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RUSSELL 2000

Daily Market Update for 3/3Trend lines drawn from the 2/16 ATH (12d), 2/25 (5d) and today 3/3 (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 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 -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview 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. The Dow Jones Industrial average (DJI) faired the best for the day, declining only -0.39%. It was held up by strong performances in Energy, Finance and Industrials. The S&P 500 (SPX) dropped -1.31% and the Russell 2000 (RUT) declined -1.06%. The VIX volatility index rose +10.66%. Energy (XLE +1.47%) and Financials (XLF +0.78%) were the top sectors. Industrials (XLI +0.11%) was the only other sector with gains. Consumer Discretionary (XLY -2.35%) and Technology (XLK -2.52%) were bottom. Communications (XLC -1.43%) also lost more than the overall index. These sectors have heavy weight mega-cap players that are leading the way down for the indexes. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) advanced +0.22%. Yields for the US 30y, 10y and 2y all rose for the day, returning fears to investors' minds on the impact of higher interest rates to big tech and growth companies. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) prices both dropped for the day. Silver (SILVER) and Gold (GOLD) both declined. Crude Oil (CRUDEOIL1!) advanced despite inventories being higher than expected. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both declined. Copper gave back nearly all of its gains from yesterday. Aluminum declined just slightly compared to yesterday's huge gain. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.719. 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 back to the neutral level. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All of the big four mega-caps had losses for a second day. Alphabet (GOOGL) was the only of the big four above the 21d EMA, but moved below the line today. Microsoft (MSFT) also hit a significant level, moving below its 40d MA. Apple (AAPL) and Amazon (AMZN) have both been trading below the two levels for the past two weeks. Bank of America (BAC) and JP Morgan Chase (JPM) led the mega-caps with +2.50% and 1.93% gains. These big banks are expected to benefit from the higher bond yields driving higher interest rates. PayPal (PYPL), Netflix (NFLX), Tesla (TSLA) and Nvidia (NVDA) were at the bottom of the mega-cap list. The only growth stock tracked by this daily update to end the day in the positive was Alibaba with a +0.79% advance. The hardest hit were Fiverr (FVRR), Esty (ETSY), Grow Generation (GRWG) and Moderna (MRNA), all with greater than 10% losses for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Initial Jobless Games, Unit Labor Costs and Nonfarm Productivity data released tomorrow before market open will add to today's narrative around the slowing recovery. Either it will boost confidence or add to worries that maybe the economic recovery is slowing. Fed Chair Jerome Powell is scheduled to speak in early afternoon. Thursday's earnings reports will include Broadcom (AVGO), Costco (COST), Kroger (KR), Burlington Stores (BURL), Gap (GPS). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The five-day trend line is pointing to a +2.36% gain for tomorrow. The index is at the lower line of the five-day regression trend channel. The trend-lien from the 2/16 ATH is pointing to a +0.60% gain for tomorrow. If the one-day and two-day trends continue, then another -1.60% decline can be expected tomorrow. The index is sitting just a hair below 13,000 right now. If there is further downside, the 12,550 area also held in an early January dip. If it passes that area, the next support area is 12,250. There is a head and shoulders pattern on the Nasdaq chart. This pattern represents an attempt to move back to new highs that was rejected at a previous resistance point. Generally speaking, the height of the head is measured to determine the potential move downward that will occur as the price breaks below the neck line. That points to a previous support area around 11,800 - 12,000. That likely would not happen in a straight line. The reason to watch for it is not to overreact to bounces along the way. Wait for your market rules to kick in, such as regaining the 21d EMA on higher volume. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's tough to watch the market retreat and worry about where it might find the bottom. It's important for my daily homework to not try to predict the movements. Rather we look at the chart and set some expectations so we can act following the set of trading rules that work for me. You should also have a set of rules that work for your trading style and risk tolerance. The market followed thru with the expectation we set yesterday of lower. Today, the expectation is still set for sideways or lower. We'll look for an expectation breaker as a positive development, especially if the 13,000 area support holds. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
28
Daily Market Update for 3/2Trend lines drawn from the 2/16 ATH (11d), 2/24 (5d) and today 3/2 (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 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 -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview 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. The S&P 500 (SPX) and Dow Jones Industrial average (DJI) lost -0.81% and -0.46%. The Russell 2000 (RUT) turned in the worst performance of the day with a -1.93% decline. The VIX volatility index advanced +3.21% Materials (XLB) was the only gaining sector with a +0.56% advance. Also near the top of the sector list, but with a small loss, was Industrials (XLI) which declined -0.29%. Both sectors are likely to benefit from infrastructure projects planned to boost economic recovery. The bottom two sectors were also the only two to underperform the SPX. They were Consumer Discretionary (XLY -1.15%) and Technology (XLK -1.59%). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.25%. Yields on the 30y treasury bonds remained about the same while the 10y yields dropped. The 2y treasury bond yields remained flat. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) prices both dropped for the day. Silver (SILVER) and Gold (GOLD) both advanced for the day. Crude Oil (CRUDEOIL1!) advanced slightly after declining yesterday. Timber (WOOD) declined. Copper (COPPER1!) and Aluminum (ALI1!) both advanced considerably, moving up alongside the performance in the Materials sector. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio dropped slightly to 0.578 as investors moved back to a bullish level. 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 lower than the previous day, but still in the greed range. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All of the big four mega-caps had losses for the day. Alphabet (GOOGL) is the only of the four trading above the 21d EMA. Microsoft (MSFT) closed below the 21d EMA, but is still trading above the 50d MA. Apple (AAPL) and Amazon (AMZN) are trading below both lines and their 21d EMA is below the 50d MA as they continue to look bearish. AT&T (T), Coca-Cola (KO) were among a short list of mega-caps that had gains for the day. Tesla (TSLA) was at the bottom of the list -4.45%, down 20% from yesterday's intraday high. Square (SQ) and Dr Horton (DHI) were the only two growth stocks for the daily update with gains, advancing +4.65% and 1.47%. NIO (NIO) dropped -13.0% after a disappointing earnings release. Zoom Video (ZM) dropped -9.00% after gapping up and then giving up 15% in intraday selling. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There is an OPEC Meeting scheduled for tomorrow that will impact crude oil prices and likewise the energy sector. Crude Oil Inventories will also be released later in the day. The weekly stock numbers released today were higher than expected. Non-farm Employment data before market open will give an update on the labor market. Just after the market opens, Services and Non-Manufacturing purchasing data will give a heads up on activity levels for the two sectors. Wednesday's earnings reports include Snowflake (SNOW), Okta (OKTA), Marvell (MRVL), Splunk (SPLK), and Dollar Tree (DLTR). Check the companies in your portfolio for earnings reports so you are not surprised. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The five-day trend line is pointing to a +0.65% gain for tomorrow. The one-day trend line points toa -0.39% while the trend-line from the 2/16 ATH is pointing to a -1.52% loss. Both of those moves would put the index back below the 50d MA. If there is further downside, the index held the 13,000 area as support in the previous two weeks. The 12,550 area also held in an early January dip. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Looking at Monday and Tuesday, it seems like another choppy week is ahead. Today was dominated by selling, and with a thick red bodied candle, the expectation tomorrow has to be for Lower. Since there is support at the 50d MA, we can also expect a Sideways move. If there is a positive expectation breaker, then a gain on higher volume that takes the index back above the 21d EMA would provide confidence in a rally attempt. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
4
Daily Market Update for 3/1Trend lines drawn from the 2/16 ATH (10d), 2/23 (5d) and today 3/1 (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 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 -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview 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. The Russell 2000 (RUT) returned to the top of the index list with a +3.37% gain on optimism for stimulus to soon pass through congress. The S&P 500 (SPX) advanced +2.38%. The Dow Jones Industrial (DJI) gained +1.95%. Most importantly, all of the major indexes closed back above their 21d EMA, a key line for support and resistance. The VIX volatility index dropped -16.46% after gaining over 26% last week. All sectors gained for the day with Technology (XLK +3.22%) and Financials (XLF +3.13%) leading the list. Energy led for half the session before dropping back behind the other sectors. Consumer Staples (XLP +1.01%) and Real Estate (XLRE +0.11%) were the worst performing. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.14%. Yields on 30y treasury bonds gained while 10y yields stayed about even. 2y treasury yields dropped for a second day after spiking last Thursday. Prices on High Yields Corporate Bonds (HYG) rose for the day will Investment Grade (LQD) corporate bonds dropped slightly. Silver (SILVER) and Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose slightly to 0.823. 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 back to the Greed side but not yet Extreme Greed. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All of the big four mega-caps closed the day with gains. Unlike Friday's gains, today's gains look more bullish, albeit the volume is lower. Microsoft (MSFT) closed back above the 21d EMA, joining Alphabet (GOOGL) which had recovered the line on Friday. Apple (AAPL) and Amazon (AMZN) are still trading below both the 21d EMA and 50d MA. Tesla (TSLA) was the top mega-cap of the day with a 6.26% gain. Apple, PayPal (PYPL) and Exxon Mobile (XOM) round out the top four mega-caps. Most mega-caps gained for the day. All of the growth stocks I track for the daily update had gains for the day. Digital Turbine (APPS) was the big winner with a 14.74% gain, nearly climbing back to its all-time high. Grow Generation (GRWG), Draft Kings (DKNG) and Etsy (ETSY) were other growth stock with greater than 10% gains. Zoom Video (ZM) is up +8.60% after hours, providing a strong earnings beat and guidance for 2021 in their earnings update. NIO (NIO) and Lemonade (LMND) both were down after hours, disappointing investors with their earnings report. NIO had a greater loss than expected, despite strong revenue. Lemonade did not provide a strong outlook. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There is not a lot of economic news scheduled for Tuesday. FOMC Members Brainard and Daly are scheduled to speak in the afternoon. API Weekly Crude Oil Stock will be released after market close. Tuesday earnings releases will include Sea (SE), Target (TGT), Veeva Systems (VEEV), Ross Stores (ROST), and Kopin (KOPN). Check the companies in your portfolio for earnings reports so you are not surprised. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The one-day trend line points to a +4.39% gain for Tuesday. That's still well below the 14,000 area where possibly the index would find resistance. The five-day trend line points to a -1.06% loss. The index closed in the upper half of the five-day regression trend channel. A return to the center of the channel would put the index back in the middle of the 21d EMA and 50d MA. The trend-line from the 2/16 ATH is pointing to a -3.42% loss that puts the index back below the 50d MA and above the 13,000 support area. If there is further downside, the index held the 12,550 area in an early January dip. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The downward trend and indecisive Friday made the expectation for today of Sideways or Lower, but with the hopes for an expectation breaker. We got that expectation breaker today thanks to positive news over the weekend on the stimulus as well as signs that treasury bond yields had topped and would come back down. The US Dollar also strengthened considerably against other currencies, thanks to a positive outlook on the US economy and controlled inflation. Expectation for tomorrow is a continuation and move higher. If that doesn't happen, then we'll take another look for indications on why not. Another positive gain, but with more volume would be a confidence booster. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
1
US-MARKET CORRECTION NEARLY COMPLETEDuring CORRECTIONS I find it useful to create a CHART, where YOU can watch ALL the INDICES at once. This is my PERSONAL trading CHART, with no further educational explanations. IF you get it, YOU GET IT, if you don't, YOU DON'T. I really don't care. We use ELLIOTT WAVE theory to determine WHAT we are looking for, (i.e. TOP or BOTTOM). THEN technical MULTI-TIME-FRAME Indicator analysis To fine-tune the expected move in terms of PRICE and TIMING. Enter and exit TRADES in steps ... NEVER go all-in or all-out at ONCE.
