled for Monday. Not sure if the two will show any impact after the relationship ended in June, but it certainly makes me hungry for a burger (the real kind). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The six-day trend from the 10/30 bottom and five-day trend are both pointing to an aggressive +3.14% gain which would make new all-time highs for the Nasdaq. Following the one-day trend would result in a more modest +1.02% gain that would take the index past the 10/12 pivot which is a resistance area for now. The trend line from the 10/12 pivot is slowly changing its slope but still points at -5.41% loss. That is not likely to happen unless some negative news changes the market context. The more likely point, if a significant pull back occurs, would be above the October Support area and the 21d EMA which would be a -3.31% loss. It seems we are clear of the July support area for the time being. Breaking through that support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. That area is now well below today’s close and as we approach new highs, I will remove it from the daily notes. I hope you have a safe and relaxing weekend. Get yourself mentally prepared for another week of unexpected positive or negative moves as the election roles on.
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 11/4Trend lines drawn from the 10/12 pivot day (18d), 10/29 (5d), and today 11/4 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, November 4, 2020 You shake my nerves and you rattle my brain Facts: +3.85% higher, Volume higher, Closing range: 73%, Body: 55% Good: Held near top of the range, back above 21d EMA, 50d MA and support areas Bad: Gap up could, swing the other way to cover gap Highs/Lows: Higher high, higher low Candle: Bullish candle after a gap up, upper wick slightly longer Advance/Decline: 1.16, About same amount of advancers and decliners Sectors: Health (XLV +4.44%), Communication Services (XLC +4.31%), Technology (XLK +3.89%) were at the top. Industrials (XLI -1.03%), Financials (XLF -1.17%), Utilities (XLU -1.50%) and Materials (XLB -1.70%) were all losers. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview What a difference a day can make. The Nasdaq reacted sharply to a turn in sentiment toward election results when it became apparent the “Blue wave” would not happen as originally thought. Even as the presidential election remains undecided, it seems that the Republicans will retain control of the Senate, putting a damper on any radical changes in the near-term. The index responded with a gap up and turned in a +3.85% gain on a 12% increase in volume. The candle is a nice thick bullish green with a 55% body and a 73% closing range. Declining stocks were about the same amount as Advancing stocks representing the rotation for previous bets that investors were making on election. This is the highest high the Nasdaq turned in since October 19, and closing the index back above the key levels of the 21d EMA and the 50d MA as well as the September and October support levels marked on the chart. It is reasonable to expect some pullback, but hopefully we can hold above these levels, adding strength to a new rally. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX +2.21%), Dow Jones Industrial (DJI +1.35%) did not do as well as the Nasdaq but did turn in decent gains. The Russell 2000 (RUT +0.05%) was left behind a bit as investors shifted back to larger capital businesses. The S&P 500 closed above its 50d MA while the DJI remains just below this key line. Health (XLV +4.48%), Communication Services (XLC +4.30%), Technology (XLK +3.89%) were the top sectors, which would benefit from at least a mixed party government, if not a Republican president. Industrials (XLI -1.03%), Financials (XLF -1.17%), Utilities (XLU -1.50%) and Materials (XLB -1.70%) were all losers. All of these losing sectors were doing very well ahead of the election, with expectations of the “blue wave” result. The VIX volatility index decreased -16.57% putting it back in the late September and October range. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond yields decreased on the day, as investors bought up the bonds in wake of changed expectations. The 10Y-2Y yield spread had a pullback but is still within an upward channel. I will keep an eye on this one over the next few days. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders The mega-cap stocks did well except for large Financial stocks. The big four all had great gains. Microsoft (MSFT +4.82%), Google (GOOG +5.99%) and Amazon (AMZN +6.32%) are all trading above their 50d MA and 21d EMA. Apple (AAPL +4.08%) is above the 21d EMA and heading toward the 50d MA. They all have relative candles showing strength compared to the index. That is the type of strength that is needed to put energy into a rally. I will keep watching for these four to continue leading the market higher. There was broad support for favorite growth stocks, with many having big gains on the day. Facebook (FB +8.32%), Datadog (DDOG +8.30%), PayPal (PYPL +8.05%), JD.com (JD +8.01%) are a few of the big winners of the day. Paycom (PAYC +7.66%) is up another 4% after hours after announcing earnings beat expectations. Zynga (ZNGA +3.79%) missed estimates in their earnings release and is down -1.26% after hours. That is a lot less punishment than expectation misses in recent earnings announcements. Uber (UBER +14.59%) had a huge gain after winning legislation that will allow them to continue using contract drivers in California. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow will bring new Initial Jobless Claims data, following a less than expected change in ADP Nonfarm Employment data. It will be important to watch the employment data closely after the pandemic hits new heights. In the afternoon, the Fed will announce any changes in interest rates. The expectation for interest rates is to remain unchanged based on earlier messages from the Fed. Cloudflare (NET +5.79%), Peloton (PTON +6.28%), Alibaba (BABA +3.55%), Square (SQ +8.27%), and Uber are all popular growth stocks that have earnings announcements scheduled for tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance There are three trend lines pointing to quite different spots on the chart. The first is the one-day trend that points to another +0.93% gain. That feels nearly sideways given the past two days of gains and cooling off a bit would be good for the market. Likewise, the 5-day trend points to a -0.89% that is also sideways in the context of two days of big gains. A -0.89% pullback would not even touch the gap from this morning. The trend from the 10/12 pivot day is pointing to a -5.10% loss. Unless sentiment changes dramatically, that does not seem likely for tomorrow. I will add another trend line from the 10/30 bottom for the next update. It seems we are clear of the July support area for the time being. Breaking through that support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. That area is now -12.56% below today’s close and I will remove the possibility of that outcome if we hold above support for the next few days. Continue to be prepared for unexpected moves over the next few days as the election unknowns are resolved. The last few days have been wildly outside any expectations I have had in this section.
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 11/3Trend lines drawn from the 10/12 pivot day (17d), 10/28 (5d), and today 11/3 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, November 3, 2020 Stand straight, walk proud ‘Cause we shall be free Facts: +1.85% higher, Volume higher, Closing range: 74%, Red Body: 58% Good: Bulls led the day, and held near the day’s highs Bad: Couldn’t break through 11,300 area Highs/Lows: Higher low, higher high Candle: Thick green body with a slightly longer upper wick Advance/Decline: 3.78, Almost 4 advancers for every decliner Sectors: Industrials (XLI +2.95%), Financials (XLF +2.22%), Consumer Discretionary (XLY +2.20%) were at top. Energy (XLE -0.57%) was the only losing sector. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview It is finally Election Day! And the day brought the pleasant surprise of a positive expectation breaker for the Nasdaq. Yesterday’s trend lines and the indecisive candle pointed to losses for today, but it is good to be wrong sometimes. I set my expectations for the next day, but always be prepared for a break from those expectations, especially during these uncertain times. The Nasdaq gained +1.85% today, climbing to just under the September resistance area of 11,300. Volume was slightly higher than the previous day. The index closed at a 74% closing range after developing a 58% green body. There were nearly four advancers for every declining stock. That is all good signal in the market. There is still some work for the Nasdaq to show strength, focusing on getting past the high of 10/29 at 11287.63, showing a breakout from Wednesday’s severe drop. Right now, it is still trading within the range of the previous four days. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX +1.78%), Dow Jones Industrial (DJI +2.06%) and Russell 2000 (RUT +2.91%) also had significant gains today. The Russell 2000 gains show the continued investment in small cap stocks. These indexes all broke above the trading range of the past four days, which is a good sign of strength. Industrials (XLI +2.95%) led the sectors for the day, followed closely by Financials (XLF +2.22%) and Consumer Discretionary (XLY +2.20%). All of these sectors would benefit from a stimulus, especially under a Biden presidency. Energy (XLE -0.57%) was the losing sector of the day, and the only sector to finish with losses. The Energy sector is not expected to benefit from a Biden presidency. If you look at the market to predict the election outcome, this is consistent to what it’s been pricing in recently. Keep in mind the old saying "to buy the rumor and sell the news." The VIX volatility index decreased -4.26% continuing it’s decent from last week’s high, but is still well above the 200d moving average. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond spreads increased for the day. The 30Y-10Y spread is starting to form a downward trend but is still well off the pivot low in late July. Not a concern right now but will continue to watch. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders With few exceptions, mega-caps had a great day. The big four, Apple (AAPL +1.54%), Microsoft (MSFT +2.03%), Google (GOOG +1.49%) and Amazon (AMZN +1.46%) all had good gains today. Only Google is trading above it is key 21d EMA and 50d MA line. Expect the other three to have some resistance at these lines if they continue to approach them over the next few days. Also, looking at the relative candle, you can see only Microsoft (MSFT) started higher and moved higher than the overall index. It would be better if they were all moving up in a bullish way, giving the market more energy to rise from a bottom. Among other growth stocks, there were mostly positive gains. A few exceptions include Solar Edge (SEDG -22.92%) which disappointed on earnings and PayPal (PYPL -4.23%) which provided lower guidance for the coming fourth quarter. Wayfair (W +7.23%) had a great day after smashing expectations on earnings announced before the market open. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead It is hard to even look past tonight, as much will depend on the outcome of the election and the candidate’s reaction to the outcome. Tomorrow will bring updates on Employment data before market open and Crude Oil Inventories data at 10:30a. Several companies will be reporting earnings tomorrow including Hilton (HLT +3.01%) and Expedia (EXPE +4.31%) which will give visibility on how business and leisure travel are doing. Qualcomm (QCOM +1.19%), Baidu (BIDU +0.04%), Zynga (ZNGA +2.59%) and Paycom (PAYC +2.37%) are among some of the other important earnings announcements for tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance A continuation of today’s trend line would lead to a +0.53% increase for tomorrow and land the index just below the September resistance area of 11,300. With some additional energy, it could break through that area, but expect that it will pause there before further gains. Looking at the other trend lines, the trend from the 10/12 pivot day would point to a -2.19% loss tomorrow. That is lower then the 5-day trend which has been flattening since last Wednesday and Friday big losses. Putting more distance in between the index and the July support area is a good thing. Breaking through this support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I kept in view the future possibility of reaching the June support area, a -9.20% loss from today’s close. Continue to be prepared for unexpected moves over the next few days as the election unknowns are resolved and the market starts to absorb the news.
