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RUSSELL 2000

Daily Market Update for 3/24Trend lines drawn from the 3/5 low (13d), 3/18 (5d) and today 3/24 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, March 24, 2021 Facts: -2.01%, Volume higher, Closing range: 0%, Body: 99% Good: Nothing, even more nothing than yesterday Bad: No wicks, all red body, close below 13,000 support Highs/Lows: Lower high, lower low Candle: Marubozu Black candle, no visible upper or lower wick, all red body Advance/Decline: Five declining stocks for every advancing stock Indexes: SPX (-0.55%), DJI (-0.01%), RUT (-2.35%), VIX (+4.43%) Sectors: Energy (XLE +2.51%) and Industrials (XLI +0.73%) were top. Consumer Discretionary (XLY -1.48%) and Communications (XLC -2.52%) were bottom. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview In the endless rotations, the four cyclical sectors moved from the bottom to the top of the sector list in another session of selling for big tech, consumer discretionary and growth stocks. The Nasdaq closed down -2.01% on higher volume. The 0% closing range comes after an all-day bearish move that formed a 99% red body candle. The tiny upper wick is barely visible and there is no lower wick. There were five declining stocks for every advancing stock. The Russell 2000 (RUT) was the worst performing sector, declining another -2.35%. The S&P 500 (SPX) declined -0.55% and the Dow Jones Industrial average (DJI) declined -0.01%. The VIX volatility index rose +4.43%. The cyclical sectors were back on top for the day with Energy (XLE +2.51%) and Industrials (XLI +0.73%) performing best. Technology (XLK -1.21%), Consumer Discretionary (XLY -1.48%), and Communications (XLC -2.52%) were bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) rose another +0.26%. The US 30y treasury bond and 10y and 2y treasury note yields all declined for another day. The spread between long term and short term narrowed. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both advanced for another day even as stock indexes dropped. Silver (SILVER) remained about flat while Gold (GOLD) advanced for the day. Crude Oil (CRUDEOIL1!) rebounded from its sharp decline. Timber (WOOD) declined. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.751. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moved farther into the fear side. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four of the largest mega-caps declined for the day. Apple (AAPL) lost -2.00%, Amazon (AMZN) lost -1.61%, Alphabet (GOOGL) lost -0.43% and Microsoft (MSFT) lost -0.89%. Microsoft is the only of the four that is trading above its 21d EMA. ASML Holding (ASML) gained +3.53% as the top mega-cap for the day. Exxon Mobil (XOM), Mastercard (MA) and Johnson & Johnson (JNJ) round out the top four. Taiwan Semiconductor (TSM) was at the bottom of the list with a -5.16%. Tesla (TSLA) also gave up significant ground with a -4.82% decline. Only one growth stock, Dr Horton (DHI), in the daily update list had a gain for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Thursday will bring an update on 2020 Q4 GDP numbers. Initial Jobless Claims will also be watched closely for trends in the labor market. There is a 7-Year Treasury Note auction scheduled for the afternoon. Several FOMC members are scheduled to speak throughout the day. For the daily update, there are no relevant earnings releases on Thursday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index fell just below the 13,000 area. Hopefully that will trigger some support and we can see gains in the coming days. The trend line from the 3/5 bottom points to a +3.80% gain for Thursday, which is back above the 21d EMA and 50d MA. The five-day trend line points to a +1.80% gain, just below the 21d EMA. The one-day trend line points to a -1.38% loss and a dip further below the 13,000 support area. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up In the most recent Market Week In Review, I marked 12,985.05 as a key level to stay above and unfortunately today, the index moved below that line. If you aren't already in defensive mode because of the multiple rotations over the past several weeks, now is a time to be in that mode. We can hope the index makes a turn from here and starts to rally, but there's no indication at this point that will happen. 12,783.40 is where the index would meet the lower side of the channel from the March 2020 bottom. The next area to watch for is between 12,500 and 12,600. This would be a new neckline on a head and shoulders pattern that is deeper than the one we previously drew in the daily update. If that pattern played out, the base would be near 11,000. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 3/23Trend lines drawn from the 3/5 low (13d), 3/17 (5d) and today 3/23 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, March 23, 2021 Facts: +1.12%, Volume higher, Closing range: 12%, Body: -76% Good: Nothing Bad: Back below the 21d EMA with a thick red candle Highs/Lows: Lower high, lower low Candle: Mostly red body with tiny upper and lower wicks Advance/Decline: Ten declining stocks for every advancing stock Indexes: SPX (-0.76%), DJI (-0.94%), RUT (-3.58%), VIX (+7.54%) Sectors: Utilities (XLU +1.52%) and Consumer Staples (+0.41%) were top. Industrials (XLI -1.75%) and Materials (XLB -2.08%) were bottom. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The character of the market continues to swing in opposite directions. Expectation was for Sideways or Higher for today, and we got lower. If we were keeping score, you'd notice the expectations I'm setting on a daily basis are broken very consistently over the past few weeks. But it's a good time to remind the reader that the expectations are not predictions, but they are to set and expectation, get our attention when the expectation is broken, and learn what might have changed in the market. Here we go. The Nasdaq closed with a -1.12% decline on higher volume. The candle has small upper and lower wicks, but is mostly red body. The closing range of 12% shows the day very much went to the bears. Few bulls came in to buy back the low prices. The selling was broad, across most sectors, segments and impacted all major indexes. There were 10 declining stocks for every advancing stock. The S&P 500 (SPX) declined -0.76% and the Dow Jones Industrial (DJI) declined -0.94%. The Russell 2000 (RUT) took the worst beating with a -3.58% loss for the day. The VIX volatility index rose +7.52%. Utilities (XLU +1.52%) and Consumer Staples (XLP +0.42%) were the top sectors for the day. Real Estate (XLRE +0.31%) was the only other sector with gains. These three sectors at the top mean investor nervousness. If investors can't exit equities, then they'll move to these defensive plays. The four cyclicals were at the bottom of the list with Industrials (XLI -1.75%) and Materials (XLB -2.08%) being the worst two performing sectors of the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) rose +0.65%. The US 30y treasury bond and 10y and 2y treasury note yields all declined for another day. The spread between long term and short term narrowed. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both advanced for the day. That's an interesting detail given the sell-off in equities. Silver (SILVER) and Gold (GOLD) both declined for another day. Crude Oil (CRUDEOIL1!) resumed a sharp decline from highs earlier this month. Timber (WOOD) declined. Copper (COPPER1!) and Aluminum (ALI1!) also had sharp declines -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.659. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is still near neutral, but moving toward fear. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Of the four largest mega-caps, only Apple (AAPL) declined for the day. However, the other three all closed well below their intraday highs as the market dipped in the second half of the session. Microsoft (MSFT) gained +0.67% and is above its 21d EMA and 50d MA. Amazon (AMZN) gained +0.86% but hit resistance at its 50d MA and closed below the line. Alphabet (GOOGL) briefly traded above its 21d EMA, but ended just below the line with a +0.52% gain. Some mega-caps did much better for the day. Netflix (NFLX) gained +2.29% today. Proctor & Gamble (P&G), Adobe (ADBE) and Walmart (WMT) all closed the day with greater than 1% gains. The mega-cap list has about one advancing for every declining stock. Growth stocks had much smaller ratio of advancing vs declining. Peloton (PTON) and Zoom (ZM) were top advancers with almost 3.5% gains each. So we have Netflix, Peloton and Zoom as top advancing stocks of the day. It's morning where I live and I haven't checked the news yet (I usually check before the wrap-up), but I expect to find news about a resurgence of the pandemic. The market is obvious sometimes. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Several economic news will be released on Wednesday. Durable Goods Orders for February will give a heads-up on manufacturing activity. That will be measured against Manufacturing and Services purchasing data for March which can indicate some direction on increasing or decreasing activity in these sectors. Crude Oil Inventory data will also be released. Fed Chairman Jerome Powell is scheduled to continue testimony before congress on Wednesday. His statements are always watched closely for possible sentiment changes. There will be a 5y treasury note auction tomorrow which will be watched closely. Tencent (TCEHY), General Mills (GIS), RH (RH), KB Home (KBH), GrowGeneration (GRWG), and Guess (GES) are all reporting earnings on Wednesday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index is back below the 21d EMA. The trend line from the 3/5 bottom points to a +2.27% gain for tomorrow, which is back above the 21d EMA and 50d MA, but under the 13,600 resistance area. The five-day trend line points to a 0.66% gain, right at the 21d EMA. The one-day trend line points to a -0.61% loss. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Even as the end of the pandemic nears, it doesn't seem we can quite get past it. Europe lockdowns were extended at the same time the US questioned data from the AstraZeneca vaccine trial. Global investors reacted to the extended pandemic pressures by buying up US dollar and US treasuries, dropping yields that have been gaining in recent weeks. At the same time, Treasury Secretary Janet Yellen spoked to the House Financial Services Committee, expressing concerns for the economy but defending future tax increases. That put pressure on US equities, as investors looked to move to safe haven assets and defensive equity plays. Defensive plays moved to the top of the sector list while cyclicals moved to the bottom. The top pandemic stocks of Peloton (PTON), Zoom (ZM) and Netflix (NFLX) all popped again. The recovery stocks, including travel, leisure, airlines all suffered losses for the day. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
1
Daily Market Update for 3/22Trend lines drawn from the 3/5 low (12d), 3/16 (5d) and today 3/22 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, March 22, 2021 Facts: +1.23%, Volume lower, Closing range: 60% (w/gap), Body: 56% Good: Zero lower wick, strong morning rally to above the 50d MA Bad: Could not stay above 50d MA, losing support late in the session Highs/Lows: Higher high, higher low Candle: No lower wick, green body under a long upper wick. Advance/Decline: Two declining stocks for every advancing stock Indexes: SPX (+0.70%), DJI (+0.32%), RUT (-0.91%), VIX (-9.88%) Sectors: Technology (XLK +1.75%) and Communication Services (XLC +0.66%) were top sectors. Financials (XLF -1.72%) and Energy (XLE -2.00%) were bottom Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Technology stocks showed up big for the first day of the week. The sector outperformed for the day, carrying most of the major indexes to close with positive gains for the day. The advances were not broadly shared, with two declining stocks for every advancing stock. The Nasdaq closed with a +1.23% gain on significantly lower volume. The candle has no lower wick as the opening price level was never revisited after the morning rally. The 56% body sits under a long upper wick that formed during a sell-off just before close. The closing range of 60% includes a gap up at open and is positive, but does represent the weakness at close. The S&P 500 (SPX) and Dow Jones Industrial (DJI) closed with +0.70% and +0.32% gains, largely driven by big tech stocks. The Russell 2000 (RUT) started the day in the positive, but sold off in the morning as the Nasdaq was rallying. The RUT ended the day with a -0.91% gain. The VIX volatility index declined -9.88%, back to its lowest level since February 2020. Technology (XLK +1.75%) was the top performing sector of the day and the only sector to perform better than the broader S&P 500 index. Communication Services (XLC +0.66%) was the next best sector. Financials (XLF -1.72%) and Energy (XLE -2.00%) performed the worst for the day. Energy continues to underperform after having one of its worst weeks in recent memory last week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.09%. The US 30y bond and 10y and 2y treasury note yields all declined for the day, helping drive the gains for big tech and growth stocks. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both advanced for the day. Silver (SILVER) and Gold (GOLD) both declined for the day. Crude Oil (CRUDEOIL1!) gained for the day. Timber (WOOD) declined. Copper (COPPER1!) was about even while Aluminum (ALI1!) continues advancing to its highest point since 2019. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.532. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is still near neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders The four largest mega-caps all had gains for the day. Apple (AAPL) and Microsoft (MSFT) led the way with +2.83% and 2.45% gains. Amazon (AMZN) gained +1.17% and Alphabet (GOOGL) gained +0.18%. To put these gains into perspective though, consider a few things. All of them are on lower volume. Only Microsoft moved back above its 21d EMA line, while Apple attempted but found resistance. None of the gains were at a "breakout" level where the price moves past the high within a base. Overall mega-caps did well with ASML Holding (ASML) topping the list with a 5.22% gain. Baidu (BIDU), Taiwan Semiconductor (TSM) and Intel (INTC) round out the top four mega-caps. At the bottom of the list were Bank of America (BAC) and JPMorgan Chase (JPM), leading the Financials sector lower. Also at the bottom of the list was Toyota Motor (TM) which could have a big impact from a fire at Japanese auto chip manufacturer Renesas. Digital Turbine (APPS) led growth stocks with a big +10.31% gain. This gain was on higher volume and could be considered a breakout. Okta (OKTA), Chewy (CHWY) and Enphase Energy (ENPH) were other leading growth stocks. At the bottom of the growth stock list were three Chinese stocks. FUTU Holdings (FUTU), UP Fintech (TIGR) and Ehang Holdings (EH) all lost more than 6%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead On Tuesday, New Home Sales data will be released. Also, API Weekly Crude Oil stock will be revealed. Fed chairman Jerome Powell will begin testimony before congress where he's expected to applaud the stimulus bill and economic support programs as having a positive impact, but that we are not out of the woods yet for long term economic recovery. There will be a 2y treasury note auction tomorrow which will be watched closely. Adobe (ADBE) will release earnings on Tuesday. It probably doesn't make much difference for the stock price, but GameStop (GME) will also announce earnings on Tuesday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index closed above the 21d EMA today, but was unable to hold support above the 50d MA. The trend line from the 3/5 bottom points to a +1.47% gain for tomorrow, just under the 13,600 support area. The one-day trend line points to a +1.28% gain, and back above the 50d MA. The five-day trend line points to a -1.39% loss, back below the 21d EMA. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a good to start the week with a gain for the Nasdaq. However, the gains were not broadly shared and were on less volume than has been average since the start of the year. Investors are still watching yields closely on treasury notes and bonds, adjusting valuations on sectors such as Technology, Communications and Financials. As they yields continue to be volatile, expect these sectors to also be volatile. Also watch for surprises from the testimony of Jerome Powell to congress. If pressed with questions, investors will be listening closely to his answers to understand the timing of future tapering of bond buying or interest rate hikes. So far, he has been firm and clear that nothing would change through 2023. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