OANDA:US2000USDLong
by wolffarchitecture
3
Market Week In Review - 2/22/2021 - 2/26/2021The 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, February 22, 2021 Facts: -2.46%, Volume lower, Closing range: 1%, Body: 80% Good: Nothing Bad: Gap down, thick red body, rejected trying to regain the 21d EMA Highs/Lows: Lower high, lower low Candle: Mostly red body under a short upper wick, nearly zero lower wick Advance/Decline: 0.46, 2 declining stocks for every advancing stock Indexes: SPX (-0.77%), DJI (+0.09%), RUT (-0.69%), VIX (+6.35%) Sectors: Energy (XLE +3.46%) Financials (XLF +0.39%) were top. Technology (XLK -2.21%), Consumer Discretionary (XLY -2.11%) Expectation: Lower It was a tough day for the Nasdaq, big tech, and growth stocks. On days like this, it is important to take a step back and view things from both sides. Avoid trying to make predictions. In this daily update let's look at what's going on more broadly, set an expectation for the index tomorrow and look for a follow-through or an expectation breaker. The Nasdaq closed the day with a -2.46% decline. The volume was lower, but the move was decisive with a thick red 80% body and a dismal 1% closing range. The candle's short upper wick and nearly invisible lower wick represent a day where the bears ruled on the Nasdaq. Over two stocks declined for every advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, February 23, 2021 Facts: -0.5%, Volume higher, Closing range: 88%, Body: 39% Good: Support at 13,000, successful retest at 50d MA, close in upper half of range Bad: Gap down and 50d MA violation to morning low Highs/Lows: Lower high, lower low Candle: Green body in upper half of candle with longer lower wick Advance/Decline: 0.31, 3 declining stocks for every advancing stock Indexes: SPX (+0.13%), DJI (+0.05%), RUT (-0.88%), VIX (-1.45%) Sectors: Energy (XLE +1.65%) and Utilities (XLU +0.83%) were top. Technology (XLK -0.28%) and Consumer Discretionary (XLY -0.66%) were bottom. Expectation: Sideways or Higher Nerves of steel. That's what it took to keep your eyes on the market today. The Nasdaq opened up with a gap down and pierced below the 50d MA to reach the intraday low within 10 minutes of open. It finally found support at the 13,000 area and made a climb back above the 50d MA. After a retest of that area, it was finally able to climb to an afternoon high before pulling back slightly into close. The index closed with a -0.5% loss which is better than where you might have expected to end up from the morning action. The volume was higher than the previous day and a long lower wick formed under a 39% green body that led to an 88% closing range. The candlestick almost resembles a bullish reversal hammer, but the body is a little thick for a perfect pattern. Still, the spirit of the hammer candlestick, that the market maybe found a bottom, is still represented in the intraday pattern. There were 3 declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, February 24, 2021 Facts: +0.99%, Volume lower, Closing range: 97%, Body: 62% Good: Another quick test at the 50d MA before climbing the rest of the day Bad: Not much Highs/Lows: Higher high, higher low Candle: Thick green body at top of the candle, longer lower wick Advance/Decline: 1.99, 2 advancing stocks for every declinging stock Indexes: SPX (+1.14%), DJI (+1.35%), RUT (+2.38%), VIX (-7.66%) Sectors: Energy (XLE +3.54%) and Financials (XLF +1.94%) were top. Consumer Staples (XLP -0.06%) and Utilities (XLU -1.17%) Expectation: Higher Thank you Jerome Powell. Fears of inflation gave way to more bullish sentiment as investors anticipate a new round of stimulus coming soon. The tech sector stopped it's multiple day decent and all of the major indexes turned in gains for the day. The Nasdaq ended the day with a +0.99% gain. The confirmation of yesterday's bullish reversal candle resulted in a higher high and a higher low after the index successfully tested the 50d MA in the morning. The 97% closing range and 62% green body sit above a longer lower wick that result from a brief morning dip. Two stocks advanced for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, February 25, 2021 Facts: -3.52%, Volume higher, Closing range: 10%, Body: 73% Good: Stayed above 13,000 Bad: Thick red body, low closing range, selling all day Highs/Lows: Lower high, Lower low Candle: Thick red body with an upper wick from a brief morning upward move Advance/Decline: Over eight declining stocks for every advancing stocks Indexes: SPX (-2.45%), DJI (-1.75%), RUT (-3.69%), VIX (+35.88%) Sectors: Utilities (XLU -0.90%) and Healthcare (XLB -1.00%)) were top. Expectation: Lower Caution turns to fear. There is not much positive to look at in today's indexes or the market indicators I use for the daily update. Nonetheless, it's best to look at both sides of action and set some expectations and a plan for tomorrow. The market opened with mixed economic news. Initial Jobless Claims and Durable Goods Orders were better than expected, but Q4 GDP and Pending Home Sales for January were disappointing. After a quick rise in the first minutes, the market started a sell-off that lasted the rest of the day. A brief rally as the afternoon started quickly stalled and reversed. The Nasdaq closed the day with a -3.52% loss. With higher volume and the breadth of the selling, it was clearly a distribution day. The 10% closing range left the index near it's late-in-the-day low with a 73% red body covering the candle. The only positive is that the index held support above the 13,000 area. Every stock declined except GME and AMC. Not really, but feels like that. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, February 26, 2021 Facts: +0.56%, Volume lower, Closing range: 49%, Body: 12% Good: Successful test of 13,000 again Bad: Lower high, lower low, indecisive spinning top candle, close below 50d MA Highs/Lows: Lower high, Lower low Candle: Thin red body in the middle of candle, long upper and lower wicks Advance/Decline: More than two declining stocks for every advancing stock Indexes: SPX (-0.48%), DJI (-1.50%), RUT (+0.04%), VIX (-3.25%) Sectors: Technology (XLK +0.53%) and Consumer Discretionary (XLY +0.42%) were top. Energy (XLE -2.37%) and Financials (XLF -1.91%) were bottom. Expectation: Sideways or Lower A week dominated by selling ended with a day of indecision. Investor fears of inflation were lifted a bit by economic data that showed inflation might not be as accelerated as thought. Consumer sentiment numbers rose. Personal spending was lower than expected. That resulted in rising treasury bond yields to back off a bit and the US Dollar to strengthen. The Nasdaq closed the day with a +0.56% gain on lower volume. The thin 12% body is in the middle of a candle with longer upper and lower wicks. The closing range very near to the open and in the center of the candle at 49% shows as a spinning top candle. The candle is a sign of indecision as both the bulls and the bears had moments throughout the trading session without a winner. There were more than two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) It started on Monday with a gap down to open the week, a brief climb in the morning, and then a sell-off that would set the tone for the rest of the week. For the broader market, it looked more like a rotation that just hit the tech-heavy Nasdaq and mega-caps while the rest of the market was OK. The small-cap Russell 2000 barely dipped for the day. Tuesday brought the hammer. Another gap down and a huge sell-off in the morning that took the Nasdaq down 4% before finding support at the 13,000 level and climbing back above the 50d moving average for the close. It seemed the market may have found a local bottom for this pullback. Although Tuesday was another day of losses for big tech, there were other positives. The Dow Jones Industrial average hit a new all-time high. Eight out of eleven SPDR sectors ended the day with gains. Despite those positives, three stocks declined for every advancing stock on the Nasdaq. Because of the hammer candlestick on Tuesday, the expectation was for a move higher on Wednesday to confirm the upside reversal. That expectation was fulfilled with a positive gain. Comments from Fed Chairman Jerome Powell seemed to calm fears of inflation and rising bond yields. Energy and Financials sectors moved back to the top of the sector list. Two stocks advanced for every declining stock. The VIX volatility index returned to normal levels. Corporate bond prices rose. Commodities advanced. Everything looked bullish. So what happened? Was the repeated increase in volatility to stocks like GME and AMC enough to spook the market? Could it be the bullish rise in the index was driven by overly bullish investors causing a dip of the put/call level to 0.5? The short rally day did not have the volume to give it strength and futures faded into Thursday's open. Perhaps the fed's reassurances were not enough, yields continued to rise and scare investors from the potential impact of higher interest rates. Thursday turned out to be a crushing session where every sector declined, every cap segment lost and it seemed like every stock except GME and AMC were sold off. There were over eight declining stocks for every advancing stock. Treasury bond yields, especially short term, spiked, causing more selling among equities. Corporate bonds sold off sharply as investors considered higher possibility of defaults. The mega-caps busted. Growth stocks reversed. Dogs and cats started living together. It was clearly a distribution day. There was one positive to Thursday. 13,000. That area was tested three times this week and held. Friday brought another test of the 13,000 but then a turnaround for the Nasdaq lifted the index into the afternoon. Although treasury bond yields came back down a bit, the US dollar strengthened and commodity prices dipped. Gains were isolated to Technology, Communications, and Consumer Discretionary. After hitting the intraday highs twice, investors sold in the final few minutes of the day to have the index return close to its open for the session. That created an indecisive spinning top candle for Friday and left us wondering over the weekend what will come next. The Nasdaq closed the week down -4.92%. Volume was lower than the previous week in our indicator, but other data sources show volume as higher for the week. The closing range of 25% marks a second week in a row where the closing range is below 40%. The Nasdaq remained within a parallel channel drawn from the March 2020 bottom. The last time the index tested the bottom channel line was the last week of October. The following week, the index recovered with a 9% gain. So we'll mark that as a level to watch later in this review. The S&P 500 (SPX) declined -2.45% for the week. The Dow Jones Industrial average (DJI) declined -1.78%. The Russell 2000 (RUT) lost -2.90%. The VIX volatility index closed the week with a +26.76% gain, but still well below highs of January and October. It's a good week to take a close look at the sectors and see how the market moved around during pullbacks in the major indexes. Energy ( XLE ) and Financials ( XLF ) were joined at the hip, finding themselves at the top of the sector list on Monday and Wednesday and at the bottom of the list on Friday. However the days spent at the top were enough to allow them to end the week in 1st and 2nd place. However, Energy was the only sector that could keep gains to end the week in the positive. Consumer Discretionary ( XLY ) and Technology ( XLK ) took a beating throughout the week as investors moved away from these sectors fearing the impact of inflation and higher interest rates. Utilities ( XLU ) is usually in play when investors are nervous. It showed up at the top of the list on Tuesday and Thursday, but ended the week at the bottom of the list. The cyclical stocks Industrials ( XLI ) and Materials ( XLB ) outperformed the SPX for a second week. Along with Energy and Financials, these cyclical sectors were top performers for the whole month of February. US 30y and 10y Treasury Bond yields continued to rise and widen the gap with shorter term treasury bonds. The rising bond yields are a big part of what is spooking investors who are concerned about the impact on corporate costs to service debt. As yields continue to rise, investors will price it into the market indiscriminately by avoiding specific sectors. High Yields Corporate Bonds (HYG) and Investment Grade (LQD) corporate bonds both declined for another week. The yield spread widened between high yield corporate bonds and short term treasury bonds. The US Dollar (DXY) advanced +0.57% for the week. Most of that gain came on Friday after pricing data showed inflation may not be as bad as expected. Also consumer sentiment data was stronger than expected. Investors sold riskier currencies and bought the US Dollar as a safer investment. Currencies such as the Australian Dollar and the Swiss Franc, that were outperforming the dollar in 2020, sold off sharply at the end of the week. That's an interesting change to keep an eye on for the coming weeks. Silver (SILVER) and Gold (GOLD) both declined for the week. Crude Oil Futures (CRUDEOIL1!) continued the rise and is now at its highest price since November 2018. Timber (WOOD) declined for the week. Copper (COPPER1!) and Aluminum (ALI1!) both gained for the week, despite having a few days of showing weakness. Some of the impact on commodity prices is due to the sudden strengthening of the US dollar. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps All four big mega-caps declined for the week. Apple (AAPL) and Amazon (AMZN) had the biggest declines with losses of -6.63% and -4.83%, respectively. Microsoft (MSFT) and Alphabet (GOOGL) did a little better with declines of -3.56% and -3.20%. Referring to the chart above you can see that Microsoft and Alphabet are both still above their 10w moving average and outperforming the Nasdaq (relative candle indicator at bottom of each chart). Apple and Amazon are trading below their 10w moving average and Amazon is just above the 40w moving average. Both are underperforming the broader index. While the big four mega-caps and growth stocks are struggling the past few weeks, what segments are doing well? Many of the stocks that were down in 2020 due to the pandemic are performing well relative to the market now. That confirms the despite the fears about higher yields driving interest rates higher, investors are still confident that the economy is recovering and that recovery will bring relief to industries hit hard during the pandemic. That doesn't mean to rush out and buy these recovery stocks. We still need the overall market to perform well. If we are entering a more severe correction, there are always industries and stocks that move down last. In a correction, everything eventually gets hit. However, if we find more support at 13k and the market can stabilize then finding these opportunities could be profitable. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.810, showing a move to more caution among investors. The indicator hit near 0.5 earlier in the week as investors became overly bullish just before Thursday's sell-off. Even as the market sold off on Thursday, investors poured money into the leveraged TQQQ ETF. It was the top ETF inflow for the day. 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. The CNN Fear & Greed index moved into the Fear side for the first time since January. Money managers are at a 85 leveraged level as measured by the NAAIM Exposure Index. That's down from being over 100 for the past two weeks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Manufacturing data will be released on Monday as the market opens, providing a view into economic activity in the sector. Weekly Crude Oil Stock numbers will be released on Tuesday after market close. Wednesday's economic news will include non-manufacturing economic numbers. Employment data will be released before the market opens. Crude Oil Inventory data will be released in the afternoon. Thursday will bring Initial Jobless Claims, Nonfarm Productivity, and Unit Labor Costs, all providing a view on the recovering labor market and the impact on business productivity. Finally the week will finish with more employment data on Friday as well as Import and Export numbers. Earnings releases next week will be focused on small, mid and large cap segments with the concentration of reports with smaller companies. There are also a large number retail companies reporting. Zoom Video (ZM) will kick things off on Monday along with MercadoLibre (MELI), Nio (NIO), and Lemonade (LMND). Tuesday will include Sea (SE), Target (TGT), Veeva Systems (VEEV), Ross Stores (ROST), and Kopin (KOPN). Wednesday's reports include Snowflake (SNOW), Okta (OKTA), Marvell (MRVL), Splunk (SPLK), Dollar Tree (DLTR). Thursday will include Broadcom (AVGO), Costco (COST), Kroger (KR), Burlington Stores (BURL), Gap (GPS). Big Lots (BIG) will report on Friday. Be sure to check for scheduled earnings reports for stocks in your own portfolio. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Over the weekend, we already have two great pieces of news to be bullish about. The stimulus bill made a big step forward by passing in the House. Now it's up to the senate to vote and pass it into law with Biden's signature. In addition, the US authorized Johnson & Johnson's single-dose vaccine which will enable millions more American's to receive shots in the coming weeks. Consumer confidence numbers on Friday showed Americans are starting to have a more positive outlook. As confidence grows, that could unleash record amounts of household savings into the economy. Although that may drive inflation up a bit, the increase in spending will be welcome for sectors hard hit by the 2020 pandemic. Those sectors will include airlines, travel and leisure, hotels and energy. Treasury bond yields already started to back off a bit on Friday after data showed inflation might not be as worrisome as previously thought. If the US Dollar continues to strengthen, that could bring yields down even further as global investment starts to feel better about sticking money into USD based bonds. Having the put/call ratio rise above 0.7 and the CNN Fear & Greed index move to fear could be a good sign of a tempering of the overly bullish sentiment. That could bring less volatility to the market and make near term gains build on a more solid base. The Nasdaq tested the 13,000 level and successfully stayed above the line three times in the past week. The strength of that support can be a base for getting back to the uptrend and more bullish rally ahead. Investor support showed up in the form of ETF inflows for SPY, TQQQ, IWM, QQQ being far higher than outflows. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side This was the worst setback in the market since the end of October which saw an almost 6% decline in the Nasdaq. The indecision on Friday provided no assurance that the pullback was over. Although 13,000 is a clear support area now, a breakdown below that level could send the index even further down in the coming week. The passing of the stimulus bill maybe be great for the economy and still send the markets into a plunge. As stimulus checks go out, the increase in demand for consumer products might just send inflation to the levels that investors have been worried about. That will negatively impact many of the companies that have an overweighted influence on the indexes. As the indexes come down, eventually so does all of the market. Apple and Amazon are trending down, trading below their 10w moving average and threatening the 40w moving average lines. As these mega-caps weigh on the indexes, it will continue to sour investor sentiment. The frothy exuberance of investors was no more apparent than when the leveraged TQQQ ETF showed up at the top of the ETF inflows list for Thursday as the market was dipping. Buy the Dip is the mantra of the retail investor and that mantra just might come back to haunt us in the weeks to come. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch This section can be a bit repetitive during multiple weeks of rally. This week, it becomes one of the more important sections as we watch key levels for a market direction. First on the positive side: The first step is for the index to close above the 50d MA which is at 13,299.28 as of Friday's close. Next will be to close above the 21d EMA at 13,578.90. Hopefully those two moves will be on higher volume to further confirm the progress. After getting above the moving average lines, creating a higher weekly high will be the next sign of progress. This past week's high was on Monday at 13,757.06. 14,000 is a possible resistance area so look for the index to get above and stay above this area. A rejection below this would start to form a head and shoulders pattern that indicates a failed rally attempt by bulls. Finally, the all-time high from 2/16 of 14,175.12 will be the next test. That would be a weekly advance of 7.45% which is well within reason if that market can find momentum. On the downside, there are several key levels to raise caution flags: The lower line of the weekly parallel channel, drawn from the March 2020 bottom, is pointing to 13,022. Violating that lower line could signal further weakness in the long term rally. The low of this past week is 13,003.98. Stay above this level to start a new uptrend. Next is the 13,000 support area that has held up very well the past few weeks. It also held the index in January before making further gains in February. At 12,757.61, the Nasdaq is officially in correction by the 10% standard. Several possible areas of support at 12,550, 12,250, and 12,000. The 200d MA moved above is about 17% below the index at 11,407.58. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up That's two weeks in a row, where the market ended Friday with indecision. This week the market followed thru with a gap down and sell-off on Monday that continued for the rest of the week. There's a possibility we found the bottom at 13,000 and the market could make an upside reversal from here. There are no guarantees. As investors respond to increasing bond yields, positive and negative news events, it all can cause more volatility. Influences on the market will have investors searching for assets that can safely produce returns or at least protect against further losses. That brings us to weekend homework. I'll repeat it from Friday's daily update. Take a close look at positions in your portfolio. How are each performing in the context of the pullback? Which ones are acting relatively well and maybe you are willing to take a bit further draw down to protect the positions? Which ones are not acting well and should be trimmed or sold outright? If the market does reverse and move up next week, what stocks should be in your watch list? What's your plan for timing and starting those positions? Where should you add to existing positions at the dip? And most importantly, where will you set stops in order to protect against a surprise to the downside. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
10
Daily Market Update for 2/26Trend lines drawn from the 2/16 ATH (9d), 2/22 (5d) and today 2/26 (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, February 26, 2021 Facts: +0.56%, Volume lower, Closing range: 49%, Body: 12% Good: Successful test of 13,000 again Bad: Lower high, lower low, indecisive spinning top candle, close below 50d MA Highs/Lows: Lower high, Lower low Candle: Thin red body in the middle of candle, long upper and lower wicks Advance/Decline: More than two declining stocks for every advancing stock Indexes: SPX (-0.48%), DJI (-1.50%), RUT (+0.04%), VIX (-3.25%) Sectors: Technology (XLK +0.53%) and Consumer Discretionary (XLY +0.42%) were top. Energy (XLE -2.37%) and Financials (XLF -1.91%) were bottom. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview A week dominated by selling ended with a day of indecision. Investor fears of inflation were lifted a bit by economic data that showed inflation might not be as accelerated as thought. Consumer sentiment numbers rose. Personal spending was lower than expected. That resulted in rising treasury bond yields to back off a bit and the US Dollar to strengthen. The Nasdaq closed the day with a +0.56% gain on lower volume. The thin 12% body is in the middle of a candle with longer upper and lower wicks. The closing range very near to the open and in the center of the candle at 49% shows as a spinning top candle. The candle is a sign of indecision as both the bulls and the bears had moments throughout the trading session without a winner. There were more than two declining stocks for every advancing stock. The Russell 2000 (RUT) was the only other major index to close with a gain, and it was small at just +0.04%. The S&P 500 (SPX) declined -0.48% while the Dow Jones Industrial average (DJI) declined -1.50%. The VIX volatility index declined -3.25% but is still at an elevated level. The sector list shows rotation back into some of the sectors that suffered earlier in the week. Technology (XLK) and Consumer Discretionary (XLY) moved back to the top, after living at the bottom most of the week. They gained +0.53% and +0.42% respectively. Energy (XLE) and Financials (XLF) moved to the bottom of the list. It's not necessary for them to lead in a rally, but it doesn't help a bull case having them at the bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained a surprise +0.88% on a lower inflation outlook. Yields on 30y, 10y and 2y treasury bonds all dropped for the day. The 2y yield dropped %28 after spiking %41 yesterday. The downside reversal in treasury bond yields is a welcome change for investors of big tech and growth stocks. The lower treasury bond yields did not help High Yield (HYG) corporate bonds. Prices on these bonds continued to fall while Investment Grade (LQD) corporate bond prices gained. The signal is still caution as investors will continue to watch the bond market closer as next week unfolds. Silver (SILVER) and Gold (GOLD) declined. Gold declined over 2%, partially driven by the strengthening dollar. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) declined. Copper (COPPER1!) and Aluminum (ALI1!) both declined. This is a character change from the bullish outlook the commodities were signaling the past few weeks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.810 as fear starts to work its way into the market. 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 more toward fear and is exactly neutral at Friday's close. The weekly NAAIM exposure index declined to 85 as money managers reduced positions. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All of the big four mega-caps closed the day with gains, but none of them were particularly bullish days, giving up gains as the market came to a close. Apple (AAPL) and Alphabet (GOOGL) gained +0.22% and +0.30%. Microsoft (MSFT) and Amazon (AMZN) did a little better with +1.17% and +1.48% gains, both showing indecisive sessions. Only Alphabet is trading above the 21d EMA and 50d MA. Microsoft is stuck in the middle of the two key moving average lines. Semiconductors made a bit of a comeback with Nvidia (NVDA) leading the mega-cap list with a +3.06% gain. PayPal (PYPL) was second, advancing +2.33%. Bank of America (BAC) and JPMorgan Chase (JPM) led the Financials sector lower with -3.40% and -2.65% losses. The market was pricing in higher yields having a positive impact on big banks, but now is repricing with a new outlook. Digital Turbine (APPS) and Etsy (ETSY) led growth stocks higher with 14.08% and +11.48% gains. AirBnb (ABNB) also gained +13.34%. A newer growth stock, Fisker (FSR), got a lot of attention this week and rose +32.07% in today's session. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Monday will start with Manufacturing data before market opens that provides a lens on how much activity is being generated by greater demand for goods. It will be another week of must-watch earnings reports. Monday will kick off with Zoom Video (ZM), MercadoLibre (MELI), Nio (NIO), Lemonade (LMND). Watch for how the market reacts to positive news from any of these reports. A negative reaction to a positive report can be a big signal of investor sentiment in a choppy market. Also check the companies in your portfolio for earnings reports so you are not surprised. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The one-day trend line points to a +1.29% gain for Monday that would put the index back above the 50d MA. The five-day trend line points to another -0.43% loss for the start of next week. The longer trend-line from the 2/16 all-time high points to a -1.02% declined for Monday. That would be right above the 13,000 support area. If there is further downside, the index held the 12,550 area in an early January dip. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Happy we made it to the Weekend? You are not alone. The expectation for today was to go lower and so a bit of a sideways move that resulted in a small gain for the Nasdaq is welcome. However, the market gave no indication that confidence in the rally had been restored. It was an indecisive day in a downtrend that could end here, or continue. That creates some weekend homework. Take a close look at positions in your portfolio. How are each performing in the context of the pullback? Which ones are acting relatively well and maybe you are willing to take a bit further draw down to protect the positions? Which ones are not acting well and should be trimmed or sold outright? If the market does reverse and move up next week, what stocks should be in your watch list? What's your plan for timing and starting those positions? Where should you add to existing positions at the dip? Most of all, there are plenty of signals to keep a cautious approach to the market. Expectation is set for sideways or lower for Monday. Let's hope for an expectation breaker! Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
11
Daily Market Update for 2/25Trend lines drawn from the 2/16 ATH (8d), 2/19 (5d) and today 2/25 (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, February 25, 2021 Facts: -3.52%, Volume higher, Closing range: 10%, Body: 73% Good: Stayed above 13,000 Bad: Thick red body, low closing range, selling all day Highs/Lows: Lower high, Lower low Candle: Thick red body with an upper wick from a brief morning upward move Advance/Decline: Over eight declining stocks for every advancing stocks Indexes: SPX (-2.45%), DJI (-1.75%), RUT (-3.69%), VIX (+35.88%) Sectors: Utilities (XLU -0.90%) and Healthcare (XLB -1.00%)) were top. Consumer Staples (XLP -0.06%) and Utilities (XLU -1.17%) Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Caution turns to fear. There is not much positive to look at in today's indexes or the market indicators I use for the daily update. Nonetheless, it's best to look at both sides of action and set some expectations and a plan for tomorrow. The market opened with mixed economic news. Initial Jobless Claims and Durable Goods Orders were better than expected, but Q4 GDP and Pending Home Sales for January were disappointing. After a quick rise in the first minutes, the market started a sell-off that lasted the rest of the day. A brief rally as the afternoon started quickly stalled and reversed. The Nasdaq closed the day with a -3.52% loss. With higher volume and the breadth of the selling, it was clearly a distribution day. The 10% closing range left the index near it's late-in-the-day low with a 73% red body covering the candle. The only positive is that the index held support above the 13,000 area. Every stock declined except GME and AMC. Not really, but feels like that. The Russell 2000 (RUT) was the worst performer of the day, despite the possibility of the stimulus that would help smaller businesses. The RUT declined -3.69%. The S&P 500 (SPX) declined -2.45% and the Dow Jones Industrial average (DJI) declined -1.75%. The VIX volatility index rose +35.88%. The sectors are also telling of the broad sell-off. Every sector declined for the day. The top of the sector list is filled with the defensive plays of Utilities (XLU -0.90%), Healthcare (-1.00%) and Consumer Staples (-1.09%). Technology (XLK -3.50%) and Consumer Discretionary (XLY -3.72%) were at the bottom of the list. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.05%. Yields on 30y, 20y and 10y treasury bonds all rose for the day. The US02Y yield rose %41 after investors showed very little interest in the 7y notes auction. The rising yields will eventually impact interest rates on loans, making money more expensive and eating away at the bottom line for debt-heavy companies and sectors. Both High Yield (HYG) corporate bonds and Investor Grade (LQD) corporate bonds sold off sharply. The spread between corporate bond and treasury bond yields remained about the same. Silver (SILVER) and Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) advanced. 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 0.624. 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 remained about the same. The weekly NAAIM exposure index declined to 85 as money managers reduced positions. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (APPL), Microsoft (MSFT), Amazon (AMZN) and Alphabet (GOOGL) all had significant declines for the day. All four closed below the 21d EMA lines, while Apple and Amazon are trading below their 50d MA. Amazon's 21d EMA is about to cross under the 50d MA. Only a handful of mega-caps closed with gains and those were just a fraction of a point. Taiwan Semiconductor (TSM) and Nvidia (NVDA) were at the bottom of the list, leading semiconductors lower. Tesla declined -8.06%. Twitter (TWTR) and Moderna (MRNA) were the only growth stocks in my list with gains, advancing +3.71% and +2.48%. Ehang Holdings (EH) continued its recent volatility with a -15.44% decline. NIO (NIO), Grow Generation (GRWG), Palantir (PLTR) were other big losers, all declined over 9%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead The economic news to watch for before market open on Friday includes Consumer Price Index data that is a key measure of inflation. Inflation is on every investors mind this past two weeks. Also being released before market open will be Goods Trade Balance, Personal Spending, and Retail Inventories. Consumer Expectations and Sentiment data will be released after market open. The US Federal Budget will be released in the afternoon. Fridays earnings releases will include DraftKings (DKNG), and Cinemark (CNK). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The seven-day trend lien from the 2/16 ATH is pointing to a +0.26% gain to bring the index back to the middle of the regression trend channel. The five-day trend line points to another -0.32% loss for tomorrow. If today's sell-off continues into Friday, the one-day trend line is pointing at another -3.33% decline, putting the index below the 13,000 support area. If there is further downside, the index held the 12,550 area in an early January dip. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's another day to remind the reader that the expectation set each day is not a prediction. It's the direction we are watching for the index to go. When it breaks the expectation, it's time to look closely at why the change. Sometimes it's just a simple pullback. Today it was a clear distribution day as investors sold nearly every sector and cap segment. The caution that has shown up several times the past few weeks, turned to fear, as investors either moved to defensive plays or exited the market. Hopefully you already have your risk management in play with either stop losses or reduced position sizes. There's still room for an upside reversal as we hit key support areas, but it's reasonable to expect a move lower in the short term. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
5
Daily Market Update for 2/24Trend lines drawn from the 2/16 ATH (7d), 2/18 (5d) and today 2/24 (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, February 24, 2021 Facts: +0.99%, Volume lower, Closing range: 97%, Body: 62% Good: Another quick test at the 50d MA before climbing the rest of the day Bad: Not much Highs/Lows: Higher high, higher low Candle: Thick green body at top of the candle, longer lower wick Advance/Decline: 1.99, 2 advancing stocks for every declinging stock Indexes: SPX (+1.14%), DJI (+1.35%), RUT (+2.38%), VIX (-7.66%) Sectors: Energy (XLE +3.54%) and Financials (XLF +1.94%) were top. Consumer Staples (XLP -0.06%) and Utilities (XLU -1.17%) Expectation: Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Thank you Jerome Powell. Fears of inflation gave way to more bullish sentiment as investors anticipate a new round of stimulus coming soon. The tech sector stopped it's multiple day decent and all of the major indexes turned in gains for the day. The Nasdaq ended the day with a +0.99% gain. The confirmation of yesterday's bullish reversal candle resulted in a higher high and a higher low after the index successfully tested the 50d MA in the morning. The 97% closing range and 62% green body sit above a longer lower wick that result from a brief morning dip. Two stocks advanced for every declining stock. All of the major indexes had gains with very bullish candlesticks. The Russell 2000 (RUT) was the top sector with a +2.38% gain. The S&P 500 gained +1.14% while the Dow Jones Industrial average (DJI) gained +1.35%. The VIX volatility index declined -7.66%. The top sectors were Energy (XLE) and Financials (XLF) with +3.54% and +1.94% gains. The welcome change in the sector list is to see Technology (XLK) with a positive day, gaining +1.53% and outperforming the broader SPX index. Also reassuring is to see the defensive play sector Utilities (XLU) move back to the bottom of the list with a -1.17% loss. The only other losing sector was Consumer Staples (XLP) with a -0.06% decline. Industrials (XLI) got a boost from higher than expected New Home sales, advancing +1.89%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.12%. Yields on 30y, 20y and 10y treasury bonds all rose for the day. Investors have been negatively reacting to the rising yields because of possible addition of an interest rate hike would depress big tech and growth stocks. However Jerome Powell's comments during congressional testimony have seemed to ease those fears. Both High Yield (HYG) corporate bonds and Investor Grade (LQD) corporate bonds prices advanced for the day. Silver (SILVER) advanced while Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) advanced despite Crude Oil inventories being higher than expected. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both advanced. Bullish! -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio dipped all the way to 0.503, an overly bullish level. 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 more to the greedy side but still not in the extreme greed range. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Microsoft (MSFT) and Alphabet (GOOGL) both advanced for the day while Apple (AAPL) and Amazon (AMZN) declined. Apple and Amazon are both trading below the 21d EMA and 50d MA. Apple's 21d EMA crossed under the 50d MA which is viewed as a downtrend signal. Microsoft is trading under the 21d EMA but above the 50d MA. The continuation of a rally will be much easier of these big four mega-caps are all participating. Tesla (TSLA) reversed more than two weeks of declines with a +6.18% gain today. Mastercard (MA) and Visa (V) were also top mega-cap gainers with +4.82% and +3.45% gains. The majority of mega-caps ended the day with gains. Retailers Walmart (WMT) and Home Depot (HD) were at the bottom of the mega-cap list with losses. Growth stocks had a great day. Upwork (UPWK) soared gaining over 20% on smashing earnings expectations, but gave up most of the gain to end the day with a +3.45% advance. Ehang Holdings (EH), SUMO logic (SUMO) and Enphase (ENPH) were big gainers for the day. Not all growth stocks were winners. Digital Turbine (APPS), Chewy (CHWY) and Square (SQ) were at the bottom. Square gave up -7.51% after investors reacted negatively to their cryptocurrency investments and returns for the business only amounting to 2% margins. GameStop (GME) sucked the oxygen out of the room again with a 103.94% gain and continues to move up afterhours, now over 90%. The casino is still open. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Durable Goods Orders, GDP for Q4 and Initial Jobless Claims will all be released tomorrow before market open. Pending Home Sales will be released after the opening bell. Several FOMC Members will speak tomorrow throughout the day. There comments can help reaffirm Jerome Powell's testimony. Thursday will add to the tsunami of earnings reports this week with Salescore.com (CRM), Anheuser Busch (BUD), MercadoLibre (MELI), Moderna (MRNA), Autodesk (ADSK), Workday (WDAY), DoorDask (DASK), Vmware (VMW), Dell (DELL), Zscaler (ZS), Wayfair (W), Etsy (ETSY), Plug Power (PLUG), Farfetch (FTCH), Vipshop (VIPS), Novocure (NVCR), Beyond Meat (BYND), the list just keeps going. Be sure to check the companies in your portfolio for upcoming earnings reports. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance I removed the long-term trend line I've been using since the 10/30 bottom. It no longer seems relevant as a regression trend channel. I added a trend line from the 2/16 high. 2/23 will become a low if the index continues higher this week. The one-day trend line is pointing to a +1.86% gain that would get the index back above the 21d EMA. The trend from the 2/26 all-time high and the five-day trend line point to a -2.58% decline. That would rest the index just below the 50d moving average. If there is further downside, the 13,000 level has proven to be a support area. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's good to see the Nasdaq, and the market, have a bullish day after yesterday's dip below the 50d MA and test of the 13,000 support area. With a hammer candlestick yesterday, followed by a positive candle today, we can be optimistic about further upside. However, nothing is guaranteed until it's confirmed by the market. The expectation for tomorrow is set for higher. If we have an expectation breaker, that will mean a closer look to see what now is bothering investors. Until then, remain cautious but optimistic! Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
8
Daily Market Update for 2/23Trend lines drawn from the 10/30 bottom (78d), 2/16 top (6d), 2/17 (5d) and today 2/23 (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, February 23, 2021 Facts: -0.5%, Volume higher, Closing range: 88%, Body: 39% Good: Support at 13,000, successful retest at 50d MA, close in upper half of range Bad: Gap down and 50d MA violation to morning low Highs/Lows: Lower high, lower low Candle: Green body in upper half of candle with longer lower wick Advance/Decline: 0.31, 3 declining stocks for every advancing stock Indexes: SPX (+0.13%), DJI (+0.05%), RUT (-0.88%), VIX (-1.45%) Sectors: Energy (XLE +1.65%) and Utilities (XLU +0.83%) were top. Technology (XLK -0.28%) and Consumer Discretionary (XLY -0.66%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Nerves of steel. That's what it took to keep your eyes on the market today. The Nasdaq opened up with a gap down and pierced below the 50d MA to reach the intraday low within 10 minutes of open. It finally found support at the 13,000 area and made a climb back above the 50d MA. After a retest of that area, it was finally able to climb to an afternoon high before pulling back slightly into close. The index closed with a -0.5% loss which is better than where you might have expected to end up from the morning action. The volume was higher than the previous day and a long lower wick formed under a 39% green body that led to an 88% closing range. The candlestick almost resembles a bullish reversal hammer, but the body is a little thick for a perfect pattern. Still, the spirit of the hammer candlestick, that the market maybe found a bottom, is still represented in the intraday pattern. There were 3 declining stocks for every advancing stock. The S&P 500 closed in the positive with a +0.13% gain after testing it's 50d MA and forming a long lower shadow candle. You might not believe it, so go look, but the Dow Jones Industrial average (DHI) set a new all-time high before settling back for a +0.05% gain at close. The Russell 2000 (RUT) closed with a -0.88% decline. The VIX volatility index ended the day with a -1.45% decline. The sectors followed a similar pattern to the previous day with one notable change. Utilities (XLU) moved from the bottom to the second place spot with +0.83% gain, behind Energy (XLE) which led the sector list with a +1.65% advance. The cyclical stocks all had gains again and 8 out of the 11 SPDR sector ETFs ended the day with gains. Technology (XLK -0.66%) and Consumer Discretionary (XLY -0.28%) were at the bottom for another day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) advanced +0.18%. Yields on the 30y treasury bond rose just +0.17% while 10y treasury bond yields dropped. 2y treasury bond yields rose, tightening the spread between long term and short term bonds. Both High Yield (HYG) corporate bonds and Investor Grade (LQD) corporate bonds prices advanced for the day. The spread been corporate bonds and treasury bonds remains about even over the past few weeks. Silver (SILVER) and Gold (GOLD) both declined. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) declined. Copper (COPPER1!) and Aluminum (ALI1!) both declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.632. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Amazon (AMZN) and Alphabet (GOOGL) were able to pull out gains after taking dips early in the day. Amazon is trading below its 21d EMA and 50d MA. Alphabet dipped below its 21d EMA but closed about even with the key indicator line. Apple (AAPL) and Microsoft (MSFT) both declined for the day. Apple (AAPL) is below both moving average lines while Microsoft is below the 21d EMA but above the 50d MA. The rest of the mega-caps did a little better than yesterday. Mastercard (MA) topped the list with a +2.87% gain. Walt Disney (DIS), Netflix (NFLX) and Facebook (FB) round out the top four mega-cap gainers. At the bottom of the list was Taiwan Semiconductor (TSM), PayPal (PYPL) and Home Depot (HD), all dropping more than 3%. Growth stocks also did a little better. SNAP (SNAP) rose 11.10% after a wild session that had a trading range of 30%. Digital Turbine (APPS), Pinterest (PINS) and Twitter (TWTR) all did well as the communication stocks seemed to get a boost today. UP Fintech (TIGR) had another day of declines. Magnite (MGNI) was another popular growth stock with a big decline. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Wednesday will bring New Home Sales data for January as well as an update on Crude Oil Inventories. Those are schedule for aftermarket open. In addition, Fed Chair Jerome Powell will continue his testimony before congress. Earnings reports will include Nvidia (NVDA), Lowe's (LOW), TJX (TJX), Teladoc (TDOC), Magnite (MGNI) and many others. Be sure to check the companies in your portfolio for upcoming earnings reports. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index is in the bottom half of the long-term regression trend channel. The trend lines I draw are the mid-point of the channels. The long-term trend line from the 10/30 bottom points to a +4.92% gain. That seems unlikely, and would need to push past resistance at the 21d EMA and the 14,000 support/resistance area. The one-day trend line is pointing to a +1.79% advance. The five-day and six-day trend line points to decline of -1.43%. That would rest the index right above the 50d moving average. The index violated the 50d MA line today, but then recovered. After a morning high, it retested the 50d MA and found support. So it is reasonable to expect support here again. The 13,000 level also seems provided support for the index today. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The market followed-thru with yesterday's expectation for lower today. It moved lower, found support at 13,000 and then bounced off to regain ground before close. The hammer style candle-stick appears to mark a local bottom but the market will have to confirm that tomorrow. There was certainly some fear in the market as it opened in the morning. But those fears were put aside as Jerome Powell insisted that we not worry about inflation and the fed monetary policy would remain the same. Cyclical stocks remain the leaders. The result is another day of rotation, although it may feel like a correction. There is reason to be cautious, but no reason to be fearful. The expectation is set for sideways or higher based on the candle. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