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 11/2Trend lines drawn the 10/12 pivot day (16d), 10/27 (5d), and today 11/2 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, November 2, 2020 R.O.C.K in the U.S.A. Facts: +0.42% higher, Volume lower, Closing range: 53%, Red Body: 22% Good: Stayed above Friday’s low, late day uptrend Bad: Indecision/continuation candle Highs/Lows: Higher low, lower high Candle: Inside day, with a short body, longer lower wick than upper wick Advance/Decline: 2.05, 2 advancers for every decliner Sectors: Energy (XLE +3.41%), Materials (XLB +3.32%) were top, Communications (XLC -0.05%) was bottom. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The first day of November starts off with some more choppy market action as the Nasdaq started in the positive, went negative and then back to positive by the end of the day. It was good that the index came up off afternoon lows, but it could just barely get back to the midpoint of the morning highs. The index ended up +0.42% on lower volume. The candle is an inside day with a thin 22% body and 53% closing range, not providing a clear winner of bulls or bears. There were 2 advancing stocks for every declining stock, which underperformed the broader market which had a 3:1 ratio. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX +1.23%), Dow Jones Industrial (DJI +1.60%) and Russell 2000 (RUT +1.96%) had much more positive days. However, they are all still trading within the highs and lows of the final three days of last week. Energy (XLK +3.41%) and Materials (XLB +3.32%) led the mostly positive day for sectors. Energy was lowest at open, but quickly moved to the top. Communications (XLC -0.05%) and Technology (XLK +0.25%) were at the bottom of the list, continuing to cool off from gains in recent months. The VIX volatility index decreased -2.34% but still closing near the highs of September. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond spreads decreased for the day. The 30Y-10Y spread is starting to form a downward trend but is still well off the pivot low in late July. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Mega-caps had mixed results. The big four ended the day with losses, except for Google (GOOG +0.31%). Apple (AAPL -0.08%) and Microsoft (MSFT -0.07%) had minor losses while the Amazon (AMZN -1.04%) loss was a little more severe. Only Google is trading above the key 21d EMA and 50d MA lines. Facebook (FB -0.67%) had a wild day, bouncing off the 100d MA which is where it maintained support in September. Beyond the mega-caps, there is still some rotation among growth stocks. Pinterest (PINS -0.97%) is down, Snap (SNAP +3.55%) is up. DataDog (DDOG -2.67%) and ServiceNow (NOW-4.34%) are down while FVRR (+3.38%) and Fastly (FSLY +2.52%) are up. Solar Edge (SEDG +3.89%) is down 20% after hours on lower-than-expected sales results. PayPal (PYPL +0.88%) is down 6% after hours on a poor fourth quarter outlook, despite beating expectations for third quarter. Jazz Pharmaceuticals (JAZZ +2.19%) is up 10% after hours after beating expectations. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow is the big election day. It could be a very choppy back and forth day as early news, true, false or otherwise is broadcast. There are quite a few earnings reports that will be released prior to the market opening including Wayfair (W +3.07%), Johnson Controls (JCI +4.10%), and Fox Corp (FOXA +3.32%). Fewer after market due to the election. There is not much economic news on the calendar for tomorrow other than the Presidential Election. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The three trend lines I’m using are all pointing to losses for tomorrow. The better of the two is the trend line from the 10/12 pivot day which points to a -0.35% loss. The five day and one day trend both point to about the same spot at -2.18% loss. That’s just above the July support area and just narrowly below a parallel channel drawn from 10/12. Breaking through this July support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching the June support area, a -7.55% loss from today’s close. This downward trend seems to be how the market is heading into the election on Tuesday. Following tomorrow, we could finally see a turn for the better.
NASDAQ:IXIC
by drewby4321
6
Nasdaq Week In Review - 10/26/2020 - 10/30/2020 The Nasdaq Week in Review is my weekend homework where I look over what happened in the previous week and what might come in the next week. It helps me evaluate my observations, recognize new data points, and create a plan for possible scenarios in the future. If you find this helpful, please let me know in the comments. I am also more than happy to add new perspectives and data points if you have ideas. The structure is the following: A recap of the daily updates that I do here on TradingView. The Meaning of Life, a larger view on the past week What's coming in the next week Key index levels to watch out for Wrap-up If you have been following my daily updates, you can skip down the “The Meaning of Life”. If not, then this first part is a great play-by-play recap for the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, October 26, 2020 Hold tight, we're in for nasty weather Burning down the house Facts: -1.64% higher, Volume higher, Closing range: 42%, Red Body: -25% Good: Support at the end of the day, brought the index back over 50d MA Bad: Everything else, gap down, closed below the 21d EMA and took a visit below the 50d MA Highs/Lows: Lower high, lower low Candle: A large body for a spinning top , but nonetheless shows clearer the action from bears and bulls. Advance/Decline: 0.23, more than 4 decliners for every advancer Sectors: All sectors down with Utilities ( XLU ) performing best, holding to a -0.03% loss. Energy ( XLE ) was the worst sector with a -3.59%, erasing gains from last week. Keeping an eye on Technology ( XLK ) this week, it’s near the middle of the sector list with a -2.17% loss and underperforming the SPX . Expectation: Sideways Well, crap. Welcome to Monday. News over the weekend reset expectations coming into the morning, but there was still hope that support would firm up and it initially did that as the market opened, coming close to Friday’s high. Then the reversal, 30 minutes into trading, came after New Home Sales data disappointed and it was a long slide from there. At 1:30p, the Nasdaq was down nearly 3% and below the key 50d MA support line. At that point, the bulls came in and brought it back to end the day with a -1.64% loss. The candle looks like a spinning top , albeit a fat one, with a 25% red body and a 42% closing range. There were more than four declining stocks for every advancing stock. Volume was slightly higher than Friday, but still well below recent average volume . The index closed below the 21d EMA for the first time since 9/25. The S&P500 had a slightly different character with no morning gains. It was all downhill most of the day, with some buying in the afternoon to finish at -1.86% loss. All sectors finished with a loss, but Utilities ( XLU ) held up the best with only a -0.03% loss. This has been the safe haven sector for investors to stay in the market, instead of going to bonds or commodities . Health ( XLV -1.11%), Consumer Staples ( XLP -1.28%), Real Estate ( XLRE -1.21%) all outperformed the broader index. The first two likely because of pandemic news and the third benefiting from the drop in new home sales ( XLRE is dominated by management companies, that benefit from less demand and cheaper prices in real estate). The Russell 2000 (RUT -2.15%) wiped away all gains from the previous week, performing almost as bad as the Dow Jones Industrial (DJI -2.29%). Treasury Bond spreads shrunk but remained in an upward channel from the last few weeks. The mega-caps had a mixed day. Microsoft ( MSFT -2.84%) closed well below it’s 50d MA line, likely being impacted by SAP (SAP -23.16%) that revised guidance downward over the weekend, sending a signal there may be trouble in enterprise software. Google ( GOOG -3.08%) gave up about half of it’s gains from last week. Apple ( AAPL +0.01%) and Amazon ( AMZN +0.08%) faired a bit better, ending the day with small gains, although both are holding below key indicators of 21d EMA and 50d MA. The storied stock from last week, Snap (SNAP -4.40%) finally gave up some profits, while there was a lot of carnage with other growth stocks. There were some positive stories among growth stocks. Deckers Outdoor (DECK +2.58%), Shopify (SHOP +1.15%), ZScaler (ZS +1.33%), Zoom Video (ZM +1.23%), Wayfair (W +2.07%) all had good days while the market was struggling. Microsoft ( MSFT ) and AMD ( AMD ) earnings after close tomorrow. Core Durable Goods Orders data comes in before market and Consumer Confidence data at 10:00am. I’ll start with the positive trend lines , although I think some sideways action is in order after a negative expectation breaker day. Nonetheless, unexpected news can help put some positive gains in the market. With enough energy, the index could find its way back to the correction regression trend line (which is still on an upward slope) and the trend from the 9/24 bottom. That would be an unlikely +3.30% gain. The index landed below the 21d EMA , but above the 50d MA. This provides both a resistance and support point that points to a sideways move. The trend line from the 10/12 pivot day, points to a -0.40% loss that keeps the index within this channel. The one day trend points to more losses and would result in -2.50% loss. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, October 27, 2020 You shake my nerves and you rattle my brain Facts: +0.64% higher, Volume lower, Closing range: 67%, Green Body: +21% Good: Upward trend most of the day, staying above the 50d MA Bad: Could not stay above the 21d EMA Highs/Lows: Lower high, higher low, inside day Candle: An inside day with a small green body, nearly identical upper and lower wicks Advance/Decline: 0.63, 3:2 decliners to advancers Sectors: Communications ( XLC ) and Technology ( XLK ) performed best. All other sectors lost, with Industrials ( XLI ) and Financials ( XLF ) performing worst. Expectation: Sideways or Lower The follow-up to a terrible Monday was an inside day with gains in the Nasdaq while the rest of the market continued to melt down among mixed signals from a positive Durable Goods report, but an unexpected dip in Consumer Confidence. The Nasdaq ended the day up +0.64% higher, driven by big tech and hot communications sector stocks. The day was a bit choppy, but the overall channel for the day was upward. The index poked above its 21d EMA four times but settled at the end of the day just below the key line. The candle is inside the highs and lows of the previous day which typically is a continuation (vs a reversal). Keeping that in mind, it did close in the 67% range of the candle with a green 21% body. There were many more declining stocks than advancing stocks at a ratio of 3:2 (the ratio is worse in the broader NYSE). Volume was lower and continues to be much lower than recent average volume . The index closed below the 21d EMA , but above the 50d MA, both key lines that investors commonly watch. The S&P500 ( SPX -0.30%) and Dow Jones Industrial (DJI -0.80%), had decidedly bearish inside days, spending most of the day trading below their 50d MA. The Russell 2000 (RUT -0.90%) also had another loss, falling below the 21d EMA . Communication Services ( XLC +0.64%) was the best sector of the day, driven by gains from Facebook ( FB +2.23%) and Google ( GOOG +0.87%). Technology ( XLK +0.50%) sector also had a great day but was driven mostly by the larger stocks Apple ( AAPL +1.35%) and Microsoft ( MSFT +1.51%). All other sectors lost on the day with Industrial ( XLI -2.19%) and Financial ( XLF -1.83%) sectors ending the day with the worst performance. Utilities ( XLU -0.08%) had early gains and topped the sector list at times, then faded near close. The VIX volatility index increased +2.74% for another gain on top of Monday's surge. The key indicator is now up over 20% for the week and nearing the early September highs. Treasury Bond spreads shrunk for another day. This is something to keep an eye on, but the spread is still in an upward trend channel from an August pivot . The real winners of the day were the mega-caps. Microsoft ( MSFT +1.51%), Apple ( AAPL +1.35%), Google ( GOOG +0.87%), Amazon ( AMZN +2.47%), Tesla ( TSLA +1.05%) and Facebook ( FB +2.23%) all turned in solid gains for the day. Microsoft and Apple still closed below their 21d EMA , but Amazon regained this key support to join Google above the line. Facebook has a nice base forming heading into earnings . Beyond the mega-caps, the performance is mixed among favorite growth stocks. Dexcom ( DXCM -8.94%), Draft Kings ( DKNG +2.49%), Workhorse Group ( WKHS -6.91%), AMD (-4.07%) were among the losers. Pinterest (PINS +4.08%), Etsy ( ETSY +4.33%), Peloton (PTON +2.58%) and Datadog ( DDOG +1.57%) were some of the winners. Notice these lists of winners and losers among the favorite growth stocks is rotating at an accelerated space. Microsoft ( MSFT ) and AMD ( AMD ) reported earnings with Microsoft down -1.71% and AMD up +0.34% in afterhours trading, despite both beating expectations. Tomorrow’s reports will include Mastercard (MA) and Visa (V), Boeing (BA), and ServiceNow (NOW) which will all be significant, with several reporting before market open. In economic news, Crude Oil Inventories will be announced at 10:30a. Continuing today’s trend direction would result in a +0.34% gain tomorrow, taking the index back above the 21d EMA and signaling some recovery from the recent downtrend. Better news from stimulus talks or coronavirus treatments could accelerate that to meet up with the longer trend lines at +2.45%. The index is still trading below the 21d EMA and above the 50d MA which seems to be a channel for now. In addition, there is a channel that formed from the 10/12 pivot day with a well-defined upper and lower channel line. Following the channel and the regression trend from the 10/12 pivot day as well as the 5d trend, would mean a -0.99% loss and land the index right above the 50d MA. I'm keeping the June Support line in view, but its ~12.5% below the Tuesday close and there are 3 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300 again, then I'll add that possibility back to the chart. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, October 28, 2020 Let down and hanging around Crushed like a bug in the ground Facts: -3.73% lower, Volume higher, Closing range: 2%, Red Body: -90% Good: Nothing Bad: Gap down, deep red candle, ending at the days lows, broke below 50d MA Highs/Lows: Lower low, lower high Candle: Very tiny wicks on either side of a fat red body Advance/Decline: 0.16, 6 decliners for every one advancer Sectors: All sectors down, Real Estate ( XLRE -2.22%) and Financials ( XLF -2.56%) held up best. Expectation: Lower Market Overview The day was not so much of a surprise but still hurts for a bull in the market. Sure, there were hopes for a bounce off the 50d MA or bulls coming in at the end of the day to buy the dip. But none of that happened. The Nasdaq finished down -3.73%, well below the 50d MA and testing the round number area of 11,000. Round number support is created by the tendency for investors to pick big round numbers as buy/sell triggers. The candle has a huge 90% red body with tiny wicks on top and bottom and a dismal 2% closing range. There were many more declining stocks than advancing stocks at a 6:1 to ratio with the broader NYSE seeing a 10:1 ratio. Volume on the Nasdaq had a huge 28.4% increase over the previous day and is above average volume for the past 50 days. Indexes and Sectors The S&P 500 ( SPX -3.53%) and Dow Jones Industrial Average (DJI -3.43%) indexes also saw big losses on increased volume . The Dow Jones Industrial went below September lows. The Russell 2000 (RUT -2.98%) faired slightly better, but still saw big losses. All sectors were losers with Real Estate (XLR -2.22%) and Financials ( XLF -2.56%) holding up the best. Technology ( XLK -4.24%) was the worst sector of the day. Communication Services ( XLC -3.93%) and Energy ( XLE -4.18%) also underperformed the SPX index, with Energy having some positive gains after Crude Oil Inventories were announced, but later selling off. Utilities ( XLU -2.91%) was strongest in morning trading, before giving up to the excessive selling. The VIX volatility index increased a whopping +20.78% to add to the weeks gains which are now at 46.21% and exceeding the volatility highs of September. Bonds Treasury Bond spreads stayed about the same as the previous day. This is something to keep an eye on, but the spread is still in an upward trend channel from an August pivot . Market Leaders The mega-caps were all impacted by the selling with Microsoft ( MSFT -4.96%), Apple ( AAPL -4.63%), Google ( GOOG -5.46%), Amazon ( AMZN -3.76%) all dropping significantly. All of them closed below their 50d MA. Add Tesla ( TSLA -4.29%), Facebook ( FB -5.51%) and every other company over 200B market cap to that list. Not even one was spared. On the other hand, there were some bright spots elsewhere in the market. Chewy ( CHWY +6.33%) continued its breakout despite the heavy selling. Twilio ( TWLO +3.73%) finally got some credit for a good earnings report after selling earlier this week. Pinterest (PINS -6.23%) turned a big loss into huge >30% gains after the market closed thanks to their earnings report. Looking ahead to Tomorrow Tomorrow is the week’s big day with an enormous number of companies announcing quarterly earnings including Google , Amazon, Apple , Facebook , Starbucks ( SB -3.30%) after market close. Shopify (SHOP -5.19%) will release earnings before market open. The big economic news tomorrow will include the Gross Domestic Product. It is expected to show a record amount of growth but remember that this quarter will follow the worst quarter in history, and it is not an indicator of future economic activity. Any initial excitement in the market on this data alone, would certainly sell off without additional reasons to support gains. Trends, Support and Resistance For trend lines and expectation circles, I’ve grayed out the trend lines from the 9/3 correction start and the 9/24 bottom. These trend lines have lost significance against the current trend lines , and I’ll remove them in the next update. However, the trend from the 10/12 pivot day (which becomes the top in the current wave), and the 5d trend provide for the possibility of a +1.56% gain tomorrow. This would put the index just below September resistance area that held prices down in early October. Continuing today’s trend which was mostly flat after the initial sell-off would mean a -0.49% loss tomorrow and would break through the 11,000 round number resistance. Beyond the trend lines , there are two support areas to watch for. The first is at 10,600 which is where we found the bottom of 10,519.49 in September. Breaking through this area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching that line. An additional -8.18% loss to that area feels within the realm of possible outcomes. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, October 29, 2020 It's something unpredictable But in the end is right I hope you had the time of your life Facts: +1.65% lower, Volume lower, Closing range: 60%, Green Body: 47% Good: Traded above yesterday’s low, fat green bullish body Bad: Selling at end of day after 50d MA resistance Highs/Lows: Higher low, higher high Candle: Thick green body, majority in lower part of candle, long top wick Advance/Decline: 1.85, about 2 advancers for every decliner Sectors: Energy ( XLE +3.07%), Communications ( XLC +2.25%) were top, Health ( XLV -0.82%) was bottom. Expectation: Sideways Market Overview It was a reasonably good day following the sell-off on Wednesday. The Nasdaq finished up +1.64% after tempting itself with the 50d MA and September Resistance line. Volume was lower, returning to the recent levels that have represented the wait-and-see level of activity in the market, well below the 50d average volume . The candle has a 47% green body with a 60% closing range which is good considering the bounce from yesterday but also shows not everyone is back in the game yet. Breadth was ok with two advancing stocks for every declining stock. Indexes and Sectors The S&P 500 ( SPX +1.19%) had a similar day with gains on lower volume that somewhat dropped back at the end of the day. Both the S&P 500 and the Dow Jones Industrial Average (DJI +0.52%) had lower highs and lower lows, putting them further below their key moving averages with the 21d EMA slipping below the 50d MA. Energy ( XLE +3.07%) and Communication Services ( XLC +2.52%) were the best performing sectors with Energy passing Communications in the last 30 minutes of trading. Keeping an eye on Technology ( XLK +1.67%), it had decent gains today ahead of some important earnings announcements. Consumer Staples ( XLP -0.03%) and Health ( XLV -0.82%) were the only two sectors with losses. The VIX volatility index finally took a step back, losing -6.68%, but the close remains above the September numbers. Bonds Treasury Bond spreads increased for the day. The spreads are in an upward trend channel from an August pivot . Market Leaders The mega-caps all faired well after yesterday’s selling. Apple ( AAPL +3.71%), Amazon ( AMZN +1.52%) Microsoft ( MSFT +1.01%) and Google ( GOOG +3.34%) had significant gains as did the majority of mega cap companies. Pinterest (PINS +26.92%) followed up great earnings with a huge gain, trying to keep up with rival Snap (SNAP -1.49%) which had is starting to build a base after the huge gains from last week. Lots of growth stocks had good gains on the day. Shopify (SHOP -4.84%) and Spotify (SPOT -3.36%) retreated heading into earnings . So let’s talk about earnings . All of the big tech companies that released earnings reports today, beat expectations. Apple , Google , Amazon, Facebook all had good reports compared to expectations, yet except for Google they sold off in after hours. The same story played out for Shopify. Spotify missed slightly but had great customer adds data. Apple had higher revenue but low performance in China and no guidance. The market, not willing to stomach that, sold off AAPL over -4% in after hours. Facebook is down -2.88% after market, Amazon is down -1.81%. This is also a continuation of earnings beats earlier in the week that have seen losses in the stock price. Investors are looking for the extremely good beats and expectations like the ones we saw from Snap and Pinterest. Looking ahead to Tomorrow Tomorrow will be a big day for Energy as Exxon Mobile ( XOM +4.43%) and Chevron ( CVX +2.87%) will announce earnings before market open. In addition, a plethora of other large cap companies will report before market open. Employment Wages and Personal Consumption Expenditures aren’t expected to have much impact in the context to this week’s other economic indicators and impact of earnings reactions. We already know people are spending more while earning less based on other economic indicators. Trends, Support and Resistance As I stated in yesterday’s update, I removed the trend lines from 9/3 and 9/24 which were having less and less relevance since we pivoted on 10/12 and are approaching the lows of September. For tomorrow, the one day trend line would point to a +2.30% gain that breaks back above the key 21d EMA and 50d MA that often act as support or resistance. Continuing the trend from the 10/12 pivot day as well ad the last five days would result in a -1.06% drop . This is where the trend line points to, but it’s reasonable to believe a continued loss for Friday and into Monday that would take us to the 10,600 support level . Breaking through this area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching that line, a -9.41% loss from today’s close. This downward trend seems to be how the market is heading into the election on Tuesday. Following Tuesday, we could finally see a turn for the better. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, October 30, 2020 If there's somethin' strange in your neighborhood Who ya gonna call? Facts: -2.45% lower, Volume higher, Closing range: 29%, Red Body: 62% Good: Not much, small uptick at end of day Bad : Lower low Highs/Lows: Lower low, lower high Candle: Thick green body, majority in lower part of candle, long top wick Advance/Decline: 1.85, about 2 advancers for every decliner Sectors: Energy ( XLE +3.07%), Communications ( XLC +2.25%) were top, Health ( XLV -0.82%) was bottom. Expectation: Sideways Market Overview The market sold off heavily on Friday after a big day of earnings releases that did not meet the demands of investors who were already nervous from the resurging pandemic and the pending turmoil from next week’s election. There is not much to look at on the good side other than the pullbacks will eventually create new opportunities. The index fell -2.45% in Friday’s session, with an increase in volume as investors sold off equities before the weekend. There was a slight uptick at the end of the day as bulls came in for low priced opportunities, with focus on Energy and Finance sectors. The candle has a long 62% body with a short lower wick from the last few minutes of buying, ending with a 29% closing range. There were about 2.5 declining stocks for every advancing stock. Indexes and Sectors The S&P 500 ( SPX -1.21%) did not lose as much as the Nasdaq but still saw selling on higher volume . All the indexes turned out lower highs and lower lows to end the worst week for equity markets since March. Energy ( XLK +0.56%) and Financials ( XLF +0.26%) were the only sectors with positive numbers. Technology ( XLK -2.21%) and Consumer Discretionary ( XLY -2.18%) shared the bottom of the sector list, with those sectors driving the broader market sell off. Although having many bright spots throughout the week, Communication Services ( XLC -1.69) also had significant losses on Friday. The VIX volatility index increased +1.14% to close the week 38% higher than the previous week and well above September numbers. Bonds Treasury Bond spreads increased for the day. The spreads are in an upward trend channel from an August pivot . No worries from that perspective. Market Leaders Google ( GOOG +3.43%) was the only of the big four mega-caps to have gains. Apple ( AAPL -5.60%) and Amazon ( AMZN -5.45%) both had huge losses after their earnings releases, while Microsoft ( MSFT -1.10%) did not do too bad given the market condition. Each has a bit of a different profile of trading during the day. Google gaped up at market open but then sold throughout the day losing some of the early gains. Microsoft dipped over 3% but was bought back later in the day. Apple followed or drove the market, depending on how you view it, trading almost exactly along the same path. Facebook ( FB -6.31%), Snap (SNAP -6.70%), and Pinterest (PINS -5.70%) soared the past two weeks but gave back some ground on Friday. Most growth stocks did not fair well. Chevron ( CVX +1.02%) and Exxon Mobile ( XOM -1.06%) had opposite reactions after morning earnings reports. Both continued struggling with revenue while Chevron seems to be managing costs better. Looking ahead Next week is the big week that will both answer questions and create new questions. Who will win the election and what impact will that have on the market longer term? Will there be a smooth end to the process, or will the candidates start a long battle to contest the results? Can congress resume discussions for a stimulus or will we have to wait until transitions to new leadership in government? Beyond the election, we will get updates on Manufacturing data early in the week and the Fed is scheduled to announce any interest rate changes on Thursday. Trends, Support and Resistance Since we are in between two support and resistance areas, there is room to move in either direction on Monday. Getting back to the midpoint trend line from the 10/12 pivot would mean a +0.90% gain. That seems a reasonable move after the uptick at today’s close and without any big context changes over the weekend. On the downside, the one-day and five-day trend lines point to about the same place which is a -1.11% loss. The lower trend line is just above the July support area and still within a parallel channel drawn from 10/12. Breaking through this support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching the June support area , a -7.21% loss from today’s close. This downward trend seems to be how the market is heading into the election on Tuesday. Following Tuesday, we could finally see a turn for the better. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (Larger View on the Week) It was another tough week, especially if you are bullish growth investor. There were so many things that could have gone well, from positive earnings beats to the good economic news. But nothing, not even the over the top performance of Social Media stocks (Snap, Pinterest, Facebook, Twitter) could hold up through the week. The Nasdaq fell through several key support areas including the 50d moving average, a line that is often watched as a sign of health for markets. The week started with a negative expectation breaker, smashing hopes formed from the previous Thursday and Friday character changes. More lockdowns, election uncertainty and finally some economic news that did not meet expectations, was too much for the market to hold. That began the back and forth that often occurs as we pivot toward correction territory. Tuesday up, Wednesday down, Thursday up, Friday down. The index closed on Friday for a -5.51% weekly loss, the worst week since March. Investors Business Daily, a great site with market updates for CANSLIM investors, moved quickly from Confirmed uptrend early in the week, to Uptrend under Pressure, until finally marking the Correction on Friday. Hopefully, you all had a chance to raise cash, hedge your investments and move to the sidelines, or to an alternative trading strategy for correcting markets. US Treasury Yield spreads largely not impacted by the stock market performance. Yields are still so low that investors are not exiting the equities market. It was a long painful week for all the sectors with the overall S&P 500 index losing -5.64%, worst since March of this year. Utilities ( XLU ) topped the list of sectors "only" losing -3.66% and remained as the safe place for investors to go to stay into equities instead of the alternatives. There were certainly days that each sector had to shine, but as far as the week-to-date performance, there was not a lot of back and forth as the days progressed in the weekly list of sector winners/losers. Most sectors beat the overall S&P 500 index. The exception is Technology ( XLK ), Consumer Discretionary ( XLY ) and Industrials ( XLI ). Consumer Discretionary just barely beat out Industrials to be the week's loser at a -6.55% loss. In addition to the indexes and the sectors, it is also important to look at how the market leaders are behaving. Each of the big four mega-caps had a