5
Market Week In Review - 3/15/2021 - 3/19/2021The Market 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. I do occasionally have some errors or typos and will correct them in my blog or in the comments on TradingView. I do not have an editor and do this in my free time. 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 view on the past week What's coming in the next week The Bullish View, The Bearish View Key index levels to watch out for Wrap-up If you have been following my daily updates, you can skip down to the “The Meaning of Life”. If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, March 15, 2021 Facts: +1.05%, Volume higher, Closing range: 100%, Body: 73% Good: Close above last week's high and back above 50d MA Bad: Nothing Highs/Lows: Higher high, higher low Candle: No upper wick, most green body over lower wick Advance/Decline: About even advancing and declining stocks Indexes: SPX (+0.65%), DJI (+0.53%), RUT (+0.31%), VIX (-3.19%) Sectors: Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were top. Financials (XLF -0.58%) and Energy (XLE -1.14%) Expectation: Sideways or Higher It was a relatively smooth start to the week as bond yields stayed fairly tame compared to previous weeks. That allowed the tech heavy Nasdaq to continue a rally to catch up with the other indexes. There is still more catchup to do as the S&P 500, Dow Jones Industrial average and Russell 2000 set new all-time highs. After a brief test of the 21d EMA line, the Nasdaq rallied into close for a +1.05% gain on higher volume. The volume increased as the index moved up in the last 30 minutes of trading to end the day with a 100% closing range. The 73% green body is above a lower wick formed from some selling before noon. There were about the same number of advancing stocks as declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, March 16, 2021 Facts: +0.09%, Volume lower, Closing range: 33%, Body: 23% Good: Higher high, higher low, successful test of 50d MA Bad: Low closing range, longer upper wick, could not hold morning rally Highs/Lows: Higher high, higher low Candle: Thin red body underneath a long upper wick Advance/Decline: Over three declining stocks for every advancing stocks Indexes: SPX (-0.16%), DJI (-0.39%), RUT (-1.72%), VIX (-1.20%) Sectors: Communications (XLC +1.05%) and Technology (XLK +0.75%) were top. Industrials (XLI -1.42%) and Energy (XLE -2.85%) were bottom. Expectation: Sideways or Lower An attempted rally in the morning sold off as investors reacted to disappointing economic data, both for February retails sales and industrial and manufacturing production. Gains were limited to fewer stocks and dominated by mega-caps. The Nasdaq closed with a +0.09% gain, but that was down from a 1.19% gain earlier in the day. After testing the 50d MA, the index bounced back up to close a bit below where it opened and leaving behind a 23% red body. The 33% closing range is not great, but the volume was lower than the previous day and lower than average. There were over three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, March 17, 2021 Facts: +0.40%, Volume higher, Closing range: 78%, Body: 58% Good: High closing range on slightly higher volume, support at 21d EMA Bad: Lower high, lower low, dipped below 50d MA Highs/Lows: Lower high, lower low Candle: Green body covers most of candle, similar upper and lower wicks Advance/Decline: About even advancing and declining stocks Indexes: SPX (+0.29%), DJI (+0.58%), RUT (+0.73%), VIX (-2.83%) Sectors: Consumer Discretionary (XLY +1.40%) and Industrials (XLI +1.15%) were top. Health (XLV -0.36%) and Utilities (XLU -1.63%) were bottom. Expectation: Sideways or Higher Investors got what they needed to hear from the fed's Jerome Powell. Interest rates will remain untouched and there will be no tapering of bond buying despite a big upgrade in the fed's outlook on the economy. The change in investor sentiment mid-day was clear as the indexes made a rally. The Nasdaq closed with a +0.4% gain after dipping below the 50d MA and 21d EMA in the morning. The dip came as yields soared and investors worried about what was to come from the Fed meeting. After rallying in the afternoon, the index closed on slightly higher volume with a 78% closing range. The short upper wick above a 58% green body was formed from a small pullback just before close. There were about equal number of advancing and declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, March 18, 2021 Facts: -3.02%, Volume higher, Closing range: 5%, Body: 82% Good: Nothing Bad: Broke below 50d MA and 21d EMA, selling most of the day Highs/Lows: Lower high, lower low Candle: Mostly red body, with no visible lower wick Advance/Decline: Four declining stocks for every advancing stock Indexes: SPX (-1.48%), DJI (-0.46%), RUT (-2.94%), VIX (+12.22%) Sectors: Financials (XLY +0.52%) was the only sector with gains. Technology (XLK -2.77%) and Energy (XLE -4.49%) were the worst performing. Expectation: Lower Did the market wake up with a hangover? After the positive news from the Fed caused a rally late yesterday, the market took a turn downward today. It started again with a surge in bond yields that impact the valuation of big tech and growth stocks. The Nasdaq closed down -3.02% in a painfully red session with only a 5% closing range. The 82% red body with no visible lower wick shows the selling throughout the day. A pause at the 21d EMA could not hold and the selling regained steam into close. There were 4 declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, March 19, 2021 Facts: +0.76%, Volume higher, Closing range: 83%, Body: 45% Good: Support at 13,000 to start morning rally Bad: Rally lost steam in afternoon, lower high, lower low Highs/Lows: Lower high, lower low Candle: Thin green body with lower wick slightly longer than upper wick Advance/Decline: One advancing stock for every declining stock Indexes: SPX (-0.06%), DJI (-0.71%), RUT (+0.88%), VIX (-2.92%) Sectors: Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom. Expectation: Sideways The markets ended another choppy week with one more rotation as investors continue to adjust against what's happening in the bond market. Yesterday's sale of bonds settled down and investors moved back into some growth stocks. But it was not a broad rally, with the Dow Jones Industrial and S&P 500 ending the day with losses. The Nasdaq gained +0.76% on higher volume, but made a new low compared to the previous day and didn’t manage a new high. The closing range of 83% with a 45% green body is from a bullish intraday that testing the 13,000 area and then rallied into the afternoon. The upper wick formed from a tapering in prices after the morning rally stalled. There were more advancing stocks than declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) This week was marked by a battle between the markets and the fed. Investors had to choose what to believe and how to respond. The week started with some nervousness on Monday morning with investors buying up defensive stocks in Utilities in the morning. By afternoon, that nervousness faded as treasury bond yields declined and confidence grew as the market rallied. Tuesday's disappointing retail sales for February didn't seem to have an impact in the morning. Yields were lower at market open, causing Technology and Communication Services stocks to rally. However, markets faded as yields rose throughout the day. By the end of the day, there were more decliners than advancers and the Nasdaq barely held onto a gain for the day. Wednesday was the pivotal day and could define how the market behave for the near term. The Federal Open Market Committee met to discuss the economic outlook and any changes to monetary policy. Jerome Powell spoke in early afternoon and was firm that interest rates would remain low through 2023 despite a better outlook on the economy for 2021. In addition, the Fed would continue to buy treasury bonds and mortgage-backed securities to keep borrowing costs down and investment in growth high. Powell's statement was just what the market wanted to here and stocks rallied into the close on Wednesday. Utilities sank to the bottom of the sector list while Consumer Discretionary and Industrials soared on the enthusiasm. The VIX volatility index dropped to its lowest level since February of 2020. The rally wouldn't last long though. Before the market opened on Thursday morning, treasury bonds sold off sharply and yields rose, bringing the yield curve to its steepest point since 2015. What was all the fuss about? Some of it could be uncertainty that remained in the bond market, maybe investors thinking Powell is underestimated or overestimated the economic rebound for 2021. Initial Jobless Claims were worse than expected, hinting toward more economic trouble New lockdowns in Europe not only hit Oil Prices and the Energy sector, but could make short and long term bonds less favorable. The underlying tone of the steep yield curve echoes the message from Jerome Powell. There is confidence in the shorter term economic recovery, keeping short term yields low. However, by the FOMC and Powell not seeing changes in monetary policy means they still are not confident about the longer term recovery. Investors are following Powell's caution about the longer term and therefore yields are rising faster on longer term bonds. Whatever the reasons, Thursday was marked with broad selling across every sector except Financials. The VIX soared 18% at its intraday high. Mega-caps, growth stocks, energy stocks, almost everything sold off for the day. The Nasdaq lost the 21d EMA and 50d MA lines again and rested just above the 13k area. Friday ended with gains for the Nasdaq, but was a triple-witching day where stock options, stock index futures , and stock index option contracts all expire on the same day. That makes it tough to discern what stocks were bought on high demand or in order to fulfill expiring contracts. Investors will have to wait until Monday to find out which way the market wants to move from here. The Nasdaq closed the week with a -0.79% decline on higher volume. The closing range of 30% shows the underlying weakness of Friday's short rally. It was good to have an upside reversal to close the week, but it wasn't enough to build confidence heading into next week. The Nasdaq did set a higher high and a higher low than the previous week. And the high was better than the high from two weeks ago. That's good news, but the mid-week rallies could not hold the highs for any of the indexes. The Russell 2000 (RUT) lost -2.77% for the week. The S&P 500 (SPX) ended down -0.77% and the Dow Jones Industrial average (DJI) declined -0.46%. The VIX volatility index closed the week with a +1.26 gain. The sectors were all over the place this week, all driven by nervousness about an overheating economy and how the fed might react. Monday started the week with the defensive sector Utilities ( XLU ) at the top. On Tuesday, Retail sales data for February showed the economy wasn't overheating and inflation may not be on the rise. That gave investors some confidence and despite bond yields rising, interest rate sensitive sectors such as Technology ( XLK ) and Communication Services ( XLC ) rose to the top. After the FOMC meeting on Wednesday, Jerome Powell acknowledge the increased outlook on the economy for 2021, but made a firm statement that interest rates would not be raised and bond purchasing programs would continue. You can clearly see the spike in Technology and Communications again after 2:00p on Wednesday. But then bond investors had their reaction on Thursday. As market open approached, bond investors sold heavily in the morning, sending yields on a surge again. Industrials ( XLI ) did well for most of the day but sold off before close. Only Financials ( XLF ) ended the day with a gain. Finally on Friday, bond yields climbed but at a smaller rate with the yield curve flattening a bit. That allowed several sectors to find some upside. Communication Services ended the week as the top sector. Energy ( XLE ) was the worst performing sector of the week as crude oil prices plummeted on less demand, losing over 7.5% and dragging down the Dow Jones Industrial average (DJI) with it. Keep in mind that treasury bond yields are still not extraordinarily high. The US 30y yield and US 10y yield are returning to 2019 and early 2020 levels. But the signal to read from the chart is the yield curve. You can see the US 2y yield has barely moved in relation to the longer term yields. That means investors are seeing less risk in the short term, but more risk in the longer term. The yield curve is at its steepest point since 2015. However, in 2015 it wasn't particularly steep. The concern though is that the trend is toward steepening, and that the only reason it hasn't accelerated further is because the fed is buying bonds to control the yield curve. If the bond buying stopped, it would cause even more volatility in both bonds and equities. The definition of "Taper Tantrum". High Yields Corporate Bonds (HYG) and Investment Grade (LQD) corporate bond prices both declined for the week. The spread between corporate bonds and short term treasury bonds remain about the same. The US Dollar (DXY) advanced +0.25% for the week and seems to be basing around the current support area. Silver (SILVER) and Gold (GOLD) both advanced for a second week. Crude Oil Futures (CRUDEOIL1!) declined sharply on fears of less demand. Timber (WOOD) declined, but still trading near all-time highs. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced, but both still showing upward trends. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps All four of the largest mega-caps declined for the week. On the weekly chart, I track against the 10 week and 40 week moving averages. Only Alphabet (GOOGL) is trading above both lines. Amazon (AMZN) is below both lines and the 10 week line is about to pass under the 40 week line. Microsoft (MSFT) moved below the 10 week line, but still trades above the 40 week line. Apple (AAPL) has been trading below the 10 week line, but above the 40 week line for the past several weeks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. This week, Exxon Mobil (XOM) pulled back almost 9% along with other energy stocks. Delta Airlines (DAL) also had losses for the week on fears that transportation may not rebound as quickly as previously thought. Carnival Cruise Lines (CCL) and Marriott (MAR) had gains but did not end the week with a bullish follow through. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.696. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment which typically proceeds a pullback in the market. The CNN Fear & Greed index is near to the neutral territory. The NAAIM exposure index moved up to 78.55. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Existing Home Sales data will be released on Monday right after market open. On Tuesday, New Home Sales data will be released. Also, API Weekly Crude Oil stock will be revealed. Several economic news will be released on Wednesday. Durable Goods Orders for February will give a heads-up on manufacturing activity. That will be measured against Manufacturing and Services purchasing data for March which can indicate some direction on increasing or decreasing activity in these sectors. Crude Oil Inventory data will also be released. Fed Chairman Jerome Powell is scheduled to testify before congress on Wednesday. His statements are always watched closely for possible sentiment changes. Given the situation expect him to make very measured statements on economic outlook and reaffirm that monetary policy will not change. Thursday will bring an update on 2020 Q4 GDP numbers. Initial Jobless Claims will also be watch closely for trends in the labor market. On Friday, the most watched data will likely be the producer price index data that will show how much cost is going into produced goods. It's typically a good early indicator on inflation, but there is enough pressure on consumer prices right now that increased costs by producers doesn't necessarily translate to consumer price increases. Tencent Music Entertainment (TME) will release earnings on Monday. Adobe (ADBE) will release earnings on Tuesday. Let's not fool ourselves that it actually matters, but it's still interesting that GameStop (GME) will also announce earnings on Tuesday. Tencent (TCEHY), General Mills (GIS), RH (RH), KB Home (KBH), GrowGeneration (GRWG), and Guess (GES) are all reporting earnings on Wednesday. For the daily/weekly update, there are no interesting earnings releases on Thursday. On Friday, Up Fintech (TIGER) will release their earnings update. Be sure to check your portfolio for upcoming earnings reports. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Don't fight the fed! Jerome Powell could not have been clearer that interest rates will remain low and that bond buying programs will continue, even as the FOMC increased their outlook for the economy in 2021. Ultimately that will be good news for American individuals and companies that want to borrow money. There is rotation from high growth stocks that were performing well in 2020 to cyclical and recovery stocks that are expected to do well in 2021. But overall money continues to pour into US equity markets from both domestic and foreign investors. In order to buy US equities, foreign investors must first by the US Dollar which is now starting to strengthen compared to other currencies. That will attract investors back to US Dollar based instruments, including bonds as a safe haven, stabilizing yields. US consumers will soon have stimulus checks and will start to spend no only the checks, but a record amount of savings build up during the pandemic. That will be a boon for everything from retail to leisure and travel. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The economic recovery is looking great, but it may be better than what Jerome Powell and the FOMC is predicting. As consumers start to spend and the demand for goods and services gets ahead of the capacity and materials, that will drive up prices. That would accelerate inflation to a level that requires a response from the Fed. Any change in monetary policy will certainly be met with a reaction by the market. That may be months away, but the market is always ahead of the reality. Treasury bond yield volatility is scaring investors. As long as yields can spike at any moment, investors will be fickle and rotations will continue to wreak havoc on equities. The volatility in both bonds and equities will have global investors looking elsewhere to find more stable and predictable returns. Growth stocks outpaced value stocks at a historical rate in 2020. Value stocks have been catching up this year, but there is still some catch up and maybe correction before this rotation is done. b -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq is at a decision point right now with two key levels to watch for on the bullish and bearish side. On the positive side, the level we want to reach is 13,620.71, but there's a few levels to pass before that happens: The 21d EMA is at 13,309.62. We need to get above that line and stay above it. The 50d MA is at 13,422.90. That's the next line to get above, stay above and eventually get the 21d EMA back above the 50d MA to signal the positive trend. After the 50d MA, the next line is 13,620.71 which is this past week's high. But it is also past the area of resistance that the index was rejected on 1/26, 3/2, and 3/16. 14,000 will be the next area of resistance. The all-time high is at 14,175.12. That might be a stretch to get there this week, but keep it in our sites. On the downside, the index must stay above 12,985.05 which was a previous neck line on a head and shoulders: 13,000 has been an area of support on 1/29, 2/23, 3/3. 12,985.05 is just below that support area and a key level that would mark bearishness. The next support area is 12,500-12,550. 12,397.05 is the current bottom of the recent correction on the Nasdaq. Let's not make a new bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's tough to tell at times whether the market is correcting or rotating. Certainly, it has been a difficult several weeks for the Nasdaq as big tech and growth stocks that heavily trade on the index have not done well. But there are many reasons to believe in underlying support in US equities, but the focus is shifting among sectors and growth vs value. The best thing to do at these times is study the stocks in your portfolio and watchlist. Because of the choppiness the last few weeks, you can learn a lot about what other investors, especially institutional investors, believe about your picks. Look for strength against the indexes and against their sector. Pay close attention to volume on up days and down days. Is there more volume during selling or buying? How are they performing on the weekly chart vs the daily chart? Are they holding above key moving average lines (21d EMA, 50d MA, 200d MA, etc)? Not only will that help you discover where your own investment focus should be, but it will help you identify whether the broader market is bearish or bullish, instead of worrying too much about the swings in the major indexes. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
4
Daily Market Update for 3/19Trend lines drawn from the 3/5 low (11d), 3/15 (5d) and today 3/19 (1d). Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, March 19, 2021 Facts: +0.76%, Volume higher, Closing range: 83%, Body: 45% Good: Support at 13,000 to start morning rally Bad: Rally lost steam in afternoon, lower high, lower low Highs/Lows: Lower high, lower low Candle: Thin green body with lower wick slightly longer than upper wick Advance/Decline: One advancing stock for every declining stock Indexes: SPX (-0.06%), DJI (-0.71%), RUT (+0.88%), VIX (-2.92%) Sectors: Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The markets ended another choppy week with one more rotation as investors continue to adjust against what's happening in the bond market. Yesterday's sale of bonds settled down and investors moved back into some growth stocks. But it was not a broad rally, with the Dow Jones Industrial and S&P 500 ending the day with losses. The Nasdaq gained +0.76% on higher volume, but made a new low compared to the previous day and didn’t manage a new high. The closing range of 83% with a 45% green body is from a bullish intraday that testing the 13,000 area and then rallied into the afternoon. The upper wick formed from a tapering in prices after the morning rally stalled. There were more advancing stocks than declining stocks. The Russell 2000 (RUT) was the best performing index of the day with a +0.88% gain. That was not nearly enough to recover from yesterday's selling. The S&P 500 (SPX) declined -0.06% while the Dow Jones Industrial average (DJI) lost -0.71%. The VIX volatility index declined -2.92%. Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Technology (XLK) lost -0.30% which is a surprise considering the tech heavy Nasdaq had gains. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.06%. The US 30y treasury bond yield declined while the 10y and 2y treasury bond yields remained about even. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both advanced for the day. Silver (SILVER) and Gold (GOLD) both gained for the day. Crude Oil (CRUDEOIL1!) was about even. Timber (WOOD) declined. Copper (COPPER1!) was about even while Aluminum (ALI1!) advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.696. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back to neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Keeping this update brief during vacation. The majority of mega-caps did well for the day and growth stocks had a much better day than yesterday. I'll return to more specific updates on market leaders next week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Existing Homes Sales data will be released on Monday just after market open. Tencent Music Entertainment (TME) will release earnings on Monday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index remains below the 21d EMA and 50d MA, but tested and found support at the 13,000 area. The trend line from the 3/5 bottom points to a +2.55% gain for tomorrow. The one-day trend line points to a -0.47%. The five-day trend line points to a +2.20% gain. The trend line from the 2/16 all-time high was removed last week, but the index has returned to the midpoint of that channel. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a nice upside reversal from yesterday's selling, but there still seems to be some weakness behind the move. The S&P 500 and Dow Jones Industrial both had declines. The Technology sector also declined, despite the Nasdaq having a gain. Homework for the weekend should be to look at the stocks in your portfolio and watchlist. Because of the choppiness the last few weeks, you can learn a lot about what other investors, especially institutional investors, believe about your picks. Look for strength against the indexes and against their sector. Pay close attention to volume on up days and down days. Is there more volume during selling or buying? How are they performing on the weekly chart vs the daily chart? Are they holding above key moving average lines (21d EMA, 50d MA, 200d MA, etc)? Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 3/18Trend lines drawn from the 3/5 low (10d), 3/12 (5d) and today 3/18 (1d). Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, March 18, 2021 Facts: -3.02%, Volume higher, Closing range: 5%, Body: 82% Good: Nothing Bad: Broke below 50d MA and 21d EMA, selling most of the day Highs/Lows: Lower high, lower low Candle: Mostly red body, with no visible lower wick Advance/Decline: Four declining stocks for every advancing stock Indexes: SPX (-1.48%), DJI (-0.46%), RUT (-2.94%), VIX (+12.22%) Sectors: Financials (XLY +0.52%) was the only sector with gains. Technology (XLK -2.77%) and Energy (XLE -4.49%) were the worst performing. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Did the market wake up with a hangover? After the positive news from the Fed caused a rally late yesterday, the market took a turn downward today. It started again with a surge in bond yields that impact the valuation of big tech and growth stocks. The Nasdaq closed down -3.02% in a painfully red session with only a 5% closing range. The 82% red body with no visible lower wick shows the selling throughout the day. A pause at the 21d EMA could not hold and the selling regained steam into close. There were 4 declining stocks for every advancing stock. The Dow Jones Industrial average (DJI) was holding onto positive gains, even setting a new all-time high before selling off in the late afternoon. The Dow Jones Industrial closed down -0.46%. The S&P 500 (SPX) declined -1.48%. The Russell 2000 (RUT) Declined -2.94%. The VIX volatility index gained +12.22%. Only Financials (XLF +0.52%) closed the day with gains. Consumer Discretionary (XLY -2.45%) and Technology (XLK - 2.77%) were hard hit among the sectors. The worst performing sector was Energy (XLE -4.49%). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained -0.42%. The US 30y, 10y and 2y treasury bond yields all gained for the day with the spread between long term and short term widening again. The US 30y yield is at its highest point since June 2019 while the 10y is at its highest point since January 2020. The yield curve is at its steepest since 2015. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both declined for the day. The spread between corporate bonds and treasury bonds widened a bit. Silver (SILVER) and Gold (GOLD) both declined. Crude Oil (CRUDEOIL1!) declined for another day. Timber (WOOD) declined. Copper (COPPER1!) and Aluminum (ALI1!) both declined as well. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.627. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back to neutral. The NAAIM exposure index is at 78.55 as of the close on Wednesday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Keeping this update brief during vacation. All four of the largest mega-caps closed below their 21d EMA. Only Alphabet (GOOGL) remains above its 50d MA. A handful of mega-caps had gains for the day, including large financials Bank of America (BAC) and JP Morgan (JPM). However most mega-caps lost for the day. Only one of the growth stocks tracked by the daily update had a gain for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There are no notable economic news scheduled for tomorrow, however it is a triple witching day. A triple witching day happens once a quarter when stock options, stock index futures, and stock index option contracts all expire on the same day. It can cause extra trading volume and volatility in the last hour of trading as investors close or roll-out expiring contracts. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index dropped below both the 50d MA and 21d EMA today and closed above the 13,000 support area. The trend line from the 3/5 bottom points to a +3.74% gain for tomorrow. The five-day trend line points to a +2.20% gain. The one-day trend line points to a -0.92%. The trend line from the 2/16 all-time high was removed last week, but the index has returned to the midpoint of that channel. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was not the day we expected, but the bond sellers had their way. There will be more volatility in bonds throughout this year as the economic recovery of many countries, not just the US, begins to impact their currency and treasury performance. The volatility to treasury bonds will likewise be felt with growth and big tech companies that benefit from cheap financing to fund growth. It will be a wild ride this year. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
6
7 MOST IMPORTANT CHARTS TO WATCH RIGHT NOW1. VIX is filling the gap from when the Feb-Mar crash begun. Volatility is getting supressed when things actually look very fragile with Central Banks having nothing under control. A VIX spike (big move down for stocks) wouldn't be a surprise here for reasons I'll explain soon. 2. DXY looking strong here. The 50 DMA has turned up and dollar strength could be a problem here. Watching other charts tells me things are OK, so the weakness comes from specific currencies. Some currencies are doing very well while others very poorly and there is no concrete way to go about it. 3. CNH/CNY however are very clear as to what is going on. They seem to be in agreement with the DXY. The relentless USD downtrend has been broken and the USD is showing signs of life. Despite the QE, despite the massive stimulus... the USD hasn't gone down. That's not a great sign. Sure most currencies are getting devalued, but if the USD is so strong and could begin an uptrend we have a problem... 4. Essentially most of that is attributed to US long term rates going up faster than anywhere else. This could be happening for many reasons, right or wrong. Inflation might be here, inflation might be coming... but it depends on which country you are looking at and in what form you are seeing it. Is it because of supply shocks (i.e low Oil and Copper production), currency debasement, loss of faith in the currency or trade wars etc? It could be many combined, but when we see bonds go down it could the fact that we have a lot of supply coming in and not enough demand. Maybe we had such a big bull market that people are taking profit. However the impact this has on the market is on many different levels and it comes down to how the market is structured, stock valuation models, different investment strategies and so on. So the more yields go up (bonds down), the bigger the problem becomes if it is relentless. 5. Gold has been going down because real yields have been going up and people have been taking more risk. Why hold gold and not other more useful commodities or riskier assets in general? Gold going up isn't a good thing. It means something is not going well. Over the last few days Gold didn't go down along with bonds, which is worrying. It is stuck between and uptrend and a downtrend, however it is clear it is currently in a downtrend as it is below all key MAs (50-200-300 DMAs). 6. Oil has had a massive rally and I can't tell whether it is over for now but it could be. Very high oil prices in the current environment wouldn't be ideal, but hopefully because more oil is being produced, not because demand is down. Low oil demand means low growth and bad things in general going on. High oil demand means growth and go things going on. Oil got above the 2019 highs, swept them, retested them and went down quite a bit. It also crossed above the big diagonal downtrend from the 2008 high all the way down here and then came back down. If it closes like this and goes lower, I can't rule out 52$ or even 42$, but if it starts going above 68 it could quickly accelerate higher. 7. RUA is the index that has the top 3000 US stocks, spot. It is just an index and doesn't track futures but spot, so it isn't open 24/5. Stocks are still in an uptrend, which Japanese and European stocks showing quite a bit of strength. We've seen quite a few US stocks do well, but if the top US stocks struggle because of higher rates... there could be a big problem. If bonds start selling off hard, the borrowing costs for many companies will skyrocket. That is clearly a massive issue right now. So is a 20% like the one we had in 2018 possible? Yes it is. Do I think stocks could still go parabolic? Of course, but it might take some extra time to get there. We need bigger actions from central banks and eventually bonds slowing down and go up slowly. For now we could get another 5-10% correction, test the trendline and go higher. Until I see the market close below I think up is more likely, although I am more cautious.