8
Daily Market Update for 2/22Trend lines drawn from the 10/30 bottom (76d), 2/12 (5d) and today 2/19 (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, February 19, 2021 Facts: -2.46%, Volume lower, Closing range: 1%, Body: 80% Good: Nothing Bad: Gap down, thick red body, rejected trying to regain the 21d EMA Highs/Lows: Lower high, lower low Candle: Mostly red body under a short upper wick, nearly zero lower wick Advance/Decline: 0.46, 2 declining stocks for every advancing stock Indexes: SPX (-0.77%), DJI (+0.09%), RUT (-0.69%), VIX (+6.35%) Sectors: Energy (XLE +3.46%) Financials (XLF +0.39%) were top. Technology (XLK -2.21%), Consumer Discretionary (XLY -2.11%) Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview It was a tough day for the Nasdaq, big tech, and growth stocks. On days like this, it is important to take a step back and view things from both sides. Avoid trying to make predictions. In this daily update let's look at what's going on more broadly, set an expectation for the index tomorrow and look for a follow-through or an expectation breaker. The Nasdaq closed the day with a -2.46% decline. The volume was lower, but the move was decisive with a thick red 80% body and a dismal 1% closing range. The candle's short upper wick and nearly invisible lower wick represent a day where the bears ruled on the Nasdaq. Over two stocks declined for every advancing stocks. The other major indexes faired a bit better. The Dow Jones Industrial (DJI) ended the day with a gain +0.09% thanks much to Walt Disney (DIS +4.41%) and Exxon Mobil (XOM +3.69%). The S&P 500 (SPX) closed down -0.77%. The Russell 2000 (RUT) declined -0.69%. The VIX volatility index ended the day with a +6.35% day. It's clear among the sector list that the market was rotating, not really correcting. That doesn't mean it won't correct. Just that today was not part of a correction. 6 of the 11 SPDR sector ETFs ended the day with gains. 8 of the sectors outperformed the broader SPX index. The sectors at the top of the list were the cyclicals with Energy (XLE +3.46%) and Financials (XLF +0.93%) as the leading two sectors. At the bottom of the list was Consumer Discretionary (XLY -2.11%) and Technology (XLK -2.21%). But also at the bottom of the list was the defensive sector of Utilities (XLU -1.95%). Investors today were looking to move to sectors with new opportunities for returns, not moving into defensive positions. Another way to look at this is the ETF Fund Flows. You can check etf.com for this data, and it is delayed by one day so we can't see today. But looking at last week, when the market was also pulling back, the total inflows are greater than outflows. Topping the list of inflows are iShares and Vanguard S&P 500 ETFs. The rest of the list is mostly equity ETFs. At the top of the outflows are corporate bonds and long term treasury bonds. Put that all together and you can see the big picture thinking of money managers. Indicators of increased inflation is driving investors from treasury bonds. The higher yields on those bonds will drive increase interest rates in borrowing for companies that depend on debt to drive growth. The selling of the treasury bonds then in turn can increase defaults among businesses and so investors are also selling off risky High Yield and less risky Investment Grade corporate bonds. They are also moving from the equities of those companies and sectors with higher debt to companies and sectors with less dependency on debt. So we see an indiscriminate rotation from big tech and growth stocks to cyclical stocks. The market will eventually price in the higher interest rate impact at a more precise level (stock by stock) and you will see a mellowing out of the reaction for some companies. And all of this…is because…the economy is recovering! That's a good thing! -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.29%. Yields on the 30y and 10y treasury bond yields rose while 2y treasury bond yields remained flat. The spread between long term and short term bonds widened again. Both High Yield (HYG) corporate bonds and Investor Grade (LQD) corporate bonds prices declined. However the spread been corporate bonds and treasury bonds remains about even over the past few weeks. Silver (SILVER) and Gold (GOLD) both advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) was about even. Copper (COPPER1!) and Aluminum (ALI1!) both advanced. Both Copper and Aluminum are in high demand as economic activity returns to normal. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.557. 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 a normal level, slightly on the Greed side. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Alphabet (GOOGL) all declined for the day. Apple and Amazon are trading below their 50d moving average. Microsoft moved below its 21d EMA. Alphabet (GOOGL) is still trading above both key moving average lines. Having the big four mega-caps trading below these key indicators will weigh down the index and sentiment for the rest of the market. Walt Disney and Exxon Mobil were the top mega-caps for the day, helping the Dow Jones Industrial close the day in the positive. There are only 14 mega-caps to close in the positive. Tesla (TSLA) closed down -8.55%, putting the company at the bottom of the mega-cap list for the day. The daily market update maintains a watch list for Growth Stocks. Exactly zero of them closed in the positive today. Fiverr (FVRR), Enphase (ENPH), UP Fintech (TIGR), Ehang (EH) and Solar Edge (SEDG) all closed with more than a 10% loss for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Two big economic events scheduled for tomorrow. The first is the Consumer Confidence numbers for February, to be released at 10am. Fed Chair Jerome Powell is also supposed to begin testifying before congress at that time, which will last several hours. Earnings reports will start to pick up tomorrow. Reports will come from Square (SQ), Intuit (INTU), Upwork (UPWK), among others. Be sure to check the companies in your portfolio for upcoming earnings reports. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index is in the bottom half of the long-term regression trend channel. The trend lines I draw are the mid-point of the channels. The long-term trend line from the 10/30 bottom points to a +4.39% gain. That seems unlikely, and would need to push past resistance at the 21d EMA and the 14,000 support/resistance area. With five days of downtrend, I may finally remove this trend line and start a new one. The five-day trend line points to an advance of +0.39%. That seems like a reasonable move in the short-term. The one-day trend line is pointing to a -0.30% declined If there is further downside, the 50d MA line offers an area of support and is -2.3% below Monday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Depending on the shape of your portfolio, you might have had a great day in the market or a terrible day in the market. Looking just at the Nasdaq index, it's enough to make any investor nervous. A gap down and close below a key moving average line. Take a step back and see what the broader market was doing. Investors were not necessarily exiting equities. Instead they were rotating from companies and sectors that depend on debt for growth and moving to cyclical stocks, especially stocks expected to recover later this year. See Carnival Cruise Lines as an example. The rotation may not be over. I'm setting an expectation for lower tomorrow based on the chart, but will be watching for an expectation breaker. If it's making you nervous, reduce position sizes in those stocks most exposed. In case a deeper correction does occur, make sure you have stops in place across your portfolio, or be ready to look the other way and ride the dip. There is reason to be cautious, but no reason to be fearful. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
7
Market Week In Review - 2/16/2021 - 2/19/2021The 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 original charts for more detail each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, February 16, 2021 Facts: -0.34%, Volume higher, Closing range: 29%, Body: 58% Good: Higher high, lower low, new ATH Bad: Could not hold the morning high Highs/Lows: Higher high, higher low Candle: Red body with slightly longer lower wick than upper wick Advance/Decline: 0.84, slightly more declining stocks than advancing stocks Indexes: SPX (-0.06%), DJI (+.20%), RUT (-0.72%), VIX (+7.4%) Sectors: Energy (XLE +2.51%) and Financials (XLF +1.71%) were top. Real Estate (XLRE -1.07%) and Utilities (XLU -1.12%) were bottom. Expectation: Sideways or Higher The week opened with all-time highs, but the market could not hold on to those highs. After the first hour of trading, the indexes dropped going into mid-day and then spent the afternoon trading in back and forth choppiness. Despite declines, the major indexes put in higher highs and higher lows for the day. The Nasdaq closed with a -0.34% decline on slightly higher volume. The closing range of 29% is not great, but is above a low which is higher than Friday's low. The 58% body was formed from the opening gap up and quick sell-off in the morning. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, February 17, 2021 Facts: -0.58%, Volume lower, Closing range: 94%, Body: 31% Good: Mid-day reversal off lows to close near the day's high at end of session Bad: Gap-down open and below the 14,000 support line Highs/Lows: Lower high, lower low Candle: Green body in upper half of candle with a long lower wick Advance/Decline: 0.46, two declining stocks for every advancing stock Indexes: SPX (-0.03%), DJI (+0.29%), RUT (-0.74%), VIX (+0.19%) Sectors: Energy (XLE +1.49%) and Consumer Discretionary (XLY +0.58%) were top. Industrials (XLI -0.28%) and Technology (XLK -0.88%) were bottom. Expectation: Sideways or Higher Higher than expected Retail Sales data was enough for Amazon, but not enough to excite the overall market in the morning hours of trading. The higher than expected producer price index data forecasts upcoming inflation. That expected rise in inflation brings up the question of whether the Fed will raise interest rates earlier than previously stated. Higher interest rates tend to impact high growth companies and technology companies the most. The result was a gap-down and morning sell-off of the tech heavy Nasdaq. Fears began to subside with reassurances from FOMC members comments throughout the day and the release of the FOMC meeting minutes in the afternoon. Those minutes stated that the committee unanimously agreed to keep interest rates low for the foreseeable future. That brought the Nasdaq back up to close near the high of the day. The Nasdaq closed the day with a -0.58% loss on lower volume. The closing range of 94% resulted from a 31% green body that is above a long lower wick. That long lower wick was formed in the morning sell-off. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, February 18, 2021 Facts: -0.72%, Volume lower, Closing range: 79%, Body: 26% Good: Support at 21d EMA, turned into upside for rest of day Bad: Another morning sell-off, and the selling into close. Highs/Lows: Lower high, lower low Candle: Green body in upper half of candle with a long lower wick Advance/Decline: 0.27, almost 4 declining stocks for every advancing stock Indexes: SPX (-0.44%), DJI (-0.38%), RUT (-1.67%), VIX (+4.60%) Sectors: Utilities (XLU +0.60%) and Consumer Discretionary (XLY +0.04%) were top. Energy (XLE -2.26%) was bottom. Expectation: Sideways or Lower Today produced a very similar candle to the day before, and another step back for the Nasdaq. The market opened again reacting to bad economic news, selling heavily in the morning. However, buyers came in as the index hit the 21d exponential moving average. The Nasdaq closed the day with a -0.72% loss on lower volume. The similar candle to the day before had another high closing range over a long lower wick. The upper wick is slightly longer due to the selling just before close. The closing range was 79% and the green body in the upper half covers 26% of the candle. There were nearly four declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, February 19, 2021 Facts: +0.07%, Volume higher, Closing range: 22%, Body: 38% Good: Higher high, lower low Bad: Morning gains lost in afternoon selling, low closing range and red body Highs/Lows: Higher high, higher low Candle: Red body in lower half of candle with longer upper wick Advance/Decline: 1.67, 3 advancing stocks for every two declining Indexes: SPX (-0.19%), DJI (-0.0%), RUT (+2.18%), VIX (+1.96%) Sectors: Materials (XLB +1.83%) and Energy (XLE +1.67%) were top. Consumer Staples (XLP -1.26%) and Utilities (XLU -1.49%) were bottom. Expectation: Sideways It was day for almost everyone but the mega-caps. Gainers outnumbered losers at more than a three to two ratio. But the mega-caps, especially in tech, lost ground while the rest of the market advanced. Equal weighted QQQE gained +0.36% while the cap weighted QQQ lost -0.44%. The Nasdaq closed with a +0.07% gain on higher volume. The candle has a longer upper wick over a 38% red body and a dismal 22% range that was created from morning gains being sold off in the afternoon. There were over three advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The short week brought a lot of choppiness in the equity markets. There was a mid-day reversal every day of the week. Tuesday was the gap-up that sold off in the afternoon. Wednesday and Thursday started with morning selling that was bought back in the second half of the sessions. Friday finished the week with a rise in the morning only to lose those gains in the afternoon. What was all the fuss about? It seemed that investors are trying to price in the possibility of higher than expected inflation and the potential for interest rates going up earlier than anticipated. Despite comments from the Fed that monetary policy would remain the same, the worries in the market continued to rise. Many now believe a huge stimulus will super charge inflation as American's unleash stimulus checks and record savings accounts back into the economy. The expectations I had throughout the week were broken daily. Tuesday I saw support at the 14,000 level and thought the market would build off of that for gains. Wednesday I saw the huge buy back in the afternoon and thought the momentum would lead into the next day's trading. So Thursday I gave up and finally called for Sideways or Lower on Friday. The gap down on Wednesday and close below the 10d MA should have been the signal for me to set an expectation for lower on Thursday. On Thursday, the bounce off the 21d EMA should have told me that gains were possible in the next day, so should have set Sideways or Higher. Anyway, they are just expectations and not predictions. Part of this weekly review exercise is to learn from the chart, especially where it went against my expectations. The Nasdaq closed the week down -1.57%. Volume was lower than the previous week. The closing range of 35% is lower than desired but the index did achieve a higher high for the week and closed above last week's low. The average closing range for the past 16 weeks is at 70%. Although the closing range this week is at 35%, the index is hugging the mid-line of the channel drawn from the March bottom. The S&P 500 (SPX) declined -0.71% for the week. The Dow Jones Industrial (DJI) advanced +0.11%. The Russell 2000 (RUT) lost -0.99%. The VIX volatility index closed the week a bit higher but still remains at a very low level compared to the last several months. It was a week for the cyclical stocks. Energy ( XLE ), Financials ( XLF ), Materials ( XLB ), and Industrials ( XLI ) were the only sectors to close the week with gains. That was not the case for the entire week. Communication Services ( XLC ) started the week with gains but faded in the last two days. Utilities ( XLU ) had one day as the leading sector on Thursday, but moved back to the bottom of the list on Friday. Health Care ( XLV ) was the worst performing sector of the week. US 30y and 10y Treasury Bond yields continued to rise and widen the gap with shorter term treasury bonds. This is despite a week when equity investors seemed nervous. The bond yields could rise even faster as a stimulus is released into the economy and start to have a negative impact on companies carrying debt. High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bonds (LQD) prices both dropped for the week. The US Dollar (DXY) declined just -0.07% for the week. Silver (SILVER) finished the week about even while and GOLD (GOLD) declined. Crude Oil Futures (CRUDEOIL1!) fell back just slightly from the previous week's gains. Timber (WOOD) also declined for the week. However Copper (COPPER1!) and Aluminum (ALI1!) both gained as demand in manufacturing is expected to outpace supply for these metals. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps It was a disappointing week for the big four mega-caps, all closing the week with a loss. Amazon (AMZN) seemed like it would have a great week, having gains each day from Tuesday to Thursday, but it gave up all those gains on Friday to close the week with a -0.85% weekly decline. Apple (AAPL) continued to pullback, closing under its 10 week moving average and a weekly loss of -4.06%. Microsoft (MSFT) was down -1.64% for the week while Alphabet (GOOGL) was down -0.30%. Both are still well-above their 10 week moving average. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.575, still at the level of overly bullish optimism. It did spike to 0.667 on Thursday but quickly returned to the low level on Friday. 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. The CNN Fear & Greed index is still in a Greed level, but is not at an extreme level. Money managers are at a 108 leveraged level as measured by the NAAIM Exposure Index. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Consumer confidence numbers will be released on Tuesday that can predict consumer spending and drive economic activity. Also on Tuesday, Fed Chair Jerome Powell is scheduled to speak to congress about the economic outlook. New Home Sales data will be the focus for Wednesday as the market opens. Thursday will bring an update on Durable Goods Orders, Initial Jobless Claims and Pending Home Sales. Core Price Index data released on Friday will give another view into inflation. In addition, personal spending and consumer sentiment data will be released Friday. Oil inventories will be updated with the Weekly Crude Oil Stock on Thursday and the Crude Oil Inventories on Wednesday. Earnings reports will keep growth investors busy next week with many popular stocks reporting quarterly results. Monday will kick off with a report from Berkshire Hathaway (BRKa) before the market opens. On Tuesday, reports will come from Square (SQ), Intuit (INTU), Upwork (UPWK), among others. On Wednesday, we will get updates for Nvidia (NVDA), Lowe's (LOW), TJX (TJX), Teladoc (TDOC), Magnite (MGNI) and many others. Thursday will add to the tsunami of reports with Salescore.com (CRM), Anheuser Busch (BUD), MercadoLibre (MELI), Moderna (MRNA), Autodesk (ADSK), Workday (WDAY), DoorDask (DASK), Vmware (VMW), Dell (DELL), Zscaler (ZS), Wayfair (W), Etsy (ETSY), Plug Power (PLUG), Farfetch (FTCH), Vipshop (VIPS), Novocure (NVCR), Beyond Meat (BYND), the list just keeps going. Friday will include DraftKings (DKNG), and Cinemark (CNK). Be sure to check for scheduled earnings reports for stocks in your own portfolio. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The inflation outlook came as a surprise this week. But the good news is that it’s a sign of economic activity returning faster than anticipated. Recovery is happening even as we wait for more stimulus. Commodity prices, including important metals like Copper and Aluminum are climbing. Retail Sales for January were much higher than expected. Services and Manufacturing PMI showed activity was healthy in those sectors. Building Permits were higher. Both the Import and Export Price indexes were higher than expected. All of the is bullish for the USD and the economy. The top four sectors for the week were Energy, Financials, Industrials and Materials. Even when the rest of the market was down, these four cyclical sectors ended the week with gains. These are the sectors impacted the most by the economic downturn last week and having them show strength in a week that the market was weak is a bullish sign. Although the Put/Call ratio is in an overly bullish area, the CNN Fear & Greed index remains moderately on the greed side. Nowhere near the extreme greed level that often predicates a pullback. The Nasdaq was down for the week, but it is still hugging the midline of the upward channel from the March 2020 bottom. This week produce another all-time high and closed above the previous weeks low. That still reads uptrend. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side But how high can it go? That's the question on everyone's mind. And that's the reason that investors continue to be bullish but keep one foot out the door, ready to exit the market on any bad news. Yields on long term treasury bonds have soared over the past two weeks. With the new stimulus bill seemingly just around the corner that could send yields even higher. On one hand that is an indicator of investor confidence. On the other hand it has an impact on other financial instruments including adjustable loans based on the 10y treasury bond yield. That can have a negative impact in other areas of the economy and equity markets. Outflows were high for corporate bond ETFs showing investors getting nervous about corporate debt as treasury bond yields signal higher costs to service the debt. Mega-caps are showing relative weakness to the market. Amazon finally attempted a rally, but it broke down on Friday and gave back the week's gains. Apple is trading below its 10w moving average. Tesla is trading below its 21d EMA. It's important for these mega-caps to perform well to keep the indexes moving and keep investor sentiment high. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side: The 10d MA is at 13,969.82. The first test is for the index to close back above that line. 14,000 is the current support/resistance area so look for the index to get above and stay above this area. Monday's high of 14,175.12 will be the next test. Another weekly high would be a great sign for a continued rally. On the downside, there are several key levels to raise caution flags: The low of the previous week is 13,845.47 and the index closed this week just above that point. Staying above here next week will be a sign of strong buyer support. The low of this week was 13,714.35. Stay above that low to reclaim the trend of higher highs and higher lows. The 21d EMA is at 13,712.41. That is around 1.0% below Friday's close. It's good that it is catching up, but would be better that the index stays above the line. The 50d MA is at 13,204.03. A violation of this line would be a warning side. It has not been tested since 11/4. There is support at the 13,000 area, seen in the lows from the first weeks of January. Several possible areas of support at 12,550, 12,250, and 12,000. The 200d MA moved above is about 17% below the index at 11,407.58. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up I was hoping for a more decisive move on Friday to signal going into next week. Instead the index came to rest inside the gap between the close of the first week of February and the open of the second week. Instead, we got an indecisive finish to the week created by strength in small caps and weakness in large and mega-caps. Democrats are optimistic about a vote for the stimulus bill happening this week. That could create some more turmoil as investors grapple with the short term benefit to the market weighed against the longer term impact to inflation. One of the best signals next week will be the massive amount of earnings reports that will be spread across cap-size segments and industry sectors. Watch for how the market reacts to the reports. If the reports are positive but the stock price doesn't budge or worse goes down, that can be a red flag. On the other hand, if reports are good and the market responds positively, it could be a melt-up situation. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
8
Daily Market Update for 2/19Trend lines drawn from the 10/30 bottom (76d), 2/12 (5d) and today 2/19 (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, February 19, 2021 Facts: +0.07%, Volume higher, Closing range: 22%, Body: 38% Good: Higher high, lower low Bad: Morning gains lost in afternoon selling, low closing range and red body Highs/Lows: Higher high, higher low Candle: Red body in lower half of candle with longer upper wick Advance/Decline: 1.67, 3 advancing stocks for every two declining Indexes: SPX (-0.19%), DJI (-0.0%), RUT (+2.18%), VIX (+1.96%) Sectors: Materials (XLB +1.83%) and Energy (XLE +1.67%) were top. Consumer Staples (XLP -1.26%) and Utilities (XLU -1.49%) were bottom. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview It was day for almost everyone but the mega-caps. Gainers outnumbered losers at more than a three to two ratio. But the mega-caps, especially in tech, lost ground while the rest of the market advanced. Equal weighted QQQE gained +0.36% while the cap weighted QQQ lost -0.44%. The Nasdaq closed with a +0.07% gain on higher volume. The candle has a longer upper wick over a 38% red body and a dismal 22% range that was created from morning gains being sold off in the afternoon. There were over three advancing stocks for every declining stock. The Russell 2000 showed up big after bouncing off its 21d exponential moving average and advancing +2.18% for today. The S&P 500 (SPX) declined -0.19% while the Dow Jones Industrial average (DJI) remained flat. The VIX volatility index dropped -1.96%. Utilities (XLU -1.49%) moved back to the bottom of the sector list after topping the list yesterday. Moving to the top were cyclical sectors Materials (XLB +1.83%) and Industrials (XLI +1.64%). Energy (XLE +1.67%) also moved back to the top just behind Materials. The final cyclical sector, Financials (XLF +1.19%), was in fourth place. Having these sectors at the top is a great sign for a recovering economy. They at the bottom during the March 2020 crash. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.25%. Yields on the 20y, 10y and 2y treasury bonds all rose for the day. The spread between long term and short term bonds widened back to high levels not seen since 2015. High Yield (HYG) corporate bonds remained flat while Investor Grade (LQD) corporate bonds prices declined. Silver (SILVER) and Gold (GOLD) both advanced. Crude Oil (CRUDEOIL1!) declined -2.54%. Timber (WOOD) advanced. Copper (COPPER1!) made a huge jump of +5.30%. Aluminum (ALI1!) declined. Analysts are predicting a big shortage of copper as economic activity returns and makes up for previous low activity. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.575. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL) was the only of the biggest four mega-caps to advance but it was only a +0.12% gain. Amazon (AMZN) saw the largest decline with a -2.35% returning to the weekly open price after three days of gains. Microsoft (MSFT) and Alphabet (GOOGL) lost -1.16% and -0.81%. Amazon moved back below its 21d EMA while Apple continues to trade below both the 21d EMA and 50d MA. Mega-caps had few big winners for the day. Intel Corp (INTC) and ASML Holdings (ASML) topped the list with greater than 2% gains. At the bottom of the list was Facebook (FB) with a -2.91% loss. Growth stocks did much better for the day. Palantir (PLTR) had a massive gain with a +15.22% advance. Chinese fintech companies Up Fintech (TIGER) and FUTU Holdings (FUTU) gained +11.33% and +10.41%. Magnite (MGNI) also had a big gain, moving up +8.65%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There is not much economic news scheduled for Monday. Next week will be a busy one for earnings with many popular growth stocks reporting as well as some big tech. Monday will be a somewhat slow start though with only Berkshire (BRKa) being of much interest to this daily update. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index is in the bottom half of the long-term regression trend channel. The trend lines I draw are the mid-point of the channels. The long-term trend line from the 10/30 bottom points to a +1.73% gain. The five-day trend line points to a decline of -0.67%. The one-day trend line is just below that point. If there is further downside, the 21d EMA line offers an area of support and is -1.03% below Friday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Manufacturing and Services data in the morning was positive as well as a surprise in Existing Home Sales data. That was enough for the market to have a bullish morning, but not enough to keep those gains in the afternoon. As the economy begins to heat up, investors are getting more nervous about what the stimulus will do to inflation and eventually interest rates. Fed's Rosengren reinforced the need for the larger package to return the economy and full employment back to pre-pandemic levels. However, what's good for the economy may not be good for your favorite companies. The market has spent the week pricing in the expected impact of higher inflation. Although that has meant some pullback, it hasn't caused a mass run for the exits. As sellers cool off, there is a good possibility for more growth in the coming weeks. Have a great weekend! Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 2/18Trend lines drawn from the 10/30 bottom (75d), 2/11 (5d) and today 2/18 (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, February 18, 2021 Facts: -0.72%, Volume lower, Closing range: 79%, Body: 26% Good: Support at 21d EMA, turned into upside for rest of day Bad: Another morning sell-off, and the selling into close. Highs/Lows: Lower high, lower low Candle: Green body in upper half of candle with a long lower wick Advance/Decline: 0.27, almost 4 declining stocks for every advancing stock Indexes: SPX (-0.44%), DJI (-0.38%), RUT (-1.67%), VIX (+4.60%) Sectors: Utilities (XLU +0.60%) and Consumer Discretionary (XLY +0.04%) were top. Energy (XLE -2.26%) was bottom. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Today produced a very similar candle to the day before, and another step back for the Nasdaq. The market opened again reacting to bad economic news, selling heavily in the morning. However, buyers came in as the index hit the 21d exponential moving average. The Nasdaq closed the day with a -0.72% loss on lower volume. The similar candle to the day before had another high closing range over a long lower wick. The upper wick is slightly longer due to the selling just before close. The closing range was 79% and the green body in the upper half covers 26% of the candle. There were nearly four declining stocks for every advancing stock. All of the major indexes were down for the day as losses were shared much more broadly then the previous day. The S&P 500 (SPX) declined -0.44%. The Dow Jones Industrial average (DJI) declined -0.38%. The Russell 2000 (RUT) declined the most with a -1.67% loss. The VIX volatility index rose +4.60%. In the biggest change from earlier in the week, Utilities (XLU +0.60%) rose to the top of the sector list. Consumer Discretionary (XLY +0.04%) was the second sector. However, the other defensive play sector Real Estate (XLRE -0.05%) was not too far behind. All other sectors declined for the day. Energy (XLE -2.26%) and Health Services (-0.63%) were the bottom two sectors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.39%. The US 30y and 10y treasury bond yields rose while the 2y yields dropped for the day. The spread between long term and short term bonds widened slightly. High Yield (HYG) and Investor Grade (LQD) corporate bonds prices both declined. The spread between corporate bonds and treasury bonds tightened a bit. Silver (SILVER) and Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) declined just -0.09%. Timber (WOOD) declined. Copper (COPPER1!) and Aluminum (ALI1!) both advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.667 as investors became much more cautious for the day. 