different character for the week. Apple (AAPL) came into the week already trending down with the fast moving 21d EMA below the slower 50d MA and widening that gap by the end of the week. Microsoft (MSFT) started the week with the 21d EMA above the 50d MA but investors did not respond well to the guidance in the earnings announcements, gaping down on Wednesday. Amazon (AMZN) was holding up pretty well, looking to form a base and possibly a breakout, but could not overcome the market and investors demands for better performance. Google (GOOG) on the other hand, bucked the trend, coming into the week with the 21d EMA below the 50d MA and leaving the week with huge gains thanks to better than expected recovery in the online advertising business. To me, that shows that investors were not in a sell-everything fear mode this week. There was still some discriminate choices of equities to put money into. That does not mean those stocks will not sell off next week, but it certainly sheds some hope and tells us to keep our eyes on the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead We just came out of a hugely pivotal and impactful week, full of earnings reports and economic news. Next week will be no less important. The biggest event being the election. There will be a lot of uncertainty on Monday and Tuesday in the market. If the early election results are definitive, there’s hope for some stabilization after Tuesday. More likely, there is going to be more drama to come and that will continue the back-and-forth market we have been experiencing the past few weeks. There is hope that stimulus talks will continue and that a deal will be struck, but there is also a lot of nervousness about how the leaders in the Whitehouse and in Congress will act after the election. In addition to that, we’ll have updates on Manufacturing economic data and the Fed is scheduled to update on any interest rate changes on Thursday. The expectation is they will hold to the plan of no interest rate changes. The next week will be a pivotal one for where the market goes next. The questions for the indexes will be whether they can continue the character change from Thursday and Friday and turn that into gains early in the week. They are still testing key support areas and the 21d EMA , often used by investors as an indicator of market health. Economic news will include New Home Sales, Consumer Confidence and Q3 GDP and are all expected to increase. Positive news in these economic indicators could give the market a boost. The earnings calendar includes Berkshire Hathaway (BRKB) on Monday morning and Paypal (PYPL) in the evening. Alibaba (BABA), Uber (UBER) and Square (SQ) report on Thursday. It will be another tough week to safely trade next week. Unless you have a strategy that can play well in volatility, or a good hedge strategy, it’s best to raise some cash and stay on the sidelines. Watch for stocks that are doing well against the market correction and build those into your daily/weekly watch lists. Those are the stocks that will most likely perform well once we get past all the turmoil. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side: The first is the 50-day moving average at 11307.14 right now. It would put a lot of confidence into the market to have the index close back above this level. The next is the 21-day exponential moving average, not too far above the 50-day moving average at 11336.19. There is a resistance area at around 11,300 and 11,400 that are also key to watch. These held back market gains in late September and early October before the index finally broke through. Expect that resistance to come up again. Getting above 11,545.63 would erase a very difficult week and put us back on a path for a rally. Next would be to make it above the high of 10/12 at 11,965.54 which was the downside pivot day from October gains. Passing 12074.06 would be a new all-time high and a clear sign that the bull market is back. On the downside, there are several key levels to raise red flags, many similar to what we watched for last week: 10,822.57 is Friday and last week’s low. The index needs to hold above that low to prevent even further correction-level losses. The next area to watch us the July support area at 10,600. If further losses are to come, then the hope is we'd at least stop at this level. If we break through here, there is danger of a much more damaging decline. 10,519.49 is the September low. The index found itself in that area twice but closed higher during those days. Closing below that line would be significant. Beyond the July support area, there is not much to hold back the index from dropping to the June support area of 10,000. There were only 2-3 days in early July that we were trading between these two levels. At the 10,000 level, there would be a lot of support from the round number psychology as well as the approaching 200d MA. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up How do you feel? That is one of the most important questions you should ask yourself. Your mental health is the most important part of your trading system. Are you disappointed from the last few weeks? Are you feeling anxious about the coming week, the market, the elections and the pandemic? Spend some time to get yourself centered. Next, have a plan. Most of us will plan to stay in cash. If you have some hedging strategies or a trading strategy for volatile markets, then write it out. Spend some time thinking through the what-ifs for the week. Things will move fast, and it’s best to be prepared for multiple possibilities. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 10/30Trend lines drawn the 10/12 pivot day (15d), 10/26 (5d), and today 10/30 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, October 30, 2020 If there's somethin' strange in your neighborhood Who ya gonna call? Facts: -2.45% lower, Volume higher, Closing range: 29%, Red Body: 62% Good: Not much, small uptick at end of day Bad: Lower low Highs/Lows: Higher low, higher high Candle: Thick green body, majority in lower part of candle, long top wick Advance/Decline: 1.85, about 2 advancers for every decliner Sectors: Energy (XLE +3.07%), Communications (XLC +2.25%) were top, Health (XLV -0.82%) was bottom. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The market sold off heavily on Friday after a big day of earnings releases that did not meet the demands of investors who were already nervous from the resurging pandemic and the pending turmoil from next weeks election. There is not much to look at on the good side other than the pullbacks will eventually create new opportunities. The index fell -2.45% in Friday’s session, with an increase in volume as investors sold off equities before the weekend. There was a slight uptick at the end of the day as bulls came in for low priced opportunities, with focus on Energy and Finance sectors. The candle has a long 62% body with a short lower wick from the last few minutes of buying, ending with a 29% closing range. There were about 2.5 declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX -1.21%) did not lose as much as the Nasdaq but still saw selling on higher volume. All the indexes turned out lower highs and lower lows to end the worst week for equity markets since March. Energy (XLK +0.56%) and Financials (XLF +0.26%) were the only sectors with positive numbers. Technology (XLK -2.21%) and Consumer Discretionary (XLY -2.18%) shared the bottom of the sector list, with those sectors driving the broader market sell off. Although having many bright spots throughout the week, Communication Services (XLC -1.69) also had significant losses on Friday. The VIX volatility index increased +1.14% to close the week 38% higher than the previous week and well above September numbers. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond spreads increased for the day. The spreads are in an upward trend channel from an August pivot. No worries from that perspective. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Google (GOOG +3.43%) was the only of the big four mega-caps to have gains. Apple (AAPL -5.60%) and Amazon (AMZN -5.45%) both had huge losses after their earnings releases, while Microsoft (MSFT -1.10%) did not do too bad given the market condition. Each has a bit of a different profile of trading during the day. Google gaped up at market open but then sold throughout the day losing some of the early gains. Microsoft dipped over 3% but was bought back later in the day. Apple followed or drove the market, depending on how you view it, trading almost exactly along the same path. Facebook (FB -6.31%), Snap (SNAP -6.70%), and Pinterest (PINS -5.70%) soared the past two weeks but gave back some ground on Friday. Most growth stocks did not fair well. Chevron (CVX +1.02%) and Exxon Mobile (XOM -1.06%) had opposite reactions after morning earnings reports. Both continued struggling with revenue while Chevron seems to be managing costs better. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Next week is the big week that will both answer questions and create new questions. Who will win the election and what impact will that have on the market longer term? Will there be a smooth end to the process, or will the candidates start a long battle to contest the results? Can congress resume discussions for a stimulus or will we have to wait until transitions to new leadership in government? Beyond the election, we will get updates on Manufacturing data early in the week and the Fed is scheduled to announce any interest rate changes on Thursday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance Since we are in between two support and resistance areas, there is room to move in either direction on Monday. Getting back to the midpoint trend line from the 10/12 pivot would mean a +0.90% gain. That seems a reasonable move after the uptick at today’s close and without any big context changes over the weekend. On the downside, the one-day and five-day trend lines point to about the same place which is a -1.11% loss. The lower trend line is just above the July support area and still within a parallel channel drawn from 10/12. Breaking through this support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching the June support area, a -7.21% loss from today’s close. This downward trend seems to be how the market is heading into the election on Tuesday. Following Tuesday, we could finally see a turn for the better.
NASDAQ:IXIC
by drewby4321
1
Nasdaq Market Update for 10/29Trend lines drawn the 10/12 pivot day (14d), 10/22 (5d), and today 10/28 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, October 29, 2020 It's something unpredictable But in the end is right I hope you had the time of your life Facts: +1.65% lower, Volume lower, Closing range: 60%, Green Body: 47% Good: Traded above yesterday’s low, fat green bullish body Bad: Selling at end of day after 50d MA resistance Highs/Lows: Higher low, higher high Candle: Thick green body, majority in lower part of candle, long top wick Advance/Decline: 1.85, about 2 advancers for every decliner Sectors: Energy (XLE +3.07%), Communications (XLC +2.25%) were top, Health (XLV -0.82%) was bottom. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview It was a reasonably good day following the sell-off on Wednesday. The Nasdaq finished up +1.64% after tempting itself with the 50d MA and September Resistance line. Volume was lower, returning to the recent levels that have represented the wait-and-see level of activity in the market, well below the 50d average volume. The candle has a 47% green body with a 60% closing range which is good considering the bounce from yesterday but also shows not everyone is back in the game yet. Breadth was ok with two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX +1.19%) had a similar day with gains on lower volume that somewhat dropped back at the end of the day. Both the S&P 500 and the Dow Jones Industrial Average (DJI +0.52%) had lower highs and lower lows, putting them further below their key moving averages with the 21d EMA slipping below the 50d MA. Energy (XLE +3.07%) and Communication Services (XLC +2.52%) were the best performing sectors with Energy passing Communications in the last 30 minutes of trading. Keeping an eye on Technology (XLK +1.67%), it had decent gains today ahead of some important earnings announcements. Consumer Staples (XLP -0.03%) and Health (XLV -0.82%) were the only two sectors with losses. The VIX volatility index finally took a step back, losing -6.68%, but the close remains above the September numbers. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond spreads increased for the day. The spreads are in an upward trend channel from an August pivot. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders The mega-caps all faired well after yesterday’s selling. Apple (AAPL +3.71%), Amazon (AMZN +1.52%) Microsoft (MSFT +1.01%) and Google (GOOG +3.34%) had significant gains as did the majority of mega cap companies. Pinterest (PINS +26.92%) followed up great earnings with a huge gain, trying to keep up with rival Snap (SNAP -1.49%) which had is starting to build a base after the huge gains from last week. Lots of growth stocks had good gains on the day. Shopify (SHOP -4.84%) and Spotify (SPOT -3.36%) retreated heading into earnings. So let’s talk about earnings. All of the big tech companies that released earnings reports today, beat expectations. Apple, Google, Amazon, Facebook all had good reports compared to expectations, yet except for Google they sold off in after hours. The same story played out for Shopify. Spotify missed slightly but had great customer adds data. Apple had higher revenue but low performance in China and no guidance. The market, not willing to stomach that, sold off AAPL over -4% in after hours. Facebook is down -2.88% after market, Amazon is down -1.81%. This is also a continuation of earnings beats earlier in the week that have seen losses in the stock price. Investors are looking for the extremely good beats and expectations like the ones we saw from Snap and Pinterest. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead to Tomorrow Tomorrow will be a big day for Energy as Exxon Mobile (XOM +4.43%) and Chevron (CVX +2.87%) will announce earnings before market open. In addition, a plethora of other large cap companies will report before market open. Employment Wages and Personal Consumption Expenditures aren’t expected to have much impact in the context to this week’s other economic indicators and impact of earnings reactions. We already know people are spending more while earning less based on other economic indicators. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance As I stated in yesterday’s update, I removed the trend lines from 9/3 and 9/24 which were having less and less relevance since we pivoted on 10/12 and are approaching the lows of September. For tomorrow, the one day trend line would point to a +2.30% gain that breaks back above the key 21d EMA and 50d MA that often act as support or resistance. Continuing the trend from the 10/12 pivot day as well ad the last five days would result in a -1.06% drop. This is where the trend line points to, but it’s reasonable to believe a continued loss for Friday and into Monday that would take us to the 10,600 support level. Breaking through this area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching that line, a -9.41% loss from today’s close. This downward trend seems to be how the market is heading into the election on Tuesday. Following Tuesday, we could finally see a turn for the better.