by BitcoinMacro
Daily Market Update for 3/17Trend lines drawn from the 3/5 low (9d), 3/11 (5d) and today 3/17 (1d). Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, March 17, 2021 Facts: +0.40%, Volume higher, Closing range: 78%, Body: 58% Good: High closing range on slightly higher volume, support at 21d EMA Bad: Lower high, lower low, dipped below 50d MA Highs/Lows: Lower high, lower low Candle: Green body covers most of candle, similar upper and lower wicks Advance/Decline: About even advancing and declining stocks Indexes: SPX (+0.29%), DJI (+0.58%), RUT (+0.73%), VIX (-2.83%) Sectors: Consumer Discretionary (XLY +1.40%) and Industrials (XLI +1.15%) were top. Health (XLV -0.36%) and Utilities (XLU -1.63%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Happy St. Patrick's Day! Investors got what they needed to hear from the fed's Jerome Powell. Interest rates will remain untouched and there will be no tapering of bond buying despite a big upgrade in the fed's outlook on the economy. The change in investor sentiment mid-day was clear as the indexes made a rally. The Nasdaq closed with a +0.4% gain after dipping below the 50d MA and 21d EMA in the morning. The dip came as yields soared and investors worried about what was to come from the Fed meeting. After rallying in the afternoon, the index closed on slightly higher volume with a 78% closing range. The short upper wick above a 58% green body was formed from a small pullback just before close. There were about equal number of advancing and declining stocks. All indexes ended the day positive with the S&P 500 (SPX) gaining +0.29% and the Dow Jones Industrial (DJI) gaining +0.58%. The Russell 2000 was the top performing index for the day with a +0.73% gain. The VIX volatility index declined another -2.83% and is at its lowest point since February 2020. It is still above levels before the market crash of 2020. The improved outlook from the Fed had an impact across several sectors. Consumer Discretionary (XLY +1.40%) and Industrials (XLI +1.15%) were top. The cyclical sectors recovered from losses earlier in the week. Health (XLV -0.36%) and Utilities (XLU -1.63%) were bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained -0.46%. The Fed expects inflation to reach around 2.2% which will weaken the dollar in the short term. The US 30y and 10y treasury bond yields rose for the day, but pulled back from the big increases in the morning. The US 2y treasury bond yield dropped for the day. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both rose today. Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) advanced. Most commodities are bullish on the improved economic outlook from the fed. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.605. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back toward neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Keeping this update brief during vacation. Mega-caps overall were mixed while the majority of growth stocks benefited from the day's news. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead The weekly initial jobless claims data will be released on Thursday. Better than expected numbers could be a boost to today's optimistic outlook. Manufacturing data will also be released that will provide insight into how manufacturing is recovering to meet demand. Nike (NIKE), Accenture (ACN), FedEx (FDX), Dollar General (DG), Weibo Corp (WB), Utz Brands (UTZ) will report earnings. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index was able to close above the 50d MA showing some support at that level. The one-day trend line points to a +1.57% gain tomorrow. The trend line from the 3/5 bottom points to a +1.13% gain. The five-day trends line points to a -0.26% loss. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The market and the fed have been a bit at odds for the past month. Today the fed won. They gave us a firm stance on interest rates and bond buying while acknowledging the improved outlook for growth in the economy this year. That didn't provide any room for the market to argue. Don't fight the fed. That can put some more steam into the market rally. Still, many sectors have taken quite a beating in the charts this past few weeks and there is still a ways to go to recover prices. Until then, expect those sectors, stocks and indexes to meet with resistance as overhead supply needs to be shaken out before new highs can be made. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
1
Daily Market Update for 3/16Trend lines drawn from the 3/5 low (8d), 3/10 (5d) and today 3/16 (1d). Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, March 16, 2021 Facts: +0.09%, Volume lower, Closing range: 33%, Body: 23% Good: Higher high, higher low, successful test of 50d MA Bad: Low closing range, longer upper wick, could not hold morning rally Highs/Lows: Higher high, higher low Candle: Thin red body underneath a long upper wick Advance/Decline: Over three declining stocks for every advancing stocks Indexes: SPX (-0.16%), DJI (-0.39%), RUT (-1.72%), VIX (-1.20%) Sectors: Communications (XLC +1.05%) and Technology (XLK +0.75%) were top. Industrials (XLI -1.42%) and Energy (XLE -2.85%) were bottom. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview An attempted rally in the morning sold off as investors reacted to disappointing economic data, both for February retails sales and industrial and manufacturing production. Gains were limited to fewer stocks and dominated by mega-caps. The Nasdaq closed with a +0.09% gain, but that was down from a 1.19% gain earlier in the day. After testing the 50d MA, the index bounced back up to close a bit below where it opened and leaving behind a 23% red body. The 33% closing range is not great, but the volume was lower than the previous day and lower than average. There were over three declining stocks for every advancing stock. The other major indexes all lost. The S&P 500 (SPX) lost -0.16%. The Dow Jones Industrial Average (DJI) lost -0.39%. The Russell 2000 (RUT) was the worst performer with a -1.72% decline. The VIX volatility index declined -1.20%. Communications (XLC +1.05%) and Technology (XLK +0.75%) were top. Industrials (XLI -1.42%) and Energy (XLE -2.85%) were bottom. All of the cyclicals (Energy, Financials, Industrials and Materials) lost as well as Consumer Discretionary. These sectors were impacted by the disappointing economic data in the morning. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.09%. The US 30y and 10y treasury bond yields rose slightly, but seem to be leveling off. US 2y bond yields remained flat. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both declined today. The spread between corporate and treasury bonds remain about the same. Silver (SILVER) declined while Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.644. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back toward neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Keeping this update brief during vacation, but keep an eye on the mega-caps as they influence the indexes. The mega-caps overall did well today with the majority ending the day with gains. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead On Wednesday, we'll get news on Building Permits and Housing Starts before the market opens. After the opening bell, Crude Oil Inventories will be released. The FOMC will meeting tomorrow. In the afternoon, their economic projections and interest rate projections will be released. This will be the biggest economic news of the day and set the stage for the next moves in both bonds and equity markets. Will the Fed make investors more or less confident in the stability of yields and the US dollar. Wednesday's earnings reports will include Pinduoduo (PDD), BMW ADR (BMWYY), Cintas (CTAS), Five Below (FIVE). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index was able to stay above the 50d MA showing some support at that level. The support only really matters, if news from the FOMC meeting remains positive and confident. The trend line from the 3/5 bottom points to a +1.51% gain while the five-day points to a +0.93% advance. The trend from today is downward and if it continues, the one-day trends line points to a -1.23% loss. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up This morning's economic news was a bit of a shock for investors who were expecting better numbers pointing to the economic recovery. Instead it showed the recovery slowing in speed and raising some alarms. The reaction was negative but also showed some caution from overreacting as there is more to come this week with the FOMC meeting. Despite the economic data, yields did not move much. One might have expected them to come down a bit more given the perception the economic recovery is not overheating and inflation may not accelerate. But all eyes really are going to be on the Fed. What adjustments will they make to the outlook for economic growth this year? Will they even hint at changes in monetary policy? Will this be the start of the next "Taper Tantrum"? Tomorrow we will have a lot to digest. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
8
Daily Market Update for 3/15Trend lines drawn from the 3/5 low (7d), 3/9 (5d) and today 3/15 (1d). Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, March 15, 2021 Facts: +1.05%, Volume higher, Closing range: 100%, Body: 73% Good: Close above last week's high and back above 50d MA Bad: Nothing Highs/Lows: Higher high, higher low Candle: No upper wick, most green body over lower wick Advance/Decline: About even advancing and declining stocks Indexes: SPX (+0.65%), DJI (+0.53%), RUT (+0.31%), VIX (-3.19%) Sectors: Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were top. Financials (XLF -0.58%) and Energy (XLE -1.14%) Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview It was a relatively smooth start to the week as bond yields stayed fairly tame compared to previous weeks. That allowed the tech heavy Nasdaq to continue a rally to catch up with the other indexes. There is still more catchup to do as the S&P 500, Dow Jones Industrial average and Russell 2000 set new all-time highs. After a brief test of the 21d EMA line, the Nasdaq rallied into close for a +1.05% gain on higher volume. The volume increased as the index moved up in the last 30 minutes of trading to end the day with a 100% closing range. The 73% green body is above a lower wick formed from some selling before noon. There were about the same number of advancing stocks as declining stocks. The S&P 500 (SPX) gained +0.65%. The Dow Jones Industrial (DJI) had an early morning rally that sold off, but then was able to recover and close the day with +0.53% gains. The Russell 2000 (RUT) closed the day with a +0.31% advance, but only after visiting intraday lows twice in a choppy session The VIX volatility index declined -3.19%. Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were the top sectors. Utilities (XLU) was near the top of the sector list last week during the back and forth rotation. Financials (XLF -0.58%) and Energy (XLE -1.14%) were at the bottom of the list for today. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.16%. We will continue to watch treasury bond yields today. The US 30y and 10y treasury bond yields declined slightly while the 2y yield increased, helping to flatten the curve a bit. However the yield curve remains steep. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both increased for another day. Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) pulled back from highs. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio is at 0.523. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back toward the greed level. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Keeping this update brief during vacation, but keep an eye on the mega-caps as they influence the indexes. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Retail Sales data will be released Tuesday before market open. Industrial Production data will also be released, both indicating the pace at which economic activity is recovering. Volkswagen (VWAGY) will report earnings on Tuesday. In addition, FUTU Holdings (FUTU), Coupa Software (COUP), Jabil Circuit (JBL), Eastman Kodak (KODK) will report. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index moved back above the 50d MA which should provide some support. The trend line from the 3/5 bottom points to a +0.97% gain while the five-day and one-day trends lines point to a +0.26% gain. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Bond investors have calmed a bit, allowing the longer term bond yields to settle a big. I'll be keeping a close eye on the yields for the coming week at they are having a big influence on tech and growth stocks, which impacts the Nasdaq. The expectation for tomorrow is for sideways or higher. If the index can follow-through with the expectation, it can start to work toward the all-time high. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Market Week In Review - 3/8/2021 - 3/12/2021The Market 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. I do occasionally have some errors or typos and will correct them in my blog or in the comments on TradingView. I do not have an editor and do this in my free time. 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 view on the past week What's coming in the next week The Bullish View, The Bearish View Key index levels to watch out for Wrap-up If you have been following my daily updates, you can skip down to the “The Meaning of Life”. If not, then this first part is a great play-by-play recap for the week. Click the original charts for more detail each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, March 8, 2021 Facts: -2.41%, Volume lower, Closing range: 2%, Body: 73% Good: Held above 12,600 as market closed Bad: Could not hold short rally in morning, selling the rest of afternoon Highs/Lows: Higher high, higher low Candle: Short upper wick over a thick red body, no lower wick Advance/Decline: More than one declining stock for every advancing stock Indexes: SPX (-0.54%), DJI (+0.97%), RUT (+0.49%), VIX (+3.28%) Sectors: Utilities (XLU +1.41%) and Materials (XLB +1.34%) were the top sectors. Communications (XLC -1.34%) and Technology (XLK -2.42%) were bottom. Expectation: Lower The rotation continues. It's not often that a rotation is so clearly seen, with the Dow Jones ending the day up nearly 1% and the Nasdaq ending the day down 2.41%. Nine sectors outperformed the broader S&P 500 index, while the other two sectors lost enough to bring down the index for a loss by the end of the day. The Nasdaq closed the day with a -2.41% loss on lower volume. The closing range of 2% followed an afternoon of selling that formed the 73% red body underneath a small upper wick from the short morning rally. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, March 9, 2021 Facts: +3.69%, Volume higher, Closing range: 71%, Body: 56% Good: Good gain on higher volume, higher high, higher low, above 13k Bad: Selling in last hour of day Highs/Lows: Higher high, higher low Candle: Slightly longer upper wick with a thick green body Advance/Decline: Two advancing stocks for every declining stock Indexes: SPX (+1.42%), DJI (+0.10%), RUT (+1.91%), VIX (-5.65%) Sectors: Consumer Discretionary (XLY +3.78%) and Technology (XLK +3.40%) were the top sectors. Financials (XLF -0.91%) and Energy (XLE -1.75%) were bottom. Expectation: Sideways or Higher The rotation reverses. Today saw a reversal of the past several days rotation as money flooded back into big tech, consumer discretionary, and growth stocks. Treasury bond yields seemed to stabilize a bit allowing investors to turn their eyes on the stimulus and the impact it will have on performance in the near term. The Nasdaq closed with +3.69% gain on higher volume. The closing range of 72% came after some selling in the final hour of trading, forming the upper wick. The green body covers 56% of the candle and represents a day that was dominated by the bulls. There were two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, March 10, 2021 Facts: -0.04%, Volume lower, Closing range: 14%, Body: 69% Good: Higher high, higher low, support above 13,000 Bad: Rejection off 21d EMA in morning led to selling and close near low Highs/Lows: Higher high, higher low Candle: Thick red body with small upper and lower wicks, low closing range Advance/Decline: More advancing stocks than declining stocks Indexes: SPX (+0.60%), DJI (+1.46%), RUT (+1.81%), VIX (-6.12%) Sectors: Energy (XLE +2.53%) and Financials (XLF +2.04%) were back on top. Technology (XLK -0.40%) was bottom. Expectation: Sideways or Lower The rotation settles. There was still signs of rotation in the market today, with the sector list flipping once again. But the effect is much more subdued than the past week. The passing of the stimulus has investors eyes wide open while they sent the Dow Jones Industrial to all-time highs. The Nasdaq was not able to benefit from the enthusiasm as it declined -0.04%. A sideways move, but still a day marked by selling after a morning gap-up. The closing range of 14% is underneath a thick red body of 69% and slightly longer upper wick formed just after the market opened. There were more advancing stocks than declining stocks, however volume on declining stocks was higher. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, March 11, 2021 Facts: +2.52%, Volume lower, Closing range: 81%, Body: 67% Good: Another higher high and higher low, back above 21d EMA and 50d MA Bad: Not much, resistance at 13,400 Highs/Lows: Higher high, higher low Candle: Thick red body with small upper and lower wicks, low closing range Advance/Decline: Almost three advancing stocks for every declining stock Indexes: SPX (+1.04%), DJI (+0.58%), RUT (+2.31%), VIX (-2.88%) Sectors: Technology (XLK +2.14%) and Communications (XLC +1.89%) were top. Utilities (XLU -0.26%) and Financials (XLF -0.29%) were bottom. Expectation: Sideways or Higher The back and forth continues as the Nasdaq and technology stocks rise again. The sector list has flipped back and forth the last several days as investors rotate in and out of big tech and growth stocks. Today, the market rallied as jobs reports showed positive gains in the labor market and the stimulus is proceeding to Biden's signature. Technology was back on top while Financials moved to the bottom. The Nasdaq closed with a +2.52% gain on lower volume. The 67% green body was formed in the morning as the index quickly rose to intraday highs around 13,400 and stayed there the rest of the day. The short upper wick is above an 81% closing range. There were almost three advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, March 12, 2021 Facts: -0.59%, Volume lower, Closing range: 97%, Body: 58% Good: Bulls bought back the morning lows to bring index back above 21d EMA Bad: Lower high and lower low Highs/Lows: Lower high, lower low Candle: Green body above a lower wick with very small upper wick Advance/Decline: About even advancing and declining stocks Indexes: SPX (+0.10%), DJI (+0.90%), RUT (+0.61%), VIX (-5.57%) Sectors: Real Estate (XLRE +1.72%) and Utilities (XLU +1.35%) were top. Communications (XLC -0.28%) and Technology (XLK -0.72%) were bottom. Expectation: Sideways or Higher Are you dizzy yet? This rotation just won't end. Every day this week the Technology sector flipped from the bottom of the sector list to the top and then the next day to the bottom. Yesterday it was at the top. Today it's back at the bottom. As long term bond yields are reaching for pre-pandemic highs, investors are still trying to determine the impact on valuations of big tech and growth stocks. The Nasdaq closed the week with a green candle, but ended the day with a -0.59% decline. Volume was lower but the bulls bought up a morning dip to bring the index back above the 21d EMA in the afternoon. A closing range of 97% means a very small upper wick. The longer lower wick rests underneath a 58% green body. There were about the same number of advancing and declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) It was a wild week of rotation instigated by volatility in the treasury bond markets. Economists and investors weighed the impact of stimulus on inflation, currencies, bonds and equities. The outcomes could have opposite effects on different sectors. Technology and Communications, that have growth mega-caps, could be negatively impacted by higher yields, raising the costs of borrowing money to drive growth. Financials could benefit from the higher yields driving interest rates and additional revenue on both mortgages and commercial borrowing. The winners from the stimulus bill will be industrials and materials as the economy returns to pre-pandemic levels and these sectors benefit. The market made that clear as the Dow Jones Industrial gained 1% on Monday while the Nasdaq declined -2.41%. Utilities, Industrials and Materials were top sectors along with Financials. All cyclicals, but as the first three would remain steady throughout the week, Financials was up and down depending on bond performance. But it also seemed no one was quite ready to give up on big tech and growth stocks. Tuesday was "buy the dip" day, sending the Technology sector back to the top of the list. Growth companies like Tesla (TSLA) gained 20%, rebounding off recent lows. The four big mega-caps all closed the day with gains. Financials and Energy moved to the bottom of the sector list. The 3y note auction brought some optimism back to the bond market, bringing yields back down from recent gains. The 10y auction on Wednesday also brought some confidence back to the bonds market. Yields on treasury bonds pulled back a little. But even as yields came down, the yield curve steepened. A steep yield curve forecasts higher interest rates and could mean other monetary policy changes from the Fed. That's where the fear is focused. Technology moved back to the bottom of the sector list on Wednesday. A quick refresh on the yield curve. The yield of a treasury bond can be viewed as the level of risk investors see in the bond. Shorter term bonds are paid back quickly and therefore investors usually assign lower risk and therefore require lower yields. Longer term bonds are viewed with higher risk, there's more time between now and the maturity date of the bond for something happening that will impact the value, so yields are higher. Risk/reward. The yield curve is a plotting of the interest rates from short term to long term. When the yield curve is normal, there should be an upward sloping curve. From the shortest term bonds to the middle term, yields will accelerate. As you move past the middle, the longer the maturity date moves out the difference in yields level off. An inverted yield curve shows the opposite and means that there is much more risk in the short term than the long term, so yields are higher on short term bonds. What we are seeing this week is normal in that short term yields are lower than long term, but the curve is unusually steep. It's at its steepest slope since 2015/16. Investors see short term bonds as much safer than long term bonds, likely on the optimism of the short term economic recovery this year. Longer term, investors are more uncertain. What will happen to the dollar? When will the fed stop its easy money policy? So there is less demand for long term bonds, investors selling, bond prices drop, and yields go up. If the fed wants to get revenues from selling 10y, 20y, 30y bonds, what do they need to do? They need to entice bond investors by covering the risk with greater reward. They need to either stop injecting money into the economy which is devaluing the dollar (and making long term bonds risky), increase purchases of longer term bonds to control the yield curve, or they need to raise interest rates. Regardless of comments from the fed that they are not concerned with the increasing yields, it has investors spooked, sending them back and forth between fear and greed. Technology was back on top on Thursday. Long term yields were higher, but seemed under control. Friday Technology was back to the bottom, but after a morning dip, buyers brought the Nasdaq back up to close near an intraday high. Despite the yield curve steepening again with the 30y and 10y yields hitting their highest since early 2020, inflation numbers and consumer sentiment were better than expected. That was enough to give bullish investors optimism and end the week with the DJI and RUT at all time-highs and the SPX knocking on the door. Despite all the turmoil, the Nasdaq closed the week with a +3.09% gain on slightly lower volume. The closing range of 86% is far better than the previous weeks. The index had a higher low but a lower high, making this an inside week. I've redrawn the channel from the March bottom. If the index can stay in this channel, then it would seem the economic outlook has been priced into big tech and growth stocks, and the index can start to follow along with the gains we've seen in the Dow Jones Industrial and Russell 2000. The S&P 500 (SPX) advanced +2.64%. The Dow Jones Industrial average (DJI) gained 4.07%. The Russell 2000 (RUT) gained 7.32% for the week. The VIX volatility index closed the week with a -16.10% decline. It was a wild week for the sectors as investors rotated in and out of Technology and Communications stocks. All sectors ended the week with gains. Consumer Discretionary ( XLY ) was the big winner. Large stimulus checks will be delivered soon that are expected to be poured into the economy via consumer spending on both needs and wants. Technology ( XLK ) and Communications ( XLC ) spent Monday at the bottom of the sector list, Tuesday at the top, Wednesday at the bottom, Thursday at the top, and Friday at the bottom. In the end, the two sectors landed just behind the SPX in performance, but did have gains for the day. Financials ( XLF ) was also one to watch. It flipped back and forth as investors followed closely what was happening in the bond markets. The increase in yields could be a boon for Financials. The increased yields would have the opposite impact on big technology and communications companies and smaller growth companies. As yields went back and forth, so did the performance of these sectors. Energy ( XLE ) ended the week as the worst sector. Although it had a big gain on Wednesday, it wasn't enough to cover the losses on Monday and Tuesday. Utilities ( XLU ) and Real Estate ( XLRE ) did not have any big days, but were on a steady rise throughout the week. They ended the week in 2nd and 3rd place on the list. The two sectors are often used as defensive plays. Steep yield curve. You can see the spread between the US 10y and 2y treasury bond yields in the top chart, also marked with a green horizontal line so you can see just how long since the spread has been that wide. Also note that US 30y and 10y yields are back to pre-pandemic levels. Inflation and the possibility of a weakening US dollar means long term bonds are out of vogue. High Yields Corporate Bonds (HYG) and Investment Grade (LQD) corporate bond prices both declined for the week. The spread between corporate bonds and short term treasury bonds remain about the same. The US Dollar (DXY) pulled back from the recent gains, declining -0.32% for the week. Silver (SILVER) and Gold (GOLD) both advanced for the week. Crude Oil Futures (CRUDEOIL1!) declined just slightly from its highest point since 2018. Timber (WOOD) advanced and is trading at all-time highs. Copper (COPPER1!) and Aluminum (ALI1!) both declined but are still in upward trending channels. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The four big mega-caps had mixed results for the week. Microsoft (MSFT) and Amazon (AMZN) closed the week with +1.79% and 2.97% gains. Amazon likely got a boost from the stimulus checks expected to increase consumer spending while people are still nervous to shop at brick-and-mortar stores. Apple (AAPL) lost -0.32% for the week. Alphabet (GOOGL) was down-2.24%. Microsoft and Alphabet are trading above 10w and 40w moving average lines. Apple is trading below the 10w MA line and Amazon is trading below both the 10w and 40w moving average liens. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this report. This week all four had gains. Carnival Cruise Lines (CCL) gained over 9% this week. Delta Airlines (DAL) advanced +7.83%. Marriott International (MAR) gained +2.23%. Exxon Mobil gained +1.71%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.606, showing investors getting a little more bullish. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment which typically proceeds a pullback in the market. The CNN Fear & Greed index moved toward the greed side. The surprise was seeing the NAAIM exposure index go down to 0.48. That's a fairly low level and indicates nervousness from institutional investors. If exposure to equities by money managers is below 50%, then what is driving prices higher? -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday's TIC Net Long-Term Transactions data will give an idea of how much investor money is flowing in and our of US markets. More inflows means foreign investors are buying US equities and as a proxy, buying the US dollar to buy those equities. On the other side, US investors may be buying more foreign equities, using those markets currencies. Retail Sales data will be released Tuesday before market open. Industrial Production data will also be released, both indicating the pace at which economic activity is recovering. On Wednesday, we'll get news on Building Permits and Housing Starts before the market opens. After the opening bell, Crude Oil Inventories will be released. In the afternoon, FOMC economic projections and interest rate projections will be released. The weekly initial jobless claims data will be released on Thursday. Manufacturing data will also be released that will provide insight into how manufacturing is recovering to meet demand. Monday's earning reports will include a couple interesting small-caps: Vuzix (VUZI) and Desktop Metal (DM). Volkswagen (VWAGY) will report on Tuesday. In addition, FUTU Holdings (FUTU), Coupa Software (COUP), Jabil Circuit (JBL), Eastman Kodak (KODK) will report. Wednesday will include Pinduoduo (PDD), BMW ADR (BMWYY), Cintas (CTAS), Five Below (FIVE). On Thursday, Nike (NIKE), Accenture (ACN), FedEx (FDX), Dollar General (DG), Weibo Corp (WB), Utz Brands (UTZ) will report. Be sure to check your portfolio for upcoming earnings reports. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Did you see the Dow Jones Industrial average index? Six consecutive days of gains to set a new all-time high to close the week! The stimulus, passed through congress and signed by President Biden, is a huge amount of support to the economic recovery. Industrial stocks and small-caps are going to lead the charge and eventually the economics will be priced into big tech and growth stocks and they will join the rally. Never fight the fed. The Fed is continuing easy monetary policy that is fueling massive liquidity in the market. Many weekly charts look good. It's always important to take a step back and look beyond the daily turmoil. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Treasury bonds continue to have unusual volatility. Bond investors don't like volatility. Note only does it make it harder to use in hedging strategies, but popular trading strategies using multiple maturities of bonds become more difficult. The steepening curve Is an indicator of future interest rate increases, that will continue to worry equity investors away from the tech mega-caps and growth stocks. That will have an overweight influence on indexes and impact investor sentiment. The NAAIM exposure index doesn't represent all institutional investors, but it is an indicator of professional portfolio managers sentiment toward the market. At less than 50% exposure, one must question what is driving prices higher. It could be retail traders and passive indexation that is driving the current rally. That may be a recipe for disaster. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch Although the broader market is clearly not in correction, the Nasdaq is still lagging behind the other indexes. To build confidence in big tech and growth stocks traded on the Nasdaq, some gains on higher volume is required. If key levels on the downside breakdown, we can expect the big players in the Nasdaq to also pull down the other indexes. On the positive side: The Nasdaq closed above the 21d EMA on Friday, but below the 50d MA. That's the first key level to pass for next week. That level is at 13,367.48. Last week's high is at 13,601.33. This week could not make a new high, so having the index make that milestone next week will be important. 14,000 will be the next area of resistance. The all-time high is at 14,175.12. That might be a stretch to get there this week, but keep it in our sites. On the downside, there are several key levels to raise caution flags: Stay above the 21d EMA which is a currently at 13,290.28. The 10d MA is at 13,105.93. Going below this line will be a red flag. If the index has a pull back, the 13,000 is a support area that must hold. 12,599.23 is the low from this week. Stay above that level to make a higher low. The next support area is 12,500-12,550. 12,397.05 is the current bottom of the correction on the Nasdaq. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up This was a week that reminded us to take a step back and look at the weekly charts. The Nasdaq chopped back and forth, that seems like losses. But on the weekly chart, the index had a good gain with a great closing range. At the same time, the choppiness may continue into the coming week and cause investors to get overly nervous. Although the other major indexes are performing well, eventually the big players in the Nasdaq could pull down those indexes as well. It's important to avoid predictions. Instead, set some expectations for what you might think will happen. Watch those key levels in the Nasdaq, and follow the price action of the index and your favorite stocks. Keep stop losses up to date to protect from a sudden turn to the downside. But lets hope for upside. The report is a bit brief this week since I'm heading out to vacation. I hope you have a great week ahead! I'll be trading from the beach. :) Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
12
Weekly Analysis for #RUT for 15-19 March 2021Trend: Daily/Weekly/Monthly: Up/Up/Up RUT is strongest of the 3 US indices. Expect rotation to continue and RUT to lead. I don’t and can’t call tops. But some signs point to pullbacks. 3 possible scenarios: 1) As long as 2363-77 resistance zone holds, look for shorts targeting 2259-91 support zone. This zone should hold for a next leg up, to 2435-51. 2) We have a fast rally from open to 2435-51 resistance zone, by Tuesday or Wednesday, where we see a sharp rejection for a strong move down to 2259-91. 3) We open in Globex and sell off start, targeting 2227 before a bounce to 2259-91 and further selling to 2147 IMO, scenario 1 is most likely.