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 NAAIM exposure index (measured on Wednesdays) is still above 100 showing money managers are still fully into leveraged positions in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Amazon (AMZN) is continuing to show strength against the market with another gain today while the indexes lost. The stock advanced +0.59%. The other big four lost for the day. Microsoft (MSFT) declined -0.17% and Alphabet (GOOGL) declined -0.60% but both remain well above their key moving average lines. Apple (AAPL) continued to move farther below the 50d MA with a -0.86% decline. Coca-Cola (KO) was the top mega-cap of the day gaining +1.28% after announcing a 2.4% increase in their annual dividend. Visa (V), Proctor & Gamble (PG) and Nike (NKE) were other top mega-cap gainers. Walmart (WMT) declined -6.48% after releasing earnings before market open. They had record revenue but then missed on adjusted earnings. It was another tough day for growth stocks. Twilio (TWL) was a highlight with a 7.73% gain after smashing expectations in their earnings release the day before. Fastly (FSLY) dropped -15.45% despite beating expectations on earnings and revenue. The company provided guidance for 2021 that disappointed investors. RIOT Blockchain Inc pulled back -20% from meteoric climb the previous seven days. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Manufacturing and Services purchasing managers index data will be released right as the market opens on Friday. The two measures will give insight into the economic activity among these two sectors. Existing Home Sales data will be released mid-morning. FOMC members will make comments tomorrow morning and the Fed Monetary Policy Report will be released. There are no earnings reports tomorrow that are relevant for the Daily Market Update. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index is in the bottom half of the long-term regression trend channel. The trend lines I draw are the mid-point of the channels. The long-term trend line from the 10/30 bottom points to a +1.61% gain. The one-day trend line is pointing to a +1.03% advance. The five-day trend line points to a decline of -0.42%. If there is further downside, the 21d EMA line offers an area of support and is -1.24% below Thursday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up If you look at the weekly chart for the Nasdaq, it's an interesting spot that we are heading into the last day of the week. Looking back two weeks there is a long bullish green candle. Then last week started with a gap-up on Monday's open. Right now, the index sits in the middle of that gap. The bears would love to fill that gap with solid red while the bulls would like to leave the gap empty. The biggest character change for today was the rise of Utilities to the top of the sector list. That and the rise in the put/call ratio show the nervousness in the market. The last two days I wrote an expectation for Sideways or Higher based on the strong afternoon buy backs. It seems one of those weeks where the market goes the opposite of expectations each day. So today I'm writing in an expectation of Sideways or Lower. If it goes higher tomorrow, you can thank me. :) Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
6
Daily Market Update for 2/17Trend lines drawn from the 10/30 bottom (74d), 2/10 (5d) and today 2/17 (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, February 17, 2021 Facts: -0.58%, Volume lower, Closing range: 94%, Body: 31% Good: Mid-day reversal off lows to close near the day's high at end of session Bad: Gap-down open and below the 14,000 support line Highs/Lows: Lower high, lower low Candle: Green body in upper half of candle with a long lower wick Advance/Decline: 0.46, two declining stocks for every advancing stock Indexes: SPX (-0.03%), DJI (+0.29%), RUT (-0.74%), VIX (+0.19%) Sectors: Energy (XLE +1.49%) and Consumer Discretionary (XLY +0.58%) were top. Industrials (XLI -0.28%) and Technology (XLK -0.88%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Higher than expected Retail Sales data was enough for Amazon, but not enough to excite the overall market in the morning hours of trading. The higher than expected producer price index data forecasts upcoming inflation. That expected rise in inflation brings up the question of whether the Fed will raise interest rates earlier than previously stated. Higher interest rates tend to impact high growth companies and technology companies the most. The result was a gap-down and morning sell-off of the tech heavy Nasdaq. Fears began to subside with reassurances from FOMC members comments throughout the day and the release of the FOMC meeting minutes in the afternoon. Those minutes stated that the committee unanimously agreed to keep interest rates low for the foreseeable future. That brought the Nasdaq back up to close near the high of the day. The Nasdaq closed the day with a -0.58% loss on lower volume. The closing range of 94% resulted from a 31% green body that is above a long lower wick. That long lower wick was formed in the morning sell-off. There were two declining stocks for every advancing stock. The Dow Jones Industrial (DJI) was able to set another new all-time high and close with a +0.29% gain. The S&P 500 (SPX) was about even with a -0.03% loss. The Russell 2000 (RUT) was the worst performing index of the day with a -0.74% decline. The VIX volatility index rose +0.19%. Energy (XLE +1.49%) was the top sector again as Crude Oil prices continue to surge, now because of the weather events in the southern US putting a squeeze on oil and gas supplies. The Consumer Discretionary (XLY +0.58%) sector was the second best performer, benefiting from the high retail sales data. The worst performing sectors were Industrials (XLI -0.28%) and Technology (XLK -0.88%). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) advanced with a +0.49% gain after staying most even for over a week. The US 30y, 10y and 2y yields all dropped for the day. The spread between long term and short term bonds tightened. High Yield Corporate Bond (HYG) prices declined for the day while Investment Grade (LQD) corporate bond prices increased. The spread between corporate bonds and treasury bonds remained about the same. Silver (SILVER) advanced slightly while Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) resumed its climb with another advance. Timber (WOOD) declined. Copper (COPPER1!) declined while Aluminum (ALI1!) mad a big advance. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.525. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL) led much of the market down early in the session as it gapped below its 50d moving average and sank even lower before catching some support and closing just below the key moving average line. The sell-off could have come from the revelation that Warren Buffet sold 9.81 million shares in Q4 of 2020. The other big four mega-caps all had gains for the day. Microsoft (MSFT) gained +0.21% while Alphabet (GOOGL) gained +0.38%. Amazon (AMZN) had the best day of the four with a +1.21% gain on the retail sales data momentum. Verizon (VZ) and AT&T (T) led mega-caps with a 5.24% and 2.07% gain. PayPal (PYPL), Taiwan Semiconductor (TSM) and Nvidia (NVDA) were some of the biggest decliners among the mega-caps. Growth stocks had a challenging day as investors feared the possibility of higher inflation leading to higher interest rates. It wasn't a bad day for all growth stocks. Ehang Holdings (EH) bounced off it's 50d moving average to gain 67.88% after losing 62% in the prior session. The blockchain stock RIOT (RIOT) put in another 30% gain. The stock has risen 230% in the last seven sessions. Twilio (TWLO) was up over 11% in afterhours trading after releasing an earnings update that crushed expectations. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Thursday will start Building Permits and Housing Starts data before market open. Initial Jobless Claims will also get an update. Finally, Manufacturing Index data released before the market will provide a view on the level of economic activity. After market open, Crude Oil Inventories will be released and are likely to be lower than expectations. That would continue to pump up crude oil futures and the energy sector. Walmart (WMT) will be an important earnings release to watch for before market open tomorrow. Fiverr (FVRR) is also scheduled to release before the market opens. Roku (ROKU) and Dropbox (DBX) will release after market close. Check the stocks in your portfolio for earnings releases to make sure you are caught by surprise. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The long-term trend line from the 10/30 bottom points to a +0.72% gain. The one-day trend line is just below that at a +0.42% advance. The five-day trend line points to sideways move ending with a +0.07% gain. That would put the index just below the 14,000 support/resistance area. If there is further downside, the 21d EMA line also offers an area of support and is -2% below Wednesday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was an expectation breaker to see the index gap-down below the 14,000 line in the morning. However, it's important to give the market some time to digest economic data and news and then find the direction. In today's case that happened around mid-day and the market started to make gains again after investor worries subsided. The past week as had the presence of both bears and bulls and today was no different. The past two days have gone to the bears, but there are still indications of confidence and strength among the different market indicators in the daily market update. Still investors seem to be fickle with news and so keeping an eye on position sizes and risk levels is important. Stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
6
Daily Market Update for 2/16Trend lines drawn from the 10/30 bottom (73d), 2/9 (5d) and today 2/16 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, February 16, 2021 Facts: -0.34%, Volume higher, Closing range: 29%, Body: 58% Good: Higher high, lower low, new ATH Bad: Could not hold the morning high Highs/Lows: Higher high, higher low Candle: Red body with slightly longer lower wick than upper wick Advance/Decline: 0.84, slightly more declining stocks than advancing stocks Indexes: SPX (-0.06%), DJI (+.20%), RUT (-0.72%), VIX (+7.4%) Sectors: Energy (XLE +2.51%) and Financials (XLF +1.71%) were top. Real Estate (XLRE -1.07%) and Utilities (XLU -1.12%) were bottom. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The week opened with all-time highs, but the market could not hold on to those highs. After the first hour of trading, the indexes dropped going into mid-day and then spent the afternoon trading in back and forth choppiness. Despite declines, the major indexes put in higher highs and higher lows for the day. The Nasdaq closed with a -0.34% decline on slightly higher volume. The closing range of 29% is not great, but is above a low which is higher than Friday's low. The 58% body was formed from the opening gap up and quick sell-off in the morning. There were more declining stocks than advancing stocks. The Russell 2000 (RUT) was the worst performing of the indexes with a -0.72% decline. It's also the only index that did not make a new all-time high today. The S&P 500 (SPX) declined -0.06% while the Dow Jones Industrial (DJI) gained +0.20%. The VIX volatility index rose +7.46%. Energy (XLE +2.51%) and Financials (XLF +1.03%) were the top sectors again. Likewise, Real Estate (XLRE -1.07%) and Utilities (XLU -1.12%) were again the bottom sectors. Both are positive signals for the market. Energy and Financials sector gains are being led by optimism for the economic recovery. Energy is expected to benefit from high demand of recovering transportation sectors. Financials is seen to benefit from higher yields on bonds. Real Estate and Utilities tend to be defensive plays for money managers who need to stay invested in equities. So seeing them at the bottom of the list is another signal of confidence. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) remained steady with a +0.03% gain. The US 30y, 10y and 2y yields all climbed for the day. The spread between long term and short term bonds continues to widen. High Yield Corporate Bond (HYG) prices declined for the day but remained high compared to Investment Grade (LQD) corporate bond prices which declined more. The spread between corporate bonds and treasury bonds widened as investors seek out the riskier asset classes for better returns. Silver (SILVER) and Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) declined just slightly after an accelerated rise since the beginning of February. Timber (WOOD) continued to advance. Copper (COPPER1!) advanced while Aluminum (ALI1!) declined slightly. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio declined to 0.535. 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 more to the greed side. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Of the four biggest mega-caps, only Alphabet (GOOGL) advanced for the day, gaining +0.75%. Microsoft (MSFT) and Amazon (AMZN) declined -0.53% and -0.27%. Apple (AAPL) had the worst decline, losing -1.61%. Both Amazon and Apple are trading below the 21d exponential moving average. Salesforce.com (CRM), Exxon Mobil (XOM), Bank of America (BAC) and Nvidia (NVDA) were the top four mega-cap stocks. JP Morgan (JPM) and PayPal (PYPL) also added to the financial mega-cap stocks with gains over 2%. Facebook (FB) gained +1.28% driving the Communications sector (XLC) to positive gains, along with Google's advance. Growth stocks had a mixed day. Chinese financial stocks FUTU Holdings (FUTU) and UP Fintech (TIGR) advanced with huge +29.43% and +22.52% gains. On the other hand, Chinese aerial vehicle company Ehang Holdings (EH) lost -62.69% on a damaging report questioning the validity of the business. Pinterest (PINS +6.08%) and Twitter (TWTR +2.87%) added to the gains of the larger communications sector stocks. Palantir (PLTR -12.75) sold off after a disappointing earnings release. Solar Edge (SEDG) is up 4% after hours on positive earnings news. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Some key economic data will be release before market open tomorrow. Producer Price Index data will give a leading indication on inflation. Consumer Price Index data released last week was lower than expected. An increase in Produce Price Index data would be positive as it will eventually impact consumer prices. Also before market open, Retail Sales data for January will be released. Finally, Industrial Production data for January will be released just before the market opens. Shopify (SHOP) will release earnings before market open tomorrow. Baidu (BIDU), Twilio (TWLO), Synopsis (SNPS), Fastly (FSLY), SunPower (SPWR), Tilray (TLRY) are some popular growth stocks reporting earnings after market close. Also reporting tomorrow will be Hilton (HLT) and Hyatt (H) which will provide insight to the hotel industry recovery. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The five-day trend line points to a +0.28% for Wednesday. The long-term trend line from the 10/30 bottom points to a sideways -0.05% decline. The one-day trend points to a -0.91% decline that would meet up with the 14,000 support level. If there is further downside, the 21d EMA line also offers an area of support and is -2.8% below Tuesday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It may not be the start to the week that we all wanted, but there are positive signals in the underlying data that could turn into upside later in the week. The optimism for a stimulus bill that will boost the economic recovery is clear in the moves away from defensive plays and safe haven asset classes. Optimism is also growing as vaccines continue to roll out with new providers of tests, vaccines and other treatments for the pandemic being released weekly. Eventually that could get consumers back out and spending, unleashing record amounts of household savings over the past year. At the same time, the action today was another example of investors being bullish while keeping one foot out the door. A bad news cycle could send investors to the exit. It's important to keep those stop loss in place and manage positions to your level of risk acceptance. Stay healthy and trade well!