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 10/28Trend lines drawn from 9/3 (39d), 9/24 bottom (25d), 10/12 pivot day (13d), 10/22 (5d), and today 10/28 (1d). -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, October 28, 2020 Let down and hanging around Crushed like a bug in the ground Facts: -3.73% lower, Volume higher, Closing range: 2%, Red Body: -90% Good: Nothing Bad: Gap down, deep red candle, ending at the days lows, broke below 50d MA Highs/Lows: Lower low, lower high Candle: Very tiny wicks on either side of a fat red body Advance/Decline: 0.16, 6 decliners for every one advancer Sectors: All sectors down, Real Estate (XLRE -2.22%) and Financials (XLF -2.56%) held up best. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The day was not so much of a surprise but still hurts for a bull in the market. Sure, there were hopes for a bounce off the 50d MA or bulls coming in at the end of the day to buy the dip. But none of that happened. The Nasdaq finished down -3.73%, well below the 50d MA and testing the round number area of 11,000. Round number support is created by the tendency for investors to pick big round numbers as buy/sell triggers. The candle has a huge 90% red body with tiny wicks on top and bottom and a dismal 2% closing range. There were many more declining stocks than advancing stocks at a 6:1 to ratio with the broader NYSE seeing a 10:1 ratio. Volume on the Nasdaq had a huge 28.4% increase over the previous day and is above average volume for the past 50 days. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX -3.53%) and Dow Jones Industrial Average (DJI -3.43%) indexes also saw big losses on increased volume. The Dow Jones Industrial went below September lows. The Russell 2000 (RUT -2.98%) faired slightly better, but still saw big losses. All sectors were losers with Real Estate (XLR -2.22%) and Financials (XLF -2.56%) holding up the best. Technology (XLK -4.24%) was the worst sector of the day. Communication Services (XLC -3.93%) and Energy (XLE -4.18%) also underperformed the SPX index, with Energy having some positive gains after Crude Oil Inventories were announced, but later selling off. Utilities (XLU -2.91%) was strongest in morning trading, before giving up to the excessive selling. The VIX volatility index increased a whopping +20.78% to add to the weeks gains which are now at 46.21% and exceeding the volatility highs of September. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds Treasury Bond spreads stayed about the same as the previous day. This is something to keep an eye on, but the spread is still in an upward trend channel from an August pivot. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders The mega-caps were all impacted by the selling with Microsoft (MSFT -4.96%), Apple (AAPL -4.63%), Google (GOOG -5.46%), Amazon (AMZN -3.76%) all dropping significantly. All of them closed below their 50d MA. Add Tesla (TSLA -4.29%), Facebook (FB -5.51%) and every other company over 200B market cap to that list. Not even one was spared. On the other hand, there were some bright spots elsewhere in the market. Chewy (CHWY +6.33%) continued its breakout despite the heavy selling. Twilio (TWLO +3.73%) finally got some credit for a good earnings report after selling earlier this week. Pinterest (PINS -6.23%) turned a big loss into huge >30% gains after the market closed thanks to their earnings report. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead to Tomorrow Tomorrow is the week’s big day with an enormous number of companies announcing quarterly earnings including Google, Amazon, Apple, Facebook, Starbucks (SB -3.30%) after market close. Shopify (SHOP -5.19%) will release earnings before market open. The big economic news tomorrow will include the Gross Domestic Product. It is expected to show a record amount of growth but remember that this quarter will follow the worst quarter in history, and it is not an indicator of future economic activity. Any initial excitement in the market on this data alone, would certainly sell off without additional reasons to support gains. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance For trend lines and expectation circles, I’ve grayed out the trend lines from the 9/3 correction start and the 9/24 bottom. These trend lines have lost significance against the current trend lines, and I’ll remove them in the next update. However, the trend from the 10/12 pivot day (which becomes the top in the current wave), and the 5d trend provide for the possibility of a +1.56% gain tomorrow. This would put the index just below September resistance area that held prices down in early October. Continuing today’s trend which was mostly flat after the initial sell-off would mean a -0.49% loss tomorrow and would break through the 11,000 round number resistance. Beyond the trend lines, there are two support areas to watch for. The first is at 10,600 which is where we found the bottom of 10,519.49 in September. Breaking through this area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching that line. An additional -8.18% loss to that area feels within the realm of possible outcomes.
NASDAQ:IXIC
by drewby4321
Nasdaq Week In Review - 10/19/2020 - 10/23/2020The Nasdaq Week in Review is my weekend homework where I look over what happened in the previous week and what might come in the next week. It helps me evaluate my observations, recognize new data points, and make a plan for possible scenarios in the near future. If you find this helpful, please let me know in the comments. I'm also more than happy to add new perspectives and data points if you have ideas. The structure is the following: A recap of the daily updates that I do here on TradingView. Larger view on the past week What's coming in the next week Key index levels to watch out for Wrap-up -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, October 19, 2020 Pray tomorrow takes me higher Facts: 1.65% lower, Volume higher, Closing range: 8%, Red Body: 78% Good: Held above 21d EMA , volume still not super high Bad: Almost everything, start up 1% but go down the whole day Candle: 78% red body with 8% closing range. Advance/Decline: 0.35, twice as many stocks declining than advancing Sectors: All sectors were down, but Utilities ( XLU ) was the best performing of the day. Energy ( XLE ) led with gains in the morning. Technology ( XLK ) and Communications ( XLC ) were worst of day. Expectation: Sideways or Lower The stock market opened the week on a sour note on Monday. After being up 1% at open, the market quickly turned and trended downward the entire day. The Nasdaq finished the day -1.65% lower on higher volume (my indicator above is from QQQ ). The candle is a large red body of 78%, with a short upper wick from the morning gains. A closing range of 8% shows we ended the day at the bottom. There were twice as many declining stocks than advancing. Although volume was higher, it is still lower than recent average volume . The index is testing the October support area as well as the 21d EMA. The S&P500 lost 1.63% on the day. None of the sectors ended the day with gains. Utilities ( XLU ) performed the best. Energy ( XLE ) had early morning gains before pivoting and losing ground. Communications ( XLC ) and Technology ( XLK ) were the worst performing of the day. If the 21d EMA support can hold, then a small gain around 0.80% might be expected. That would continue the trend from the 10/12 pivot and also meet up with the 5d line and the trend line from the 9/23 bottom. With good news on stimulus or the pandemic, that could bring the index back to it's longer trend from early September which points to a 4.21% gain. However, the index is trading in the lower half of that regression channel. Continuing today's downward trend would take the index below the 21d EMA for a -1.93% loss. It would likely get support at the 50d MA as well as the September support area of 11,300. Going further than that would be a very negative signal and we would put our eye on the July support area of 10,600. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, October 20, 2020 I know why you want to hate me Facts: 0.33% higher, Volume higher, Closing range: 28%, Red Body: 9% Good: Stayed above yesterday’s low and holding above 21d EMA Bad: Very choppy day with selling into close Highs/Lows: Lower high, Higher low (Inside day) Candle: Inside day, 9% red body with 28% closing range. Advance/Decline: 1.18, slightly more advancing than declining Sectors: Utilities ( XLE ) finished the day on top. Consumer Discretionary ( XLY ) and Finance ( XLF ) led at mid-day but fell off. Consumer Staples ( XLP ) was the worst performing. Expectation: Sideways or Lower It was a choppy day with many moves back and forth. After being up 1.34% at one point in the day, the Nasdaq dropped in afternoon selling, ending the day with a 0.33% gain. The candle has a thin negative body of 9% and a lower closing range of 28%. The inside day (recognized by the price range being within the previous days range) often marks a continuation of the current trend. There were slightly more advancing stocks than declining stocks. Although volume was higher, it is still lower than recent average volume . The index is still testing October support area and the 21d EMA . Breaking the 21d EMA would be a negative signal. The S&P500 gained +0.47%, with Utilities ( XLE ) ending the day as the leading sector. Consumer Discretionary ( XLY ) and Financials ( XLF ) both led at mid-day but lost those gains in the late afternoon. Consumer Staples ( XLP ) was the worst performing sector today and the only sector with a loss. The mega-caps all saw gains with Apple ( AAPL +1.32%) and Google ( GOOG +1.39%) outperforming the indexes. Microsoft ( MSFT +0.20%) and Amazon ( AMZN +0.31%) turned in smaller gains. Growth stock Tesla ( TSLA -2.06%) continues to lose ground heading in Wednesday earnings . Logitech ( LOGI +15.76%) had a huge gap up after bearing expectations. Some 2020 favorites such as Zoom (ZM -5.51%), Datadog ( DDOG -2.75%), and Pinterest (PINS -1.09%) had losing days. Snap (SNAP -0.74%) is up over 22% after hours after also smashing expectations. As for expectations, a lot depends on news coming from ongoing stimulus discussions. A positive sign of an agreement could have the index bounce of this support area and move up +3.65% to rejoin the trend line drawn from the 9/23 bottom. Another potential outcome is that stimulus talks continue and investors remain optimistic which could result in a +1.02% gain, continuing today’s trend line and rejoining the trend from 9/3. The index is trading in the lower half of all these regression trends. However, there seems to be good support at the 21d EMA and so a downward move looks like it would be limited to a -0.22% loss. That would continue along the trend drawn from the pivot on 10/12. If investor sentiment were to worsen, the index could break through the 21d EMA and then hopefully find support at the 50d MA. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, October 21, 2020 Have you heard about the Lonesome Loser? He's a loser but he still keeps on trying. Facts: 0.28% lower, Volume lower, Closing range: 6%, Red Body: 33% Good: Still holding above 21d EMA Bad: Another choppy day with selling into close Highs/Lows: Lower high, Higher low (Inside day) Candle: Inside day, 33% red body with 6% closing range. Advance/Decline: 0.61, ratio of 3:2 decliners to advancers Sectors: Communication Services ( XLC ) stole the day as the big winner. Energy ( XLE ) was the worst performing. Expectation: Sideways or Lower Wednesday was a continuation of Tuesday with an attempt to make gains that sold off in a choppy fashion throughout the rest of the day. After gaining 0.84%, the Nasdaq dropped to close with a -0.28% loss. The candle has a very tiny lower wick with a 33% red body and 6% closing range. Another inside day (recognized by the price range being within the previous days range) shows little direction in which way the market will go. There were more declining stocks than advancing stocks at a ratio of 3:2. Volume was lower than the previous day and continues to be lower than recent averages. The index is still testing October support area and the 21d EMA . Breaking the 21d EMA would be a negative signal. The S&P500 lost -0.22%, despite all the efforts of Communication Services ( XLC ) sector which gained 1.68%. Most of the other sectors incurred losses of around 0.5%. Industrials ( XLI ) lost -1.01%. Energy ( XLE ) was the worst performing sector with a loss of -1.91%. Google ( GOOG +2.4%), Facebook ( FB +4.17%) and Twitter ( TWTR +8.39%) drove huge gains in the Communication Services sector, possibly all helped by the Snap (SNAP +28.30%) earnings beat which earned the social platform a massive gain. Netflix ( NFLX -6.92%) retreated on news of lower than expected earnings and slowing subscriber growth. Other mega-caps Apple ( AAPL -0.24%), Amazon ( AMZN -1.0%) and Microsoft ( MSFT -0.09%) did not fair as well with Apple and Amazon closing below 21d EMA and 50d MA lines. Tesla ( TSLA +0.17%) announced an earnings beat after market close and is up over 3% in after hours trading. Recent growth favorites Peloton (PTON -5.78%), Fiverr ( FVRR -9.30%) and Datadog ( DDOG -5.91%) are all losing recent gains. The trend lines provide a few possibilities, but much still depends on news coming from ongoing stimulus discussions. With some positive news, a gain of +3.70% would rejoin the trend line drawn from the 9/23 bottom. If the mega-caps and a breadth of stocks of regain ground, a more likely result would be a +1.39% gain, rejoining the trend from 9/3. With all but XLC having a challenging Wednesday, the big test for Thursday will be whether the index can hold above the October support and 21d EMA lines. That support looks in jeopardy at this point given the momentum. A downward move looks like it would be around -0.52% loss, possibly dipping below the 21d EMA and then coming back up to as a resistance line. That would continue today’s trend line and the trend drawn from the pivot on 10/12. If investor sentiment were to worsen, the index could go further below the 21d EMA and then hopefully find support at the 50d MA. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, October 22, 2020 Livin’ on a prayer. Facts: 0.19% higher, Volume lower, Closing range: 76%, Red Body: -12% Good: Reversed from morning lows to end day positive Bad: Dipped below 21d EMA Highs/Lows: Lower high, Lower low Candle: Looks like a hammer , 12% red body with 76% closing range. Advance/Decline: 1.76, more advancers than decliners Sectors: Energy ( XLE ) had a huge 4.13% gain. Financial ( XLF ), Health ( XLV ) and Utilities ( XLU ) also had good days. Expectation: Sideways or Higher Finally, there is a bit of character change in the market. After several days of morning gains selling off in afternoon trading, the opposite happened on Thursday. A big morning loss that took the index below the 21d EMA was bought back in the afternoon to end the day with gains. The Nasdaq ended the day with a 0.19% gain. The candle, with a 76% closing range and 12% red body looks like a reversal hammer . That will need to be confirmed with the next few days of trading. Volume was lower (my indicator above is based on QQQ volume ) for the Nasdaq and continues to be lower than average volume in recent weeks. For a true hammer candlestick , we'd want to see higher volume . There were more advancing stocks than declining stocks at a ratio of 1.76. It’s a positive sign that the index regained it’s ground and closed above the 21 day EMA . The S&P500 had a similar pattern and closed the day with a 0.52% gain, led by Energy ( XLE +4.13%) and Financial ( XLF +1.99%). Most of the sectors saw gains on the day. Technology ( XLK -0.24%) and Real Estate ( XLRE -0.70%) were the worst performing. The Russell 2000 Index had gains of 1.65% as investors looked for good opportunities in small cap stocks. Google ( GOOG +1.38%) led the mega-cap stocks with it’s second day of solid gains. Apple ( AAPL -0.96%) and Amazon ( AMZN -0.27%) had losses on the day and continue to trade below their 50 day MA. It would be a positive sign for an overall upward trend if these mega-caps got back above this key line. Chevron ( CVX +3.57%) and Exxon Mobil ( XOM +5.13%) along with almost every energy stock saw gains after talk of consolidation in the industry and layoffs at Exxon. Snap (SNAP +6.77%) continued it’s rally after an earnings breakout. Several growth stocks such as Restoration Hardware ( RH +4.34%) and Zoom (ZM +1.43%) had gains after several days of losses. This is all a good sign, but needs to be confirmed with additional gains from more growth stocks. If the candlestick hammer is confirmed and we see gains from here, trend lines point to two possibilities. The first is a +1.01% gain in the area between today’s trend line and the trend drawn from the 9/3 correction start. Additional positive news could accelerate gains to reach the trend line draw from the 9/23 bottom. That would mean a +3.42% gain. If the index cannot hold above the 21d EMA , then the 5 day trend and trend from the 10/12 pivot would point to a -1.50%. This is where the 50d MA line is at and where we’ve seen support from September trading. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, October 23, 2020 We were runnin' against the wind Facts: 0.37% higher, Volume lower, Closing range: 100%, Green Body: +11% Good: Held above key support at 21d EMA Bad: Low volume , not much price movement Highs/Lows: Higher high (by a fraction), higher low Candle: Long lower wick as investors bought up the lows to end nearly where the day started. Advance/Decline: 1.63, more advancers than decliners Sectors: Communication Services ( XLC ) led the day with +0.94% gain. Consumer Discretionary ( XLY ) also had a good day at +0.88%. Expectation: Higher One more day of reversals to close a choppy week. Every day this week had a morning move that reversed once or more by close. Earlier in the week it was higher highs that reversed to lower lows. At the end of the week, it was lows that reversed to close with gains. Today the Nasdaq ended with a +0.37% gain. The candle has a tiny 11% green body and 100% closing range as the day ended at its high, but not much above where it started. There were more advancing stocks than declining stocks at a ratio of 1.63. Volume was lower than the previous day and much lower than average volume over the past few weeks. The index tested the 21d EMA again and stayed above it. The S&P500 had an even tighter range between open and close and ended with a similar +0.34% gain. Communication Services ( XLC +0.94%) had the best gains among sectors fueled by positive gains from social platforms. Consumer Discretionary ( XLY +0.88%) also did well today, with a mix of discount retailers, auto parts and restaurant/service companies doing well. Technology ( XLK -0.11%) and Energy ( XLE -0.49%) were the worst performing of the day. The Russell 2000 capped off a winning week with another +0.88% gain. Google ( GOOG +1.59%) continued the momentum it has gained the last few weeks while Microsoft ( MSFT +0.62%) and Amazon ( AMZN +0.88%) finally found some support with significant gains. Apple ( AAPL -0.61%) and Amazon remain under their 21d EMA and 50d MA lines. The story of the week has been Snap (SNAP +10.78%) which continues to have incredible gains after it’s earnings release. More growth stocks have turned back toward gains which is a positive sign for continued gains next week. Continuing today’s trend into Monday would mean around a +0.66% gain, splitting the difference between the 1d trend line and the trend drawn from the 9/3 correction. The trend from the 9/24 bottom is +2.67% from today’s close and is a possibility if good news comes over the weekend to fuel gains. As the index continues to test the 21d EMA , it’s possible it can find itself below that line. That would continue this past week’s trend to a -1.29% loss and land under the October Support area . Further losses would find the 50d MA and the index would likely get support at that level. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Larger View on the Week This was not an easy week to be trading in the stock market. It started with a huge disappointment on Monday where the market started with gains and then quickly lost them for a 1.65% loss. And the rest of the week traded in the lower half of Monday's range, testing October support area and dipping below the 21d EMA once. the closing range on the week is 44%, not terrible but also not great. There were some good signs. Despite the dip below the 21d EMA, the index recovered and otherwise traded above that key support line. The character of Monday to Wednesday of higher opens and lower closes changed on Thursday and Friday with lows turning into intraday highs and closing at the upper range of the day's candles. The closing range on Friday was 100% as the market was on an uptrend heading into the weekend. That's good support at the current price range to build a base going into next week. US Treasury Yield spreads were up for the week and continue to be on an upward trend since dipping in mid-July. This is a good sign from investors that they staying out of the bond market and in the stock market. Looking at the mega-caps, Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN) were down on the week with -1.56%, -3.34% and -2.09% losses respectively. Google (GOOG) and Facebook (FB) had great weeks, with +4.32% and +7.09% gains and driving huge gains in the Communication Services sector, specifically social platform stocks. Pinterest (PINS) had a 20% gain. There was the amazing Snap (SNAP) earnings release and 50% gain of that stock. Twitter (TWTR) was up 10%. Beyond those, there were a lot of mixed results. Many of the growth stocks had a tough week although turned in positive gains on Friday. On a daily average, there were more advancers than decliners, but the value of the declines were bigger. Clearly Communication Services (XLC) was the winning sector of the week, but there was also some back and forth in that race. Consumer Discretionary (XLY) came into the week as the leader, with early gains that faded later in the week. Energy (XLE) had a huge day on Thursday with +4.13% gains that put it at the top of the sectors for a day before giving up the lead to Communication Services on Friday. Financials (XLF) had a good week and Utilities (XLU) continues to turn in consistent performance as a safe bet for conservative investors. It's not often that Technology (XLK) finds itself at the bottom of the sector list, and that is really where to story begins for next week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead The next week will be a pivotal one for where the market goes next. The questions for the indexes will be whether they can continue the character change from Thursday and Friday and turn that into gains early in the week. They are still testing key support areas and the 21d EMA, often used by investors as an indicator of market health. Economic news will include New Home Sales, Consumer Confidence and Q3 GDP and are all expected to increase. Positive news in these economic indicators could give the market a boost. However, probably more attention will be paid to big earnings releases happening next week. There is a huge number of earnings reports scheduled, with a high concentration of technology stocks. Given the technology sector just had an awful week and still influences the broader stock market heavily, the positive and negative earnings reports could have a huge impact. Microsoft (MSFT) will announce on Tuesday, 10/27 and Apple will announce on Thursday 10/29. Shopify (SHOP) which has had a huge growth year, also reports on Thursday. Of course, you can't discount the influence of the election and the continuing worldwide pandemic. The election seems to already be priced in, but uncertainty around the results and how the candidates will react in either direction is making everyone nervous. The pandemic is accelerating with new highs in daily case counts and people are watching closely what that does to hospital bed availability and death rates worldwide. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side: 11,642.87 is the current 10d Moving Average. Getting above this line would be a good sign that the turning character from the end of the week is continuing to build momentum. Next would be to make it above the high of 10/12 at 11,965.54 which was the downside pivot day from October gains. Passing 12074.06 would be a new all time high and a clear sign that the bull market is intact and the short September correction is over. On the downside, there are several key levels to raise red flags, many similar to what we watched for last week: 11,400 is the October support/resistance area. The index dipped below this line briefly on Thursday. This is where the 21d EMA is at now. 11,369.29 is last weeks low. Let's hope we do not find a new low this week. Things would get more serious if we went below the 11,300 September support area . A lot of time was spent at this level going back and forth before finally breaking back above. This is where the 50d MA is at now. The next area to watch would be the July support area at 10,600. If we were to see a significant pullback this week, then the hope is we'd at least stop at this level. If we break through here, there is danger of a much more damaging decline. Beyond the July area, there is not much to hold back the index from dropping to the June support area of 10,000. There were only 2-3 days in early July that we were trading between these two levels. At the 10,000 level, there would be a lot of support from the round number psychology as well as the 200d MA. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Next week will certainly be an intense one to watch. Will we have huge gains from positive economic news and earnings reports? Or will the news disappoint and we have big losses? Or maybe, nothing. Maybe more sideways because investors just want to wait and see on the election and coronavirus news. Either way, it's important to have a plan. Watch for the key levels in the market, and weigh your exposure against the level of risk you see. Making smaller bets and adding after things go you way is a good approach. Raising cash and waiting it out is also a valid strategy for uncertain weeks. Good luck and trade safe!