OANDA:US2000USD
by FadeMeIfYouCan
Daily Market Update for 3/12Trend lines drawn from the 2/16 ATH (19d), 3/8 (5d) and today 3/12 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, March 12, 2021 Facts: -0.59%, Volume lower, Closing range: 97%, Body: 58% Good: Bulls bought back the morning lows to bring index back above 21d EMA Bad: Lower high and lower low Highs/Lows: Lower high, lower low Candle: Green body above a lower wick with very small upper wick Advance/Decline: About even advancing and declining stocks Indexes: SPX (+0.10%), DJI (+0.90%), RUT (+0.61%), VIX (-5.57%) Sectors: Real Estate (XLRE +1.72%) and Utilities (XLU +1.35%) were top. Communications (XLC -0.28%) and Technology (XLK -0.72%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Are you dizzy yet? This rotation just won't end. Every day this week the Technology sector flipped from the bottom of the sector list to the top and then the next day to the bottom. Yesterday it was at the top. Today it's back at the bottom. As long term bond yields are reaching for pre-pandemic highs, investors are still trying to determine the impact on valuations of big tech and growth stocks. The Nasdaq closed the week with a green candle, but ended the day with a -0.59% decline. Volume was lower but the bulls bought up a morning dip to bring the index back above the 21d EMA in the afternoon. A closing range of 97% means a very small upper wick. The longer lower wick rests underneath a 58% green body. There were about the same number of advancing and declining stocks. The Dow Jones Industrial average (DJI) and Russell 2000 (RUT) both made new all-time highs. The big industrial stocks of the DJI and small-caps of the RUT are likely to benefit the most from the new stimulus and recovering economy. The DJI closed with a 0.90% gain while the RUT advanced +0.61%. The S&P 500 (SPX) ended the day with a 0.10% gain. The VIX volatility index declined -5.57%. Real Estate (XLRE +1.72%) tops the sector list despite rising yields. With consumer sentiment on the rise, it could be a boon for real estate. Utilities (XLU +1.35%) and Industrials (XLI +1.34%) are also at the top. Communications (XLC -0.28%) and Technology (XLK -0.72%) moved back to the bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.27%. Yields on the 30y and 10y treasury bonds both rose to new recent highs. The 30y yield is at its highest point since January 2020, while the 10y is at its highest point since early February 2020. The 2y yield rose modestly for the day. The yield curve is at its steepest since 2016. A steep yield curve means rising interest rates in the future. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both declined for another day. Silver (SILVER) declined while and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) remained about even. Timber (WOOD) continues to advance. Copper (COPPER1!) and Aluminum (ALI1!) declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.606. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back toward the greed level. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders The four big mega-caps have been back and forth all week. Today they all declined. Microsoft (MSFT) and Alphabet (GOOGL) declined -0.58% and -2.41%, but remain above their key moving average lines. Apple (AAPL) and Amazon (AMZN) declined -0.76% and -0.77% and are below their 21d EMA and 50d MA lines. New Oriental Ed (EDU) was the top mega-cap stock of the day with a +4.55% gain. Bank of America (BAC), Home Depot (HD) and Walmart (WMT) round out the top four, each with gains greater than 1.51%. Alibaba (BABA), Alphabet, and Facebook (FB) were at the bottom of the list with 2% or more declines. Some growth stocks did well. SNAP (SNAP) had a great day with a +5.15% gain. Ehang Holdings (EH), Palantir (PLTR) and Grow Generation (GRWG) all had gains, albeit modest compared to recent history, at around 0.5% to 0.75%. DataDog (DDOG) , Okta (OKTA), Peloton (PTON) and JD.com (JD) were at the bottom of the growth list. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead The short-term 3 month and 6 month bill auctions will be on Monday. Late in the after TIC Net Long-Term Transactions will show how much investors are trading in foreign securities markets (both inbound and outbound to the US). The number is directly linked to currencies since the investors first need to buy the local currency before investing. Monday's earning reports will include a couple interesting small-caps: Vuzix (VUZI) and Desktop Metal (DM). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index dipped back below the 21d EMA and 50d MA lines, but was able to close above the 21d EMA. The five-day trend line points to a +1.51% advance while the one-day trend line points toa a +0.63% advance. Both would be moves back above the 50d MA. The longer trend-line from the 2/16 ATH points to a -3.72% decline, moving the index back below the 13,000 area. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's been a wild week and I'm glad the weekend is here. The up and down of Technology and Growth stocks left investors not sure whether to be in or out of the action. If you found other plays in industrials or cyclical stocks, you might have had a great week. I used the Nasdaq as the basis for the daily update because it represents most closely the stocks I invest in. But keep in mind that the Dow Jones Industrial average and the Russell 2000 are hitting new all-time highs. The S&P 500 index is also near new all-time highs. Once the rotation settles, we should see the Nasdaq start to move along more closely with the other indexes. Even with the choppy week, the Nasdaq does close the week with gains over last week. Check your watch lists and find stocks that are acting pretty well compared to their peers and the market. I found the DELL chart recently and it seems DELL didn't get the memo for the tech correction. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Daily Market Update for 3/11Trend lines drawn from the 2/16 ATH (17d), 3/4 (5d) and today 3/10 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, March 11, 2021 Facts: +2.52%, Volume lower, Closing range: 81%, Body: 67% Good: Another higher high and higher low, back above 21d EMA and 50d MA Bad: Not much, resistance at 13,400 Highs/Lows: Higher high, higher low Candle: Thick red body with small upper and lower wicks, low closing range Advance/Decline: Almost three advancing stocks for every declining stock Indexes: SPX (+1.04%), DJI (+0.58%), RUT (+2.31%), VIX (-2.88%) Sectors: Technology (XLK +2.14%) and Communications (XLC +1.89%) were top. Utilities (XLU -0.26%) and Financials (XLF -0.29%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The back and forth continues as the Nasdaq and technology stocks rise again. The sector list has flipped back and forth the last several days as investors rotate in and out of big tech and growth stocks. Today, the market rallied as jobs reports showed positive gains in the labor market and the stimulus is proceeding to Biden's signature. Technology was back on top while Financials moved to the bottom. The Nasdaq closed with a +2.52% gain on lower volume. The 67% green body was formed in the morning as the index quickly rose to intraday highs around 13,400 and stayed there the rest of the day. The short upper wick is above an 81% closing range. There were almost three advancing stocks for every declining stock. All four major indexes gained for the day with the Russell 2000 (RUT) advancing 2.31%, just behind the Nasdaq performance. The S&P 500 gained +1.04%. The Dow Jones Industrial gained +0.58%. The VIX volatility index declined -2.88%. The sector list flipped once again with Technology (XLK +2.14%) moving to the top, followed by Communications (XLC +1.89%) and Consumer Discretionary (XLY +1.53%). Financials (XLF -0.29%) moved to the bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.44%. Yields on the US 30y and 10y treasury bonds rose. The 2y bond yields dropped. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both gained for another day. Silver (SILVER) and Gold (GOLD) declined just slightly. Crude Oil (CRUDEOIL1!) gained. Timber (WOOD) continues to advance. Copper (COPPER1!) advanced while Aluminum (ALI1!) advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.571 as investors get more bullish. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is moving back toward the greed level. The NAAIM exposure index moved all the way down to 0.48. That's the lowest exposure since April of 2020 and brings up the question of what is driving prices higher if investment managers are reducing positions. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four big mega-caps advanced for the day. Alphabet (GOOGL) had the biggest advance with a +3.16% gain. Microsoft (MSFT) advanced +2.03%. Both Alphabet and Microsoft are trading above their 21d EMA and 50d MA lines. Apple (AAPL) and Amazon (AMZN) had gains of +1.65% and +1.83% but remain under their 21d EMA and 50d MA lines. Taiwan Semiconductor (TSM), New Oriental Ed (EDU), PayPal (PYPL) and Tesla (TSLA) were the top four mega-caps. AT&T (T) and Verizon (VZ) were at the bottom of the list despite Communications ending near the top of the sector list. Almost all the growth stocks in the daily update list had gains. UP Fintech (TIGR), Ehang Holdings (EH) and Digital Turbine (APPS) topped the list with more than 14% gains. SUMO Logic declined 13.51% after beating earnings but offering soft sales guidance. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Friday's producer price index data will complement the consumer price data earlier in the week. In addition, the inflation expectation and consumer sentiment numbers released after the market opens will be watched closely. Sharp (SHCAY) will report earnings on Friday before market open. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The Nasdaq moved above the 21d EMA and 50d MA lines today and met resistance around 13,400. The five-day and one-day trend lines both point to another gain tomorrow that will be a +1.29% advance. The longer trend-line from the 2/16 ATH points to a -4.60% decline, moving the index back below the 13,000 area. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Having the index close above the 21d EMA and 50d MA is a great positive sign for the rally. Another advance on higher volume would solidify the rally in my opinion and I'd mark the bottom as 2/5 and update the trend-lines. Still, I have a few concerns. The NAAIM exposure index moving to less than 50% while the market rallies is a mystery. What is driving prices higher if positions are being reduced by money managers. The answer could be the record amount of retail trading and the popularity of options trading. Another indicator I've started to watch, but haven't been including here is the TRIN.NQ ARMS Trading Index. This index measures the Advance/Decline ratio against the Advancing Volume / Declining Volume ratio. A number of 1.00 indicates a balance of volume between advancing and declining stocks. A low number under 0.5 would mean there is a larger amount of volume going to advancing stocks and could indicate panic buying as investors buy the dip. Nonetheless, an advance past the 21d EMA tells me there's reason to look at opportunities for entry with controlled risk. I'd be selective about what stocks are setting up with proper bases vs which are rebounding and may turn back around in the coming week as rally buying fades. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Daily Market Update for 3/10Trend lines drawn from the 2/16 ATH (16d), 3/3 (5d) and today 3/9 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, March 10, 2021 Facts: -0.04%, Volume lower, Closing range: 14%, Body: 69% Good: Higher high, higher low, support above 13,000 Bad: Rejection off 21d EMA in morning led to selling and close near low Highs/Lows: Higher high, higher low Candle: Thick red body with small upper and lower wicks, low closing range Advance/Decline: More advancing stocks than declining stocks Indexes: SPX (+0.60%), DJI (+1.46%), RUT (+1.81%), VIX (-6.12%) Sectors: Energy (XLE +2.53%) and Financials (XLF +2.04%) were back on top. Technology (XLK -0.40%) was bottom. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The rotation settles. There was still signs of rotation in the market today, with the sector list flipping once again. But the effect is much more subdued than the past week. The passing of the stimulus has investors eyes wide open while they sent the Dow Jones Industrial to all-time highs. The Nasdaq was not able to benefit from the enthusiasm as it declined -0.04%. A sideways move, but still a day marked by selling after a morning gap-up. The closing range of 14% is underneath a thick red body of 69% and slightly longer upper wick formed just after the market opened. There were more advancing stocks than declining stocks, however volume on declining stocks was higher. The other three major indexes all gained for the day. The Russell 2000 (RUT) had the biggest gains with a +1.81% advance. The Dow Jones Industrial (DJI) gained +1.46% while the S&P 500 (SPX) gained +0.60%. The Dow Jones Industrial has a very bullish candle that closed at an all-time high. The VIX volatility index declined another -6.12%. The sector list flipped back and forth the past three days with the top and bottom trading positions. Energy (XLE +2.53%) and Financials (XLF +2.04%) were back on top. Technology (XLK -0.40%) was on the bottom and the only losing sector for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.15%. Yields on the US 30y bond rose for the day while the 10y and 2y yields declined. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both gained for another day, showing investors' confidence in US corporations as the stimulus bill is passed. Silver (SILVER) and Gold (GOLD) both advanced for another day. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) advanced while Aluminum (ALI1!) declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.594 as investors get more bullish. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index remains near neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four big mega-caps declined for the day. Microsoft (MSFT) declined -0.58% and moved back below its 21d EMA. Alphabet (GOOGL) declined -0.20% but closed above the key moving average lines. Apple (AAPL) and Amazon (AMZN) declined and remain below both key moving average lines. Exxon Mobil (XOM) was the leading mega-cap of the day, gaining +3.07% on optimism over economic activity picking up in sectors that depend on oil.Comcast (CMCSA), Bank of America (BAC), and Walmart (WMT) were other winners at the top of the mega-cap list. New Oriental Ed (EDU) lost 14%. Alibaba (BABA), Taiwan Semiconductor (TSM) and ASML Holding (ASML), all mega-caps with foreign HQ. The big winners in growth stocks were Draft Kings (DKNG) and Penn Gaming (PENN) with 11.40% and 6.65% gains. Digital Turbine (APPS) continues to reverse from recent lows with a +6.13% gain today. Still, the list of growth stocks tracked by the daily update has more losers than winners. MongoDb (MDB) , SUMO Logic (SUMO) and Peloton (PTON) all had losses of more than 4%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Thursday will bring an update to Initial Jobless Claims and the JOLTs Job Openings report. Both are expected to improve over previous numbers. JD.com (JD) is the big mega-cap reporting on Thursday before market opens. DocuSign (DOCU) and Celsius (CELH) will also report Thursday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The Nasdaq was able to stay above 13,000 today. It tested but was not able to move above the 21d EMA. The five-day trend line points to a positive gain of +1.25% for Thursday. The one-day trend line is pointing to a -0.90% loss that would break back below the 13,000 area. The longer trend-line from the 2/16 ATH points to a -2.76% decline for tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up I am still waiting for a positive gain on higher volume, and ideally a move back above the 21d EMA. That will show more support in the Nasdaq and in our favorite tech and growth stocks. It's also a good time to look out beyond the stocks that were working so well in 2020 and discover the stocks that are likely to benefit from the economic recovery. The good news is that the swings in bond yields and fears of inflation seem to be subsiding which will bring a little more predictability to the market. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
7
Daily Market Update for 3/9Trend lines drawn from the 2/16 ATH (16d), 3/3 (5d) and today 3/9 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, March 9, 2021 Facts: +3.69%, Volume higher, Closing range: 71%, Body: 56% Good: Good gain on higher volume, higher high, higher low, above 13k Bad: Selling in last hour of day Highs/Lows: Higher high, higher low Candle: Slightly longer upper wick with a thick green body Advance/Decline: Two advancing stocks for every declining stock Indexes: SPX (+1.42%), DJI (+0.10%), RUT (+1.91%), VIX (-5.65%) Sectors: Consumer Discretionary (XLY +3.78%) and Technology (XLK +3.40%) were the top sectors. Financials (XLF -0.91%) and Energy (XLE -1.75%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The rotation reverses. Today saw a reversal of the past several days rotation as money flooded back into big tech, consumer discretionary, and growth stocks. Treasury bond yields seemed to stabilize a bit allowing investors to turn their eyes on the stimulus and the impact it will have on performance in the near term. The Nasdaq closed with +3.69% gain on higher volume. The closing range of 72% came after some selling in the final hour of trading, forming the upper wick. The green body covers 56% of the candle and represents a day that was dominated by the bulls. There were two advancing stocks for every declining stock. All major indexes had gains for the day with the Dow Jones Industrial average (DJI) having the smallest gain in contrast to the past several days. The S&P 500 (SPX) gained +1.42% while the Russell 2000 gained +1.91%. The VIX volatility index declined -5.65%. Consumer Discretionary (XLY +3.78%) and Technology (XLK +3.40%) were the top sectors as investors rushed in for buying opportunities. Financials (XLF -0.91%) and Energy (XLE -1.75%) were bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) pulled back -0.38% after several days of gains. Yields on the US 30y, 10y and 2y treasury bonds all declined for the day. That was a welcome change for investors nervous about the impact of higher yields on big tech and growth stocks. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both gained after several days of declines. Silver (SILVER) and Gold (GOLD) both advanced for the day. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.661. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four big mega-caps advanced for the day. Apple (AAPL) and Amazon (AMZN) had the biggest gains with +4.06% and 3.76% advances. Microsoft (MSFT) gained +2.81% and Alphabet (GOOGL) gained +1.64%. Microsoft and Alphabet closed back above their 21d EMA. Apple and Amazon remain below the 21d EMA and 50d MA lines. Tesla (TSLA) made a huge upside reversal with a 19.65% gain. Nvdia (NVDA), ASML Holding (ASML) and PayPal (PYPL) all gained more than 6%. Walt Disney (DIS) dropped -3.66% after a big gain the previous day. Bank of America (BAC) and Exxon Mobil (XOM) led their respective sectors lower with declines of over 2% each. Sixteen of the growth stocks tracked for the daily update had gains over 10%. Another eighteen had gains between 5% and 10%. Looking at the extended list of growth stocks, the number of stocks with big gains just keeps going. Only Dr Horton (DHI) had a loss, but that was after two days of gains despite the market dipping. Ehang Holdings (EH) was the big winner with a 31% gain. FUTU Holdings (FUTU) and UP Fintech (TIGR) were also Chinese stocks at the top of the growth stock list. Grow Generation (GRWG) had an 18% gain. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There are two significant economic events for Wednesday. First, I had anticipated the stimulus vote being today, but Nancy Pelosi announced shortly after my update that it would likely happen Wednesday. The second big event will be the 10y note auction by the US Treasury. Today's 3y note auction had an average response, alleviating some fears by investors. Another look at inflation will come on Wednesday with the release of consumer price index data in the morning. Crude Oil Inventories data will come after the market opens. Oracle (ORCL) will report on Wednesday. Joining Oracle, will be Campbell Soup (CPB), Cloudera (CLDR) and Sumo Logic (SUMO). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The Nasdaq was able to get back above 13,000 today. It paused slightly in that area before moving higher, showing it's still both a support and resistance line. If today's rebound continues, the one-day trend line points to a +1.92% gain for tomorrow that would take the index back above the 21d EMA. Another higher volume gain that restores the index above the 21d EMA would be a confidence booster. The five-day trend line points to a -1.75% loss, back below the 13,000 area. The trend line from the 2/16 ATH is pointing to a -2.94% decline for tomorrow. I'll remove the head and shoulders pattern from the discussion since we moved back above the neckline. If we decline again, then we'll revisit the levels in the pattern. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a positive expectation breaker today. Monday's selling seemed the index wanted to go lower, but the market does what it wants to do. The rotation back into big tech obviously helps the tech-heavy Nasdaq to have huge gains. Remember that rotations swing back and forth before the right level is discovered in the market. There's plenty of evidence of panic buying in today's bullish results. That panic buying can easily turn into profit taking, especially as these stocks with massive gains hit overhead supply and investors take the chance to get out of what was a losing position. So proceed with caution. The expectation tomorrow is set for sideways or higher. Keep an eye on your favorite stocks and see how they perform over the next few days before overcommitting. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Daily Market Update for 3/8Trend lines drawn from the 2/16 ATH (15d), 3/2 (5d) and today 3/8 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, March 8, 2021 Facts: -2.41%, Volume lower, Closing range: 2%, Body: 73% Good: Held above 12,600 as market closed Bad: Could not hold short rally in morning, selling the rest of afternoon Highs/Lows: Higher high, higher low Candle: Short upper wick over a thick red body, no lower wick Advance/Decline: More than one declining stock for every advancing stock Indexes: SPX (-0.54%), DJI (+0.97%), RUT (+0.49%), VIX (+3.28%) Sectors: Utilities (XLU +1.41%) and Materials (XLB +1.34%) were the top sectors. Communications (XLC -1.34%) and Technology (XLK -2.42%) were bottom. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The rotation continues. It's not often that a rotation is so clearly seen, with the Dow Jones ending the day up nearly 1% and the Nasdaq ending the day down 2.41%. Nine sectors outperformed the broader S&P 500 index, while the other two sectors lost enough to bring down the index for a loss by the end of the day. The Nasdaq closed the day with a -2.41% loss on lower volume. The closing range of 2% followed an afternoon of selling that formed the 73% red body underneath a small upper wick from the short morning rally. There were more declining stocks than advancing stocks. The Dow Jones Industrial average (DJI) gained +0.97% for the day. The Russell 2000 (RUT) advanced +0.49%. The S&P 500 declined -0.54%. The VIX volatility index rose +3.28%. Utilities (XLU +1.41%) and Materials (XLB +1.34%) were the top sectors for the day, with 8 out of the 11 SPDR sectors advancing for the day. Communications (XLC -1.34%) and Technology (XLK -2.42%) were the bottom, weighted down by losses from large mega-caps that dominate the two sectors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) continues to advance with a +0.45% gain today. It has now regained a support area from the second half of 2020. Yields on the US 30y and 10y treasury bonds rose for the day. The 2y yield spiked above 1.5 again with a 16% increase to 0.169. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) prices both dropped. Silver (SILVER) and Gold (GOLD) both declined for the day. Crude Oil (CRUDEOIL1!) pulled a bit back from its recent advance. Timber (WOOD) advanced. Copper (COPPER1!) advanced while Aluminum (ALI1!) declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio dropped to 0.633. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index moved toward the greed side. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four big mega-caps declined for the day. Alphabet (GOOGL) and Apple (AAPL) had the biggest losses with -4.27% and -4.17% declines. Microsoft (MSFT) declined -1.82%. Amazon (AMZN) declined for -1.62%. All four are trading below their 21d EMA and 50d MA. They continue to weigh down the indexes and their respective sectors as they have an overweight impact due to their size. Several mega-caps did very well for the day. Walt Disney (DIS) gained +6.27% for the day. Roche Holding (RHHBF) gained 5%. Oracle (ORCL) and Cisco Systems (CSCO) proved not all is bad for mega-cap tech stocks with gains of around 3% each. Mastercard (MA) and Visa (V) also appeared at the top of the mega-cap list. PayPal (PYPL), Taiwan Semiconductor (TSM), Tesla (TSLA), and Nvidia (NVDA) occupied the bottom of the list with over 5% losses each. Growth stocks tracked by the daily update were mostly down for the day. Dr Horton (DHI), Draft Kings (DKNG), Ehang Holdings (EH) and Penn National Gaming (PENN) all had gains for the day. FUTU Holdings (FUTU), UP Fintech (TIGR) both were hit with greater than 10% declines. Digital Turbine (APPS) declined a huge 16.32% and is nearly 40% below its all-time high set less than a week ago. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead The EIA Short-Term energy outlook will be released before market opens on Tuesday. After market close, the API Weekly Crude Oil stock numbers will be released. The house is expected to vote on the stimulus bill on Tuesday. MongoDb (MDB) and Open Lending (LPRO) will report earnings tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The trend line from the 2/16 ATH is pointing to a +0.60% gain for tomorrow that would be a nice bounce the 12,600 area. The one-day trend line is pointing to a -1.63% which would test the 12,400 low from Friday. The five-day trend line points to a -2.19% loss, breaking thru the 12,400 mark. We've been keeping an eye on a head and shoulders pattern. This pattern represents an attempt to move back to new highs that was rejected at a previous resistance point. Typically the height of the head is measured to determine the potential move downward that will occur as the price breaks below the neck line, which occurred last week. I've also been cautioning that the drop would not happen in a straight line. Expect some back-and-forth as the index looks for a bottom. The target low from the pattern is 6.3% below Monday's close. Of course, the index could move lower than that point. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Although the expectation set for today was sideways or higher based on Friday's candle, I also noted the weak volume in the rebound on Friday that gave me concern about holding the gains into Monday. Today's sell-off was also at low volume, so it did not really set a decisive direction for the index. Nonetheless, buyers of Nasdaq mega-cap stocks were missing even as the index dipped to a lower close. Given the thick red bodied candle, the expectation for tomorrow is lower. The passing of the stimulus may provide some support to some segments of stocks but it may also stoke more fears of inflation and rising interest rates that have pulled down big tech and growth stocks. Keep an eye out for stocks that are preforming well relative to the indexes and put them on your watch list. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Market Week In Review - 3/1/2021 - 3/5/2021The Market 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. I do occasionally have some errors or typos and will correct them in my blog or in the comments on TradingView. I do not have an editor and do this in my free time. 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 view on the past week What's coming in the next week The Bullish View, The Bearish View Key index levels to watch out for Wrap-up If you have been following my daily updates, you can skip down to the “The Meaning of Life”. If not, then this first part is a great play-by-play recap for the week. Click the original charts for more detail each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, March 1, 2021 Facts: +3.01%, Volume lower, Closing range: 97%, Body: 78% Good: Strong buying throughout day, close above 21d EMA Bad: Nothing Highs/Lows: Higher high, higher low Candle: Thick green body with short upper/lower wicks, slightly longer lower wick Advance/Decline: More than three advancing stocks for every declining stock Indexes: SPX (+2.38%), DJI (+1.95%), RUT (+3.37%), VIX (-16.46%) Sectors: Technology (XLK +3.22%) and Financials (XLF +3.13%) were top. Consumer Staples (XLP +1.01%) and Real Estate (XLRE +0.11%) were bottom. Expectation: Higher Monday kicked off the week with an upside reversal from last week's downtrend. A small gap up was closed early in the session that was dominated by buying the rest of the day. The gains were large and broad across the market as manufacturing data released in the morning was better than expected. The Nasdaq closed the day with a +3.01% gain. Volume was lower than Friday. The closing range of 97% represented the buying that continued into close after gains throughout the day created a 78% green body. More than three stocks gained for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, March 2, 2021 Facts: -1.69%, Volume lower, Closing range: 3%, Body: 97% Good: Stayed above 50d MA Bad: All red body, no visible upper/lower wicks, back below 21d EMA Highs/Lows: Higher high, lower low Candle: Marubozu black candle with no wicks, all red body, outside day Advance/Decline: More than three declining stocks for every advancing stock Indexes: SPX (-0.81%), DJI (-0.46%), RUT (-1.93%), VIX (+3.21%) Sectors: Materials (XLB +0.56%) only gaining sector. Consumer Discretionary (XLY -1.15%) and Technology (XLK -1.59%) were bottom. Expectation: Sideways or Lower The market gave up half of yesterday's gains in a continuation of two weeks of choppiness as investors await a stimulus bill that will have both positive and negative impacts on equities. Today's expectation breaker after yesterday's session requires a deeper look to understand. Investment has been rotating in and out of Consumer Discretionary and Technology for the past two weeks. The Nasdaq closed the day with a -1.69% decline on lower volume. The 97% red body with no visible upper and lower wick forms a Marubozu (shaven head) candlestick. The 3% of lower wick was formed in just the last few minutes of trading as most of the day was dominated by selling. There were three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, March 3, 2021 Facts: -2.7%, Volume higher, Closing range: 1%, Body: 90% Good: 13,000 just barely holding on Bad: Higher volume selling day shows institutional distribution Highs/Lows: Lower high, lower low Candle: Tiny upper wick created at open, thick red body with no lower wick Advance/Decline: More than two declining stocks for every advancing stock Indexes: SPX (-1.31%), DJI (-0.39%), RUT (-1.06%), VIX (+10.66%) Sectors: Energy (XLE +1.47%) and Financials (XLF +0.78%) were the top sectors. Consumer Discretionary (XLY -2.35%) and Technology (XLK -2.52%) were bottom. Expectation: Sideways or Lower The market continued its retreat on Wednesday with another session of selling that was shared broadly across the indexes. Only a few cyclical sectors were able to hang onto gains for the day as investors moved from high priced big tech and consumer discretionary stocks to recovery stocks expected to benefit from the economic recovery. The Nasdaq closed the day with a -2.70% loss on higher volume, marking a clear distribution day for the index. For a second day in a row, the index sold off for most of the day, producing a thick red body with no visible lower wick. The closing range was 1% and the red body covers 90% of the candle. Over two stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, March 4, 2021 Facts: -2.11%, Volume higher, Closing range: 33%, Body: 45% Good: Support at 12,550 area Bad: Rejected at 13,000, new low for year Highs/Lows: Lower high, lower low Candle: Red body in center of candle with upper and lower wicks from choppy session Advance/Decline: Over seven declining stocks for every advancing stock Indexes: SPX (-1.34%), DJI (-1.11%), RUT (-2.76%), VIX (+7.12%) Sectors: Energy (XLE +2.39%) was the only sector with gains. Consumer Discretionary (XLY -2.12%) and Technology (XLK -2.21%) were bottom. Expectation: Lower The sky is not falling. But the market is! It can be confusing to see the news of reopening of economies around the US and world, positive signs of economic recovery, and yet to have the market be correcting at the same time. Thursday continued the market slide, caused by investor's fears that the economy will recover too fast and inflation will take off beyond the desired 2% that the fed targets, impacting negatively the valuations of mega-caps and growth stocks. The Nasdaq closed down another -2.11% on much more volume than the previous two sessions. The closing range was a little better at 33%, but still not great. The 45% red body sits in the middle of the candle with an upper wick created by a morning rally to 13,000 and a lower wick created by the afternoon dip to 12,550. The support at 12,550 was expected, but may be temporary. There were over seven declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, March 5, 2021 Facts: +1.55%, Volume lower, Closing range: 96%, Body: 11% Good: Morning selling turned into afternoon buying, high closing range Bad: Shrinking volume into afternoon, lower high, lower low Highs/Lows: Lower high, lower low Candle: The long lower wick shows the morning selling was bought back for a rally into afternoon Advance/Decline: About three advancing stocks for every two declining stocks Indexes: SPX (+1.95%), DJI (+1.85%), RUT (+2.11%), VIX (-13.69%) Sectors: Energy (XLE +3.74%) and Industrials (XLI +2.37%) were the top sectors. Real Estate (XLRE +1.15%) and Consumer Discretionary (XLY +0.64%) were bottom. Expectation: Sideways or Higher The week ended with some positive market gains to take into the weekend. It's a start, but there are still several tests for the indexes to pass and prove investors are here to stay and rally next week. The Nasdaq closed the day with a +1.55% on slightly lower volume than the previous day, but higher than average. The closing range was a high 96% with a thin body of 11% that rests above a very long lower wick. There were three advancing stocks for every two declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) There is a lot to look at in reviewing this past week's market. An outsized rotation among sectors presented itself as a correction in the Nasdaq. The rotation pulled the index down 10% from all-time highs, the level typically viewed as correction in a market. If you kept your eyes only on the Nasdaq, you might have missed that eight out of the eleven sectors defined by the SPDR ETFs ended the week with positive gains. Several sectors never dipped into the negative. The question on my mind and many investors' minds is where does it go from here. Of course, the market will always do what the market wants to do. But we can pick apart some of the signals we have in front of us and build some expectations for the coming week. From those expectations, I build a game plan to make sure I'm protected from further loss but also don't miss a potential huge buying opportunity. Monday started the week with a huge positive gain coming off the tough previous week. Stimulus progress over the weekend and some easing of concerns over inflation brought the buyers back into tech stocks. Things looked good and I set an expectation for higher on Tuesday. That expectation was busted over the next three days. Tuesday's candle set off alarms with no upper and lower wick; just a tick red body. A short-lived rally midday couldn't fend off the bears as the index moved back toward the 50d moving average line. Wednesday continued to sell, but still closed above the 13,000 support area that held several times since the beginning of the year. That area also marked a neck line in a head and shoulders pattern on the chart. Thursday broke the neck line and sent the index back to 12,500 area and erasing the year to date gains. That brings us to Friday. The day was confusing to me. Much of the media claimed victory for the markets as a result of better than expected employment data. That data came at 8:30 in the morning, but the market opened with high volume distribution that didn't stop until 11:30. For the Nasdaq, the selling stopped right at 12,400 and the rest of the day was accumulation, but at much lower volume. It was very similar to the intraday pattern on 2/23 which was followed by a low volume accumulation day on 2/24. 