NASDAQ:IXIC
by drewby4321
5
Market Week In Review - 2/8/2021 - 2/12/2021The 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, February 8, 2021 Facts: +0.95%, Volume higher, Closing range: 100%, Body: 54% Good: New all-time high, no upper wick, bullish into close Bad: Small gap to fill Highs/Lows: Higher high, higher low Candle: Upper half of candle is body, lower wick from morning dip but did not fill gap Advance/Decline: 3.36, more than three advancing stocks for every declining stock Indexes: SPX (+0.74%), DJI (+0.76%), RUT (+2.53%), VIX (+1.77%) Sectors: Energy (XLE +4.18%) and Financials (XLF +1.29%) were top. Utilities (XLU -0.77%) was the only losing sector. Expectation: Higher There was a lot to be excited about in the market today. The Nasdaq gapped up at open, as investors had high optimism for a stimulus bill to pass through congress. Democrats added new details of more than $50b to go toward transportation industries. That not only sent airline stocks soaring, but also pumped up the Energy sector. When the Energy sector leads, in most cases, the whole market follows. The Nasdaq closed with a +0.95% gain on a big spike in volume. There was a morning dip that nearly closed a gap-up at open, but bulls took over early and led the afternoon to a new all-time high and 100% closing range. The 54% green body in the upper half of the candle was the result of a rally into close. More than three stocks advanced for every stock that declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, February 9, 2021 Facts: +0.14%, Volume higher, Closing range: 52%, Body: 52% Good: New all-time high, higher low, close above 14,000 Bad: Upper wick, tested high three times but closed in middle of range Highs/Lows: Higher high, higher low Candle: Lower half of candle is body, upper wick formed after testing high 3 times Advance/Decline: 1.45, about three advancing stocks for every two declining stocks Indexes: SPX (-0.11%), DJI (-0.03%), RUT (+0.40%), VIX (+1.84%) Sectors: Energy (XLE +4.18%) and Financials (XLF +1.29%) were top. Utilities (XLU -0.77%) was the only losing sector. Expectation: Sideways or Higher The market continues to move higher, albeit at a slower pace than the previous week. Today brought another new all-time high for the Nasdaq and a higher low. However better than expected Job Openings data wasn't enough for the index to stay at the top of the range, testing the high three times before closing in about the middle of the intraday trading range. The Nasdaq closed with a +0.14% gain on higher volume than the previous day. The closing range of 52% is above a 52% body that covers the lower half of the candle with no lower wick. A higher high and a higher low is a sign of strength and closing above 14,000 was a key level to look for this week. About three stocks advanced for every two stocks that declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, February 10, 2021 Facts: -0.25%, Volume higher, Closing range: 48%, Body: 46% Good: New all-time high, close above yesterday's low Bad: Morning dip below previous low, again fading into close Highs/Lows: Higher high, lower low Candle: Bearish outside day with hanging man candlestick Advance/Decline: 0.88, slight more declining stocks than advancing stocks Indexes: SPX (-0.03%), DJI (+0.20%), RUT (-0.72%), VIX (+1.66%) Sectors: Energy (XLE +1.91%) and Communications (XLC +0.95%) were top. Consumer Discretionary (XLY -0.99%) was the bottom sector. Expectation: Sideways Wednesday was a wild session for the markets with a big dip in the morning as investors reacted to Core Consumer Price Index data that showed inflation was lower than expected. Inflation is something economists want to see at just the right level, not too much and not too little. The market recovered as morning turned into the afternoon, but then dipped again into close after statements from Fed Chairman Jerome Powell. The Nasdaq closed with a -0.25% loss on higher volume. The closing range of 48% is good considering the morning dip and that the close is higher than yesterday's open. However, the candle has a hanging man pattern that shows sellers are ready to take over as soon as any bad news hits the market. There were slightly more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, February 11, 2021 Facts: +0.38%, Volume higher, Closing range: 77%, Body: 14% Good: Finished higher, after selling pressure in morning Bad: Long lower shadow for second day showing more selling pressure Highs/Lows: Lower high, higher low Candle: Inside day with long lower shadow, small negative body in upper half of candle Advance/Decline: 0.54, two declining stocks for every advancing stock Indexes: SPX (+0.17%), DJI (-0.02%), RUT (+0.13%), VIX (-3.37%) Sectors: Technology (XLK +1.10%) and Health (XLV +0.19%) were top. Energy (XLE -1.54%) was the bottom sector. Expectation: Sideways The Nasdaq moved sideways today as the fight between buyers and sellers created a second day of choppiness. The morning sell-off was possibly prompted by disappointing employment data and a continued outlook from the Fed of an economy that needs support. The index closed with a +0.38% gain on slightly higher volume than the previous day. The inside day, marked by a lower high and a higher low, saw a big dip in the morning and another dip in the afternoon before bulls took prices higher into close and ended the day with a slight gain. The action resulted in a closing range of 77% and a small 14% red body in the upper half of the candle. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, February 12, 2021 Facts: +0.50%, Volume lower, Closing range: 96%, Body: 71% Good: Good gains in the morning, higher prices into close Bad: Nothing Highs/Lows: Higher high, higher low Candle: Mostly green body with tiny upper wick as index closed near the high Advance/Decline: 0.89, slightly more declining stocks than advancing stocks Indexes: SPX (+0.47%), DJI (+0.09%), RUT (+0.18%), VIX (-6.02%) Sectors: Energy (XLE +1.48%) and Materials (XLB +1.03%) were top. Real Estate (XLRE -0.03%) and Utilities (XLU -0.73%) were bottom. Expectation: Higher The market rallied into the end of the week, closing at or near all-time highs across the major indexes. Despite lower than expected consumer sentiment data, investors were optimistic about the stimulus talks and progress with vaccines to end the pandemic. As a sign of that confidence, the defensive play of Utilities remained at the bottom of the sector list heading into a three-day weekend. The Nasdaq closed with a +0.50% gain, just below the all-time high. The volume was lower than the previous day, but the 96% closing range and 71% green body appear very bullish. Most of the gains came in the last 30 minutes of trading. However, there were more declining stocks than advancing stocks on the Nasdaq. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The second week of February began and ended with a rally to all-time highs. Overall, it was a bullish week, but the bears were always present. Monday opened with a gap up that was quickly tested with a dip in the morning, before climbing to close the day with a nearly a 1% gain. Tuesday set a new all-time high but could not hold onto the high and closed in the middle of the day's price range. Wednesday and Thursday is when the bears made the biggest attempt with big morning and afternoon dips that kept the index in a sideways move. The close from Tuesday to Thursday only changed by 0.13%, but the trading range was nearly 2%. That left Friday as the deciding day on whether the week would be bullish or bearish. The bulls won. Energy stocks showed up big this week, building on news of a large stimulus targeted at transportation. Add that crude oil prices continued higher throughout the week. On the other hand, Consumer stocks did poorly after consumer price index data showed inflation lower than expected. Consumer confidence and spending data released later in the week confirmed there was less demand for consumer products. None of that data was enough to scare investors from the market. Yields on long-term treasury bonds moved higher as investors remained in equity markets. Even within the stock market, the typical defensive plays used by investors did not show up. Utilities remained as the worst performing sector even as Friday closed into a three-day weekend. The Nasdaq closed the week up +1.73% from the previous weeks close. Volume was higher than the previous week, driven by the two day fight of bulls and bears on Wednesday and Thursday. The closing range of 95% was thanks to a rally in the last 30 minutes of trading on Friday, that brought the index near to the all-time high set earlier in the week. The average closing range for the past 15 weeks is at 72%. This past week broke a pattern of ups and downs over the previous six weeks with two high weekly closes in a row. The Russell 2000 (RUT) outperformed the other indexes with a +2.51% weekly gain. The S&P 500 (SPX) gained +1.23% while the Dow Jones Industrial (DJI) gained +1.00%. The VIX volatility index closed at its lowest point since before the February 2020 highs turned into the 2020 market crash. Energy ( XLE ) led for a second week in a row as crude oil prices continue to rise and optimism for economic recovery to bring demand back to oil and gas as transportation, travel and leisure sectors bounce back. In particular, transportation companies got a boost on Monday from news of a targeted stimulus to help the sector. In turn, that projects well for Energy. Technology ( XLK ) and Health ( XLV ) led for Thursday as Energy pulled back for a day. However, Energy bounced back up to the week's highs on Friday. Consumer Staples ( XLP ) and Consumer Discretionary ( XLY ) both lost for the week. Core CPI numbers showed lower than expected inflation and weighed down on the two sectors. Utilities ( XLU ) was the bottom sector for the week. There was not much interest in this defensive play for equities this week. US 30y and 10y Treasury Bond yields continued to rise and widen the gap with shorter term treasury bonds. The yield curve steepens to levels not seen since 2015. This a signal of confidence from investors in the ability for the economy to recover earlier than expected with many analysts projected a full recovery in the second half of this year. That confidence can also been seen in corporate bonds. High Yield Corporate Bonds (HYG) prices are climbing. Those higher risk bonds are being bough while safer Investment Grade Corporate Bonds (LQD) are being sold. Investors are confident in corporations being able to meet commitments on these bonds. The US Dollar (DXY) declined -0.62% for the week. Silver (SILVER) and GOLD (GOLD) both finished the week with gains. The real story with commodities is the two week rise of Crude Oil Futures (CRUDEOIL1!), Timber (WOOD), Copper (COPPER1!), and Aluminum (ALI1!). These are all key commodities required to support economic activity. Seeing the two week rise is a bullish sign for the recovering economy. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps I had a great conversation in the comments of the daily market update this week about the markets and the big four mega-caps. It reminded me how important it is to look at the weekly charts to see trends. Apple (AAPL) and Amazon (AMZN) have been somewhat disappointing as you watch the daily charts. You might think there is something wrong. However, taking a step back and looking at the weekly shows them still in uptrends, with higher lows closing in one the highs. As the price range narrows with lowering volume, you can expect a breakout in one direction or the other. Microsoft (MSFT) and Alphabet (GOOGL) already had their breakouts and continue to trade well above the key moving average lines. The performance of the big mega-caps has an impact on the indexes. The indexes influence investor sentiment and impact passive instruments including ETFs. Those all impact overall market prices. That's the reason to keep an eye on daily and weekly charts of these top four mega-caps. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.584, still at the level of overly bullish optimism. 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. The CNN Fear & Greed index moved more toward Greed level, but is not at an extreme level. Money managers moved back to a 110 leveraged level as measured by the NAAIM Exposure Index. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bumble IPO Bumble entered the market with an IPO on Thursday and ended the week with a 75% gain over the initial price of $43. Happy Valentine's Day to all the Bumble users and especially the Bumble investors this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Markets will be closed on Monday for the President's Day holiday. Tuesday will be lite on economic news with an update on Manufacturing data in the morning, FOMC Member Daly comments in the afternoon. Wednesday will have more important news with core producer price index data being released in the morning. The producer price index data can also be an early indicator of inflation so this data will be interesting to watch after last week's consumer price index data disappointed economists. Retail sales data, Industrial Production and weekly Crude Oil stock numbers will also be released on Wednesday. Thursday will bring Building Permits and Housing Starts data for January. The weekly update on Initial Jobless Claims will also come before market opens. Import/Export price data released on Thursday can impact the US dollar. There will be another update on Crude Oil Inventories later in the morning. Friday will finish the week with more Home Sales data and the Manufacturing and Service PMI data. The week will include a number of earnings reports, albeit at a slower pace from previous weeks. CVS Health (CVS), Occidental (OXY) and Avis (CAR) will be interesting to watch on Tuesday. Baidu (BIDU) and Synopsys (SNPS) report on Wednesday. Walmart (WMT) will be an important one to watch on Thursday. Be sure to check for scheduled earnings reports for stocks in your own portfolio. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Looking just at the equity markets, it's hard to argue with the statement made late on Friday. After a few days of back and forth, the market moved decidedly bullish headed into a three day weekend. Not only did investors not make defensive plays, they bought up assets at a discount relative to where they think prices will go next week. The impeachment trial is behind us. Congress is now free to focus in on legislating about bills that can help the economy, including the $1.9tn stimulus bill. Core CPI and consumer confidence and spending numbers released last week may look bleak. But the bright side of those numbers is that Americans are saving money at record levels. Americans don't save money. Eventually as confidence grows, that money is sure to be released into the economy, driving consumer prices higher and driving stock prices higher as well. The Fed made another affirmation this past week of keeping monetary policy in place for the foreseeable future. A short-term pullback or even small correction is sure to be limited by the asset purchases and low interest rates that will keep money in equity markets. The breakouts from Microsoft and Alphabet a few weeks ago are still in-tact. It seems any moment new breakout runs could come from Apple and Amazon. These four big mega-caps can carry the market to new highs and that momentum can spread across to a breadth of sectors and stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Investor optimism continues to remain at extreme highs. The put/call ratio is far in the overly bullish range. The CNN Fear & Greed index is moving higher. Money managers only moved out of leverage for one week and now the NAAIM index shows they are back in leverage again this week. All that optimism could be an overwhelming amount of froth that's just waiting for an excuse to see investors run for the exit. Parts of the stimulus, including the amount of checks and the number of citizens who will benefit from them, continues to be debated. Some of the optimism in the market depends on these checks getting out to as much of the population as possible and driving an increase in economic activity. If this part of the stimulus disappoints investors, it could be a reason to take profits from equities and move money to other asset classes. The media loves to uncover stories that show faults in the vaccine roll out. Whether its supply chain limitations or the effectiveness of the vaccine, any bad news has a negative impact on sentiment. As I noted several times in the daily updates, there is a lot of signal to say that investors are bullish, but have one foot out the door and ready to move out at the sign of any bad news. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side: Wednesday's high of 14,109.12 will be the first test. Another weekly high would be a great sign for a continued rally. Reaching 14,250 would keep moving the weekly highs along an upper channel line from the past few weeks. On the downside, there are several key levels to raise caution flags: 14,000 is now an area of support that held this past week. Staying above this line will make that support stronger. The low of the week this past week is 13,845.47. The 21d EMA is at 13,609.55. That is around 3.5% below Friday's close. The 50d MA is at 13,083.19. A violation of this line will be an added warning side. It has not been tested since 11/4. There is support at the 13,000 area, seen in the lows from the first weeks of January. Several possible areas of support at 12,550, 12,250, and 12,000. The 200d MA moved above the lows of October and is now about 20% below the index at 11,303.89. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up This week was an impressive fight between the bulls and the bears. Both sides of the market showed itself throughout the week. But in the end, the bulls won the fight. There's a lot of reason to believe the bull market will continue into next week. As investors come back from a three-day weekend, it's becoming increasingly likely that stimulus will pass in congress. Then it's on to a massive infrastructure bill that Biden wants to see congress pass. At the same time, it's important to realize the market is extended as it continues its rally. Many growth stocks that have been driving the indexes upwards are extended way beyond normal levels. Any news that would spook investors, could bring a pullback or small correction. Or an even bigger correction. It's always important to manage risk in your portfolio. Keep stop losses up to date and make sure you are comfortable with draw down that could occur. I write these reminders as much for me as I do for any readers of these updates. :) Happy Valentines Day! Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
57