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 10/23Trend lines drawn from 9/3 (36d), 9/24 bottom (22d), 10/12 pivot day (10d), 10/19 (5d), and today 10/23 (1 day). Friday, October 23, 2020 We were runnin' against the wind Facts: 0.37% higher, Volume lower, Closing range: 100%, Green Body: +11% Good: Held above key support at 21d EMA Bad: Low volume, not much price movement Highs/Lows: Higher high (by a fraction), higher low Candle: Long lower wick as investors bought up the lows to end nearly where the day started. Advance/Decline: 1.63, more advancers than decliners Sectors: Communication Services (XLC) led the day with +0.94% gain. Consumer Discretionary (XLY) also had a good day at +0.88%. Expectation: Higher One more day of reversals to close a choppy week. Every day this week had a morning move that reversed once or more by close. Earlier in the week it was higher highs that reversed to lower lows. At the end of the week, it was lows that reversed to close with gains. Today the Nasdaq ended with a +0.37% gain. The candle has a tiny 11% green body and 100% closing range as the day ended at its high, but not much above where it started. There were more advancing stocks than declining stocks at a ratio of 1.63. Volume was lower than the previous day and much lower than average volume over the past few weeks. The index tested the 21d EMA again and stayed above it. The S&P500 had an even tighter range between open and close and ended with a similar +0.34% gain. Communication Services (XLC +0.94%) had the best gains among sectors fueled by positive gains from social platforms. Consumer Discretionary (XLY +0.88%) also did well today, with a mix of discount retailers, auto parts and restaurant/service companies doing well. Technology (XLK -0.11%) and Energy (XLE -0.49%) were the worst performing of the day. The Russell 2000 capped off a winning week with another +0.88% gain. Google (GOOG +1.59%) continued the momentum it has gained the last few weeks while Microsoft (MSFT +0.62%) and Amazon (AMZN +0.88%) finally found some support with significant gains. Apple (AAPL -0.61%) and Amazon remain under their 21d EMA and 50d MA lines. The story of the week has been Snap (SNAP +10.78%) which continues to have incredible gains after it’s earnings release. More growth stocks have turned back toward gains which is a positive sign for continued gains next week. Continuing today’s trend into Monday would mean around a +0.66% gain, splitting the difference between the 1d trend line and the trend drawn from the 9/3 correction. The trend from the 9/24 bottom is +2.67% from today’s close and is a possibility if good news comes over the weekend to fuel gains. As the index continues to test the 21d EMA, it’s possible it can find itself below that line. That would continue this past week’s trend to a -1.29% loss and land under the October Support area. Further losses would find the 50d MA and the index would likely get support at that level. I'm keeping the June Support line in view, but its ~13% below the Friday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 10/21Trend lines drawn from 9/3 (34d), 9/24 bottom (20d), 10/12 pivot day (8d), 10/15 (5d), and today 10/21 (1 day). Wednesday, October 21, 2020 Have you heard about the Lonesome Loser? He's a loser but he still keeps on trying. Facts: 0.28% lower, Volume lower, Closing range: 6%, Red Body: 33% Good: Still holding above 21d EMA Bad: Another choppy day with selling into close Highs/Lows: Lower high, Higher low (Inside day) Candle: Inside day, 33% red body with 6% closing range. Advance/Decline: 0.61, ratio of 3:2 decliners to advancers Sectors: Communication Services (XLC) stole the day as the big winner. Energy (XLE) was the worst performing. Expectation: Sideways or Lower Wednesday was a continuation of Tuesday with an attempt to make gains that sold off in a choppy fashion throughout the rest of the day. After gaining 0.84%, the Nasdaq dropped to close with a -0.28% loss. The candle has a very tiny lower wick with a 33% red body and 6% closing range. Another inside day (recognized by the price range being within the previous days range) shows little direction in which way the market will go. There were more declining stocks than advancing stocks at a ratio of 3:2. Volume was lower than the previous day and continues to be lower than recent averages. The index is still testing October support area and the 21d EMA. Breaking the 21d EMA would be a negative signal. The S&P500 lost -0.22%, despite all the efforts of Communication Services (XLC) sector which gained 1.68%. Most of the other sectors incurred losses of around 0.5%. Industrials (XLI) lost -1.01%. Energy (XLE) was the worst performing sector with a loss of -1.91%. Google (GOOG +2.4%), Facebook (FB +4.17%) and Twitter (TWTR +8.39%) drove huge gains in the Communication Services sector, possibly all helped by the Snap (SNAP +28.30%) earnings beat which earned the social platform a massive gain. Netflix (NFLX -6.92%) retreated on news of lower than expected earnings and slowing subscriber growth. Other mega-caps Apple (AAPL -0.24%), Amazon (AMZN -1.0%) and Microsoft (MSFT -0.09%) did not fair as well with Apple and Amazon closing below 21d EMA and 50d MA lines. Tesla (TSLA +0.17%) announced an earnings beat after market close and is up over 3% in after hours trading. Recent growth favorites Peloton (PTON -5.78%), Fiverr (FVRR -9.30%) and Datadog (DDOG -5.91%) are all losing recent gains. The trend lines provide a few possibilities, but much still depends on news coming from ongoing stimulus discussions. With some positive news, a gain of +3.70% would rejoin the trend line drawn from the 9/23 bottom. If the mega-caps and a breadth of stocks of regain ground, a more likely result would be a +1.39% gain, rejoining the trend from 9/3. With all but XLC having a challenging Wednesday, the big test for Thursday will be whether the index can hold above the October support and 21d EMA lines. That support looks in jeopardy at this point given the momentum. A downward move looks like it would be around -0.52% loss, possibly dipping below the 21d EMA and then coming back up to as a resistance line. That would continue today’s trend line and the trend drawn from the pivot on 10/12. If investor sentiment were to worsen, the index could go further below the 21d EMA and then hopefully find support at the 50d MA. I'm keeping the June Support line in view, but its ~13% below the Wednesday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.
NASDAQ:IXIC
by drewby4321
2
Nasdaq Market Update for 10/20Trend lines drawn from 9/3 (33d), 9/24 bottom (19d), 10/12 pivot day (7d), 10/14 (5d), and today 10/20 (1 day). Tuesday, October 20, 2020 I know why you want to hate me Facts: 0.33% higher, Volume higher, Closing range: 28%, Red Body: 9% Good: Stayed above yesterday’s low and holding above 21d EMA Bad: Very choppy day with selling into close Highs/Lows: Lower high, Higher low (Inside day) Candle: Inside day, 9% red body with 28% closing range. Advance/Decline: 1.18, slightly more advancing than declining Sectors: Utilities (XLE) finished the day on top. Consumer Discretionary (XLY) and Finance (XLF) led at mid-day but fell off. Consumer Staples (XLP) was the worst performing. Expectation: Sideways or Lower It was a choppy day with many moves back and forth. After being up 1.34% at one point in the day, the Nasdaq dropped in afternoon selling, ending the day with a 0.33% gain. The candle has a thin negative body of 9% and a lower closing range of 28%. The inside day (recognized by the price range being within the previous days range) often marks a continuation of the current trend. There were slightly more advancing stocks than declining stocks. Although volume was higher, it is still lower than recent average volume. The index is still testing October support area and the 21d EMA. Breaking the 21d EMA would be a negative signal. The S&P500 gained +0.47%, with Utilities (XLE) ending the day as the leading sector. Consumer Discretionary (XLY) and Financials (XLF) both led at mid-day but lost those gains in the late afternoon. Consumer Staples (XLP) was the worst performing sector today and the only sector with a loss. The mega-caps all saw gains with Apple (AAPL +1.32%) and Google (GOOG +1.39%) outperforming the indexes. Microsoft (MSFT +0.20%) and Amazon (AMZN +0.31%) turned in smaller gains. Growth stock Tesla (TSLA -2.06%) continues to lose ground heading in Wednesday earnings. Logitech (LOGI +15.76%) had a huge gap up after bearing expectations. Some 2020 favorites such as Zoom (ZM -5.51%), Datadog (DDOG -2.75%), and Pinterest (PINS -1.09%) had losing days. Snap (SNAP -0.74%) is up over 22% after hours after also smashing expectations. As for expectations, a lot depends on news coming from ongoing stimulus discussions. A positive sign of an agreement could have the index bounce of this support area and move up +3.65% to rejoin the trend line drawn from the 9/23 bottom. Another potential outcome is that stimulus talks continue and investors remain optimistic which could result in a +1.02% gain, continuing today’s trend line and rejoining the trend from 9/3. The index is trading in the lower half of all these regression trends. However, there seems to be good support at the 21d EMA and so a downward move looks like it would be limited to a -0.22% loss. That would continue along the trend drawn from the pivot on 10/12. If investor sentiment were to worsen, the index could break through the 21d EMA and then hopefully find support at the 50d MA. I'm keeping the June Support line in view, but its 15% below the Tuesday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.
NASDAQ:IXIC
by drewby4321
Nasdaq Market Update for 10/19Trend lines drawn from 9/3 (32d), 9/24 bottom (18d), 10/12 pivot day (6d), 10/13 (5d), and today 10/19 (1 day). Monday, October 19, 2020 Pray tomorrow takes me higher Facts: 1.65% lower, Volume higher, Closing range: 8%, Red Body: 78% Good: Held above 21d EMA , volume still not super high Bad: Almost everything, start up 1% but go down the whole day Candle: 78% red body with 8% closing range. Advance/Decline: 0.35, twice as many stocks declining than advancing Sectors: All sectors were down, but Utilities ( XLU ) was the best performing of the day. Energy ( XLE ) led with gains in the morning. Technology ( XLK ) and Communications ( XLC ) were worst of day. Expectation: Sideways or Lower The stock market opened the week on a sour note on Monday. After being up 1% at open, the market quickly turned and trended downward the entire day. The Nasdaq finished the day -1.65% lower on higher volume (my indicator above is from QQQ ). The candle is a large red body of 78%, with a short upper wick from the morning gains. A closing range of 8% shows we ended the day at the bottom. There were twice as many declining stocks than advancing. Although volume was higher, it is still lower than recent average volume . The index is testing the October support area as well as the 21d EMA . The S&P500 lost 1.63% on the day. None of the sectors ended the day with gains. Utilities ( XLU ) performed the best. Energy ( XLE ) had early morning gains before pivoting and losing ground. Communications ( XLC ) and Technology ( XLK ) were the worst performing of the day. If the 21d EMA support can hold, then a small gain around 0.80% might be expected. That would continue the trend from the 10/12 pivot and also meet up with the 5d line and the trend line from the 9/23 bottom. With good news on stimulus or the pandemic, that could bring the index back to it's longer trend from early September which points to a 4.21% gain. However, the index is trading in the lower half of that regression channel. Continuing today's downward trend would take the index below the 21d EMA for a -1.93% loss. It would likely get support at the 50d MA as well as the September support area of 11,300. Going further than that would be a very negative signal and we would put our eye on the July support area of 10,600. I'm keeping the June Support line in view, but its 9% below the Friday close and there are 4 key support levels that the index would have to break thru. If we have a significant downside that takes the index below 11,300, then I'll add that possibility back to the chart.