2/25 brought the worst distribution day since September. The Nasdaq closed the week down -2.06% on higher volume. It's the third week in a row of distribution for the tech heavy index. The closing range for the week was 43%. That's not too bad for closing range and reflects the bounce on Friday that brought the other major indexes back to positive closes for the week. The glaring characteristic on the weekly chart is the breakdown of the channel drawn from the March bottom. However, if you rewind the chart to the week of October 26th, the lower line of the channel drawn at that point was also violated (causing us to redraw the current channel). The following week was a 9% gain. The S&P 500 (SPX) advanced +0.81%. The Dow Jones Industrial average (DJI) gained 1.82%. The Russell 2000 (RUT) lost -0.40% for the week. The VIX volatility index closed the week with a -11.77% decline. If you kept your eyes only on big tech and growth stocks, you might have missed that many sectors had fairly good advances this week. The sector chart supports the thesis that there is an outsized rotation in progress that is presenting as a correction, but that there is still a level of support in the broader equities market. The top two sectors, Energy ( XLE ) and Financials ( XLF ), never dipped into negative territory even with Thursday's broad sell-off. The other cyclical Industrials ( XLI ) and Materials ( XLB ) also performed well for the week. Materials was leading for the week at the end of Tuesday, but backed off a bit later in the week. There was caution visible in the sectors as Utilities ( XLU ) and Consumer Staples ( XLP ) advanced. These are safe bet sectors during corrections. Investors moved from sectors that are more exposed to pressures from inflation and higher yields. Consumer Discretionary ( XLY ) and Technology ( XLK ) were the hardest hit among the sectors. Real Estate ( XLRE ) is also at the bottom of the list. At center stage is the bond market sell-off that is driving higher yields. Interest rates that are based on the yields will make borrowing costs higher. Add to that fears of higher inflation would bring interest rate adjustments earlier than initially expected. The higher interest rates benefit big banks that drive the Financials sector higher. But it depresses the future value that was priced into high growth sectors like Technology. US 30y and 10y Treasury Bond yields continued to rise and widen the gap with shorter term treasury bonds. In addition the shorter term bonds, including the 2y, are experiencing a higher than usual level of volatility. That volatility makes them less useful as a hedge for investors, causing further selling and higher yields. Yields go up when bond prices go down. High Yields Corporate Bonds (HYG) actually increased a bit after last week's dip. Investment Grade (LQD) corporate bond prices continued to decline. The US Dollar (DXY) advanced +1.21% for the week. The strengthening dollar comes at the expense of currencies that were doing well earlier in the pandemic cycle including the Australian Dollar and Swiss Franc. Those countries were seen as recovering faster than the United States. As the US economy picks up momentum, the US dollar will continue to strengthen. Silver (SILVER) and Gold (GOLD) both declined for another week. Crude Oil Futures (CRUDEOIL1!) had another week of gains as OPEC decided to not increase production. Timber (WOOD) advanced for the week. Copper (COPPER1!) declined while Aluminum (ALI1!) gained for the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The four big mega-caps all had very different performance this week. Alphabet (GOOGL) did very well, gaining +3.72% for the week. Apple (AAPL) had a small gain, but still trades well below its 10w moving average. Microsoft (MSFT) had a -0.34% loss, but was able to close the week above the 10w moving average line. Amazon (AMZN) continued to move lower with a -2.99% and a close below the 40w moving average. The recovery stocks I featured last week, with the exception of Exxon Mobil, had losses for the week. However, they are all trading above key moving average lines and still in upward trends. Exxon Mobil has almost doubled in price since November. That milestone could happen this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking Deeper at the Rebound I want to take a deeper look at Friday's rebound after the morning dip. The timing didn't make much sense as I couldn't find any discernable catalyst to reverse the morning selling. The reverse happened around 11:30, two hours after the positive employment data hit the market. The reversal was also at a very odd round 12,400 for the Nasdaq. The below chart is the intraday 15m chart and the thing that sticks out is the contrast of volume in the morning selling vs the volume as investors came in to buy the dip. This would indicate that larger institutions were distributing in the morning, but a smaller number of investors were accumulating in the afternoon. In fact, the Volume Weighted Average Price for the day did not regain positive territory. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Growth vs Value I've shared growth vs value charts in the past that show the amazing parabolic difference between growth stocks and value stocks, especially in 2020 after the pandemic. February saw a dramatic dip in the chart as investors are moving from growth to value. That move started even before the scare around inflation and higher bond yields. Even if the volatility in bonds gets under control, there is still going to be plenty of rotation in the system until value stocks have a chance to catch up a bit with growth stocks. That rotation is likely to continue putting pressure on the Nasdaq that carries a high percentage of high tech and growth stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.816, with investors still showing balance of bullish and bearish sentiment. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment which typically proceeds a pullback in the market. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction. It hit a low of 0.503 two weeks ago leading into this correction. The CNN Fear & Greed index moved is neutral. Money managers are at a 65 leveraged level as measured by the NAAIM Exposure Index. That's down from being over 100 a few weeks ago. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead The big news for Monday has already happened. The stimulus bill passed in the Senate along party lines and now moves to the House where it's expected to pass. The vote is scheduled for Tuesday. Otherwise, there is not much other economic news planned for Monday. The EIA Short-Term energy outlook will be released before market opens on Tuesday. After market close, the API Weekly Crude Oil stock numbers will be released. The house will vote on the stimulus bill on Tuesday. Another look at inflation will come on Wednesday with the release of consumer price index data in the morning. Crude Oil Inventories data will come after the market opens. Maybe one of the most significant economic events for the week will be the 10y Note Auction at 1pm. Thursday will bring an update to Initial Jobless Claims and the JOLTs Job Openings report. Both are expected to improve over previous numbers. Friday's producer price index data will complement the consumer price data earlier in the week. In addition, the inflation expectation and consumer sentiment numbers released after the market opens will be watched closely. Earnings reports will again be dominated by smaller cap companies. Earnings reports on Monday will include Livongo (LVGO), Niu Tech (NIU), Gohealth (GOCO). On Tuesday, MongoDb (MDB) and Open Lending (LPRO) will report. Oracle (ORCL) will report on Wednesday. Joining Oracle, will be Campbell Soup (CPB), Cloudera (CLDR) and Sumo Logic (SUMO). JD.com (JD) is the big mega-cap reporting on Thursday before market opens. DocuSign (DOCU) and Celsius (CELH) will also report Thursday. Shard (SHCAY) will report earnings on Friday before market open. Be sure to check for scheduled earnings reports for stocks in your own portfolio. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Should we start, or end with the $1.9 trillion stimulus bill. Or both. It's a near certainty that the bill will pass through the house this week with the vote scheduled for Tuesday. The bill will include stimulus checks to be paid out based on household size and income. Additional money will be put toward vaccinations and testing. There is aid for state and local governments facing higher costs and lower tax revenue. Critical infrastructure projects, including broadband internet, were added to the bill this week. There is a plethora of other protections for families struggling in the pandemic with unemployment, rent and health insurance. Airlines, Airports and Small Businesses will get extra support. All of that could be a catalyst to more spending by consumers. In addition to the stimulus checks going toward new purchases, there is a record amount of consumer savings accumulated during the pandemic. Debt is at all-time lows. As the lockdowns are lifted, consumers will want to get out and spend money, especially on long-overdue vacations. Despite the distribution on the Nasdaq, the S&P 500 and the Dow Jones Industrial average had good weeks. The number of sectors that ended the week with gains supports the thesis that an oversized rotation from growth stocks to value stocks has presented itself as a correction, but underneath the charts is still broad support for the equities markets among investors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The shock in the bond markets and impact on equities is far from over. As the dollar gains strength and consumer spending picks up after the stimulus, there will certainly be more pressure on bond prices, sending yields even higher. That will not only impact the cost of servicing debt in high growth companies, but will increase adjustable mortgage payments based on the bond yields. With the increased consumer spending expected after the stimulus, inflation will be closely watched by investors. If the economy overheats, the fed will be forced to rethink monetary policy. When that happens we could find ourselves in another 'taper tantrum'. The term was given to the surprise on May 22, 2013 when investors found the fed would reduce bond purchasing. Yields rose as bond prices dipped and small pull back occurred in equity markets over the next few weeks. Only this time around, the impact is likely to be much bigger to match the unprecedented amount of quantitative easing being used to prop the economy. The rebound in prices on Friday was a welcome change. However, the volume profile throughout the day gives the appearance that big institutions were distributing. The accumulation in the afternoon came with much smaller volume as possibly investors were buying the dip. Those kind of weak gains don't last long. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The index has several tests to pass this week to build confidence in a rally attempt. First on the positive side: First, the index needs to close back above the 13,000 support/resistance area. That area has been the pivot point for several rallies and dips since early December. That would also bring the index back above the neck line of the head and shoulders pattern. The next goal will be to close back above the 50d moving average, currently at 13,340.74. Sustaining prices above that line will bring the 10d MA back up above the line also, signaling an uptrend. The 21d EMA is approaching a cross under the 50d MA. The index needs to get above 13,390.23 to put the 21d EMA back in an uptrend. 13,601.33 is the high of this past week. Make a higher high while also providing a higher low to end the downtrend on the weekly chart. 14,000 will be the next area of resistance. The index spent only 5 days above this mark. The all-time high is at 13,175.12. That might be a stretch to get there this week, but keep it in our sites. On the downside, there are several key levels to raise caution flags: At 12,757.61, the Nasdaq is 10% below the all-time high, a significant level for investors. 12,500-12,550 is a support area that held on Thursday before the index broke below it on Friday. 12,397.05 is the low of the past week where the index started its upside reversal on Friday. Several possible areas of support at 12,550, 12,250, and 12,000. The 200d MA is about 10% below the index at 11,622.33. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The Nasdaq moved into "official" correction this week as it dipped more than 10% off all-time highs. But there is more than what appears at the surface in the index chart. The rotation from growth to value and mega-cap to small-cap really started in early August and is now accelerating as the economy begins to show more signs of recovery. If you've been investing in growth stocks, it's probably been a tough few weeks. Many of those companies will show great performance, but their stock prices may still come down as investors weigh the net present value of those investments vs value stocks that are due to grow in 2021. Now is a great time to take a look at your watch lists. Trim the stocks that are performing worse than the rest of the market. Add stocks that are doing well relative to the dip in the market. The correction status remains and it's not a great time to make big bets until the market confirms a rally. But don't check out. Keep an eye on the daily moves and look for a few days of gains on higher volume and regaining a key moving average line like the 21d EMA. Those will be solid signs that investors are accumulating again and risk is lower. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
6
Daily Market Update for 3/5Trend lines drawn from the 2/16 ATH (14d), 3/1 (5d) and today 3/5 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, March 5, 2021 Facts: +1.55%, Volume lower, Closing range: 96%, Body: 11% Good: Morning selling turned into afternoon buying, high closing range Bad: Shrinking volume into afternoon, lower high, lower low Highs/Lows: Lower high, lower low Candle: The long lower wick shows the morning selling was bought back for a rally into afternoon Advance/Decline: About three advancing stocks for every two declining stocks Indexes: SPX (+1.95%), DJI (+1.85%), RUT (+2.11%), VIX (-13.69%) Sectors: Energy (XLE +3.74%) and Industrials (XLI +2.37%) were the top sectors. Real Estate (XLRE +1.15%) and Consumer Discretionary (XLY +0.64%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The week ended with some positive market gains to take into the weekend. It's a start, but there are still several tests for the indexes to pass and prove investors are here to stay and rally next week. The Nasdaq closed the day with a +1.55% on slightly lower volume than the previous day, but higher than average. The closing range was a high 96% with a thin body of 11% that rests above a very long lower wick. There were three advancing stocks for every two declining stocks. The major indexes all did well with the S&P 500 (SPX) gaining +1.95% and the Dow Jones Industrial average (DJI) gaining +1.85%. The Russell 2000 (RUT) had the best day with a +2.11% as small caps recovered from yesterday's sell-off. The VIX volatility index retreated -13.69%. All sectors ended the day with gains. Energy (XLE +3.74%) and Industrials (XLI +2.37%) led the sectors with the biggest gains, driven by a positive outlook for the economic recovery as job numbers came in higher than expected. At the bottom of the list were Real Estate (XLRE +1.15%) and Consumer Discretionary (XLY +0.64%). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) continues to advance with a +0.38% gain today. Yields on the US 30y and 10y treasury bonds remained about the same. The 2y yields declined for the day as short term bonds continue to trade with high volatility. High Yield Corporate Bonds (HYG) prices rose while Investment Grade Corporate Bond (LQD) prices dropped slightly. Silver (SILVER) declined while Gold (GOLD) advanced, both making small moves. Crude Oil (CRUDEOIL1!) futures made another big advance. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.816, remaining high compared to the past few months of overly bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. The CNN Fear & Greed index is neutral. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four big mega-caps advanced for the day. Alphabet (GOOGL) had the biggest move with a +3.10%, not needing to content with resistance at moving average lines. Microsoft (MSFT) moved back above its 50d MA with a +2.15% gain. Apple (AAPL) and Amazon (AMZN) also had gains, but are still trading well below their 21d EMA and 50d MA lines. Most mega-caps gained for the day, with Oracle (ORCL), Taiwan Semiconductor (TSM), Chevron (CVX) and Intel (INTC) leading the list with greater than 4% gains. Tesla (TSLA) did not find its way back into positive territory after the morning selling, closing the day with a -3.78% loss. Growth stocks were mixed. Paycom software gained +7.70%, likely benefiting from the strong employment data. FUTU Holdings (FUTU) and Dr Horton (DHI) also had big days with over 5% gains. Not all growth stocks recovered from the morning selling. Digital Turbine (APPS) closed with a -6.12% loss after dipping more than 16% in the morning. It was a similar story for CrowdStrike (CRWD), Chewy (CHWY) and MongoDB (MDB). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There is not much scheduled economic news to kick-off the week on Monday. We might have an update on the stimulus bill over the weekend that could impact markets. Earnings reports on Monday will include Livongo (LVGO), Niu Tech (NIU), Gohealth (GOCO). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance If today's afternoon rally continues into Monday, the one-day trend line points to a +3.05% gain on Monday that would take the index back to just below the 50d MA. The trend-line from the 2/16 ATH is pointing to a -1.10% decline for Monday. The five-day trend line points to a -3.98% loss. The index dipped below the 12,550 support area today before rallying and falling short of 13,000. We could count 12,400 as support which is where the index dipped to today. This week, we've been keeping an eye on a head and shoulders pattern. This pattern represents an attempt to move back to new highs that was rejected at a previous resistance point. Typically the height of the head is measured to determine the potential move downward that will occur as the price breaks below the neck line. The index is still below the neck line, so the pattern is still worth watching. I've also been cautioning that the drop would not happen in a straight line. Today's bounce back from the intraday low could be a temporary one. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking Deeper at the Rebound I want to take a deeper look at today's rally from the morning dip. The timing didn't make much sense as I couldn't find any discernable catalyst to reverse the morning selling. The reverse happened around 11:30, two hours after the positive employment data hit the market. The reversal was also at a very odd round 12,400 for the Nasdaq. The below chart is the intraday 15m chart and the thing that sticks out is the contrast of volume in the morning selling vs the volume as investors came in to buy the dip. This would indicate that larger institutions were distributing in the morning, but a smaller number of investors were accumulating in the afternoon. In fact, the Volume Weighted Average Price for the day did not regain positive territory. The response is to not get overly optimistic about the afternoon rally. Keep a cautious eye on what's happening below the surface. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's always nice to see a positive gain in the market. But there are still several tests that I'd like to see the index pass before getting more optimistic about a continued rally. First, I want to see higher volume during accumulation than I see during distribution. Second, the index needs to climb back above the 21d EMA to show its moving toward higher prices. Finally, I'd like the see the index make a higher weekly high and a higher weekly low to show a solid uptrend. Based on the daily chart, I'll set an expectation for sideways or higher on Monday. I think there is reason for caution here, but also don't want to be overly bearish or overly bullish and miss what's going on. I'll include this quote again from @MichaelGLamothe on twitter as its a good reminder to me: "I think it’s good to have a thesis about which way the market is going to move. The problem comes when we become too attached to it and want to be proven right. There’s tons of great reasons why the market will collapse & why it’ll blast off. Be open/ready for anything." Keep watching how stocks in your watchlist are performing compared to the movements in the market. The ones that have good relative strength are likely to be the ones to rally the most once the market resumes an uptrend. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
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