NASDAQ:IXIC
by drewby4321
2
Nasdaq Weekly Review - 10/12/2020 - 10/16/2020This is a first attempt at writing up my weekend homework. I look back over the week and review what happened in the market. What were my expectations each day and then what actually happened? What can I learn from expectation breakers? And then I look at what is coming in the week ahead. Monday, October 12, 2020 I'm a keep on chillin', refillin' and flyin' high Facts: 2.56% gain, Higher volume, Closing range: 66%, Green Body: 55% Good: Follow-through day for the Nasdaq. An FTD is a indicator from the CANSLIM system and Investors Business Daily. Bad: Not much, except som selling late in the afternoon Candle: 55% green body with 66% closing range. The almost constant upward movement created a fat green body, but the day finished off with some selling the created a short upper wick. Advance/Decline: 1.17, a few more advancers then declines but not the same breadth as previous week Sectors: Technology (XLK) and Communications (XLC) led the day. Materials (XLB) and Industrials (XLI) lagged behind. Energy (XLE) had an afternoon surge. Expectation: Sideways It was a magnificent start to the week for the Nasdaq with a gap up and +2.56 gain on higher volume . A confirmed FTD for those who follow CANSLIM and IBD. The candle has a fat green body with a 66% closing range and tiny wicks at the top and bottom. It was upward most of the day with some profit taking in the late afternoon. All of the trend lines are on an upward slope. Continuing today's momentum would result in a +2.30% gain and a new all time high. There is likely to be some resistance as we approach that level. So expect a more modest gain from the 5d trend line which is at +0.65%. A small pullback would not be unwelcome to cool things off just a bit. Meeting back up with the trend from the September bottom would mean a -0.92% loss. The trend line from 9/3 is still -4.52% below the current index price. That big of a drop seems unlikely and would require some significant news. But always have a game plan, anything can happen. Tuesday, October 13, 2020 Let There Be Rock Facts: 0.1% Lower, Lower volume, Closing range: 34%, Red Body: 30% Good: Held at the upper range of the previous days price range. Bad: Indecisive inside day with a thinner body, lows and highs were traded two times each Candle: 30% green body, 35% closing range, Inside day Advance/Decline: 0.53, almost twice as many decliners as advancers Sectors: Technology (XLK) and Consumer Discretionary (XLC) led the day while Energy (XLE) had a huge advance near close. Financial (XLF) and Real Estate (XLRE) moved lower on earnings expectations. Expectation: Sideways or Lower The Nasdaq took a breather from the previous days big gains. The index dropped back -0.1% with an inside day. The 30% red body shows some indecision throughout the day with a lean toward bearish in the 34% closing range. It would be better to have that closing range be at least 40% to show more bullish support. Lower volume on the index is good given the bearishness, but SPX had higher volume with a significantly bearish movement. Declining stocks outnumbered advancing stocks at a ratio of 3:2. Continuing today's sideways move would land the index in nearly the same spot tomorrow and also join up with the longer trend from the the 9/23 bottom. Picking back up the 5 day trend would result in a +2.20% gain and a new all time high. There is likely to be more resistance as we approach that level. So I'd expect any gains to be contained within 1.5%, just under the previous all time high. Given the indecisive Tuesday, a more severe pullback is also a possibility. Meeting back up with the trend from early September would result in a -3.67% loss where the index would find support from October trading ranges. Wednesday, October 14, 2020 We're running wild and we're restless Facts: 0.8% Lower, Volume Lower, Closing Range: 24%, Red Body: 53% Good: Held above Monday's lows, so the FTD is still good Bad: Tried but could not find higher ground late in day Candle: 53% red body with 24% closing range, the long red body showed little support for any gains throughout the day. Advance/Decline: 0.38, much more decliners than advancers Sectors: Materials (XLB), Industrials (XLI) and Utilities (XLU) all shared the limelight as investors rushed for safer bets. Expectation: Sideways or lower The Nasdaq continued to rest from it's recent aggressive gains, dropping -0.8%. It's still trading within the highs and lows of the bullish day on Monday. The candle has a 53% Red body with a bearish 24% closing range on lower volume than the previous two days. Declining stocks outnumbered advancing stocks at a 2:1 ratio. Materials, Industrial and Utilities were the top three sectors of the day. Energy started the day strong but faded significantly as trading progressed. Communications was the worst sector for the day, after having a strong showing earlier in the week. Tomorrow will bring updates on Jobless claims, Manufacturing, and Crude Oil inventories. Several 2020 favorites are down significantly after hours including Datadog ( DDOG ), Cloudflare (NET) and Fastly ( FSLY ). Fastly is down almost 30% in postmarket trading after cutting Q3 guidance. Start with the positive trends. The five day trend points to a +2.79% gain for tomorrow, which would take the index to near all time highs. That will probably meet up with resistance and so expect closer to +2.5% as the upper limit. If the index moves back towards the trend from the bottom, then expect a +1.41% gain. Further pullback is certainly possible. Meeting back up with the trend from early September would result in a -2.03% loss where the index would find support from October support lines. Based on today's trading range, it's plausible the index will go sideways more and stay above Monday's low. That would be a great sign of strength at the current level. Thursday, October 15, 2020 Baby come back, you can blame it all on me Facts: 0.47% Lower, Lower volume, Closing Range: 85%, Green Body: 85% Good: Gains through out the day, looks like investors are back in the game after the gap down and previous two day sell off Bad: Undercut the low of Monday Follow-thru day, making that a failed FTD Candle: 85% green body with 85% closing range. Gapped down on open but gains throughout the day. Advance/Decline: 0.99, about as many advancers as decliners Sectors: Energy (XLE) was far out in front for the day, likely on oil supply being lower than expected (leading to higher oil prices) Expectation: Higher The Nasdaq took another small step back having dropped -0.47% but recovering from a much lower morning. It did undermine the low from Monday's follow-thru day. The bullish candle has a 85% green body with a strong 85% closing range after falling off a bit late in the day. Volume was lower than the previous three days (my indicator shows higher volume from QQQ , IXIC volume was lower). There were about the same amount of Advancing stocks as there were Declining stocks. Energy was the leading sector of the day with XLE gaining 1.21% from yesterdays close and gained 3.6% from today's open. Compare that to the SPX which dropped -0.15%. Other sectors that did well included Financials, Industrials and the Consumer Discretionary/Staples sectors. Although the day started with a gap down, it trended upward the entire day. A continuation of that 1d trend would result in a 0.77% gain tomorrow, meeting up with the 5d trend line . The trend from the 9/23 bottom points to a 2.06% gain which would be right under expected resistance near the all time highs. Further pullback is certainly possible. The trend from Monday's pivot (including morning gains) would result in a -1.70% loss where the index would meet up with the September correction trend line and find support from October trading. Friday, October 16, 2020 You took my money, you took my time Made me think everything was fine Facts: 0.36% Lower, Lower volume, Closing Range: 13%, Red Body: 50% Good: The morning seemed to continue previous days strength Bad: Double expectation buster from previous day green, and morning gains, resulting in afternoon disappointment Candle: 50% red body with 13% closing range. Upper wick and lower body represent the disappointing end to the week. Advance/Decline: 0.70, more decliners than advancers Sectors: Investors escaped other sectors to the warm safe comfort of Utilities . Consumer Discretionary (XLY), Technology (XLK) and Energy (XLE) lead the afternoon sell-off. Expectation: Lower The Nasdaq index action today gave us a great summary of the entire week. An amazing start, and a very disappointing end. Just as Monday was an amazing start to the week, today's morning saw gains of over 1% only to disappoint with -0.36% loss by the end of the day. The candle shows it all with an long upper wick, 50% red body, and a dismal 13% closing range. The only positive is that volume continues to be lower indicating shakeout, but not huge institutional selling. Advancing and Declining stocks remained about equal. Utilities ( XLU ) sector was the leading sector of the day. Utilities is the best safe haven for risk-adverse investors who want to stay in equities vs moving to other currency and bond markets for protection. The alternatives just aren't good. Health ( XLV ) also performed well, supported by the increase in COVID19 cases worldwide. The only positive trend line right now is the one drawn from the 9/24 bottom. If the index were to regain that momentum, it would mean a +2.56% gain on Monday. That would also be approaching all time highs and be over the highs from the prior Monday. Let's hope this Monday will be a typical Monday in this environment. The Big Picture The week brought some mixed signals. There were positives. Although it was disappointing to pull back from Monday's highs, the market needed to settle back down from the accelerated gains of the last few weeks. There are some positive signs. The week was still up with a 0.79 gain for the index. The 11671.56 close is still above the 21d EMA and the 21d EMA is still above the 50d MA, but signs of an upward trend. The highest volume day was Monday and the remainder of the week saw continuously lower volume. That indicates there isn't a mass exit of large institutional investors. Low yields on long term bonds and the performance of other typical safe havens is keeping investors in the stock market. The alternative is that there is a lot of money moving to Utilities, Materials and other safer bets vs what drove the big increases over the several months before September. On the other hand, the way Thursday set expectations for Friday and then broke them heading into the afternoon was a red flag. It could be investors just wanted to put money into safe bets like utilities over the weekend, driving down the price of the market leaders. Or it could be a sign of a faltered rally attempt and more downside to come. It will be important to watch for key support levels in both the index as well as the leading stocks. The big four AAPL, MSFT, AMZN and GOOG all ended the week with gains and above 50d moving averages. GOOG was below this key indicator last week and so was a great showing to see it rise above. AMZN had a bit of a tough week, including Friday where it dove below the 50d MA, but the bulls came in and got it above the key line. Several growth favorites (DDOG, VEEV, ZM to name just a few) had dips, but ended the week with solid gains. On the other hand, the revenue forecast from FSLY, which was forced to be disclosed by acquisition activity, felt a bit like a canary in the coal mine. Is there more negative surprises to come? Looking at the sectors, the continued strength of Utilities (XLU) is showing that investors want a safe bet that keeps them in equities. But there is clearly rotations happening throughout each week as opportunities arise for growth in the Technology (XLK), Communications (XLC) and Consumer (XLY/XLP) sectors. Once those growth opportunities stall, everything goes back to Utilities. Energy (XLE) continues to be interesting to watch. Crude Oil prices have stabilized quite a bit from the downward pressures in 2020. As Crude Oil has had gains, the gains have not yet reflected in the Energy sector. So this is a good one to keep watching. Often Energy will lead the sectors as we head out of a bottom. Key Levels for next Week There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First two on the positive side: Going above Monday's high of 11965.54 would be a great way to start the week. Let's hope Monday will be the typical Monday we've seen recently. Give 10/19 a new name! Passing 12074.06 would be a new all time high and a clear sign that the bull market is intact and the short September correction is over. On the downside, there are several key levels to raise red flags: 11,400 is the October support/resistance area. We did no spend a lot of time in that area so it would not be a huge problem to break below it. This is where the 21d EMA is at now. This would get more serious if we went below the 11,300 September support area. A lot of time was spent at this level going back and forth before finally breaking back above. This is where the 50d MA is at now. The next area to watch would be the July support area at 10,600. If we were to see a significant pullback this week, then the hope is we'd at least stop at this level. If we break through here, there is danger of a much more damaging decline. Beyond the July area, there is not much to hold back the index from dropping to the June support area of 10,000. There were only 2-3 days in early July that we were trading between these two levels. At the 10,000 level, there would be a lot of support from the round number psychology as well as the 200d MA. Wrap-up It will be a week to watch closely which way the market decides to go. We can't fight the market. All we can do is build some expectations, watch for signs of where it will move and then size positions and limit risks as necessary to maximize profits or minimize losses. Good luck and I hope you all have a great week! Did you find this interesting or helpful? Would be great to hear your feedback in the comments. What would you like to be added/removed/changed? I do this primarily for my own education and preparation, but would happy to look at other perspectives and/or data.
NASDAQ:IXIC
by drewby4321
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