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Daily Market Update for 11/30Trend lines drawn from the 10/30 bottom (21d), 11/23 (5d), and today 11/30 (1d). If you have ideas to make the daily update better, please let me know in the comments. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, November 30, 2020 Takin’ everythin’ in my stride Facts: -0.06% lower, Volume higher, Closing range: 79%, Body: 12% Good: Long lower shadow, filled gap but held support at 12,000 Bad: Dip in morning after a new all-time high Highs/Lows: Higher high, Lower low Candle: Outside day, 12% red body with long lower wick. Advance/Decline: 0.58, about three declining for every advancing stock Sectors: Technology (XLK +0.67%) and Health (XLV +0.27) were the only gaining sectors. Energy (XLE -5.53%) was the worst preforming. Expectation: Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Gap filled. 12,000 support held. New Intraday all-time high. The Nasdaq held a volatile session today that started with a new all-time high in the morning, but quickly turned down to fill the gap from Friday’s open and test the 12,000 support area. The good news is that it successfully held the support and closed not too far from the day’s highs. The bad news is it caused a lot of churn in many portfolios as there were 3 declining stocks for every 2 advancing stocks. The index closed with a small -0.06% loss, a sideways move that is not unexpected after last weeks gains. The closing range is 79% with a 12% body and a long lower wick that shows the bears ruled the morning, but the bulls saved the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX -0.46%), Dow Jones Industrials (DJI -0.91%) both fell for the day, but it was the Russell 2000 (RUT -1.91%) that felt the most pain. The RUT ended the day with a thick red-body candle and a 15% closing range. The RUT is still above its 10d MA and was due a pullback after the incredible gains over the last three weeks. Technology (XLK +0.67%) was the top sector of the day. Health (XLV +0.27%) led most of the day, but was passed by Technology in late afternoon trading. All other sectors had losses for the day. Energy (XLE -5.53%) fell back significantly after OPEC warned of immense challenges caused by the COVID-19 pandemic. The VIX volatility index decreased by -1.30%, continuing a downward trend and closing at its lowest point since February. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators US30Y and US10Y bond yields fell on Monday while the US30Y-US10Y and US10Y-US02Y spreads remained about the same. Corporate Bond yields rose slightly for the day and the Corporate bonds to Treasury bonds spread remained about the same. The US dollar (DXY +0.23%) gained back some of last week’s losses, but remains below a support area. Silver (SILVER -0.25%) and Gold (GOLD -0.60%) continued a downward trend that started at the beginning of November. Crude Oil Futures (CRUDEOIL1! -1.13%) ended the day with losses. Timber (WOOD -0.94%) fell back just slightly. The put/call ratio rose to 0.610 after hitting dangerous lows last week. The pullback in the market helped cool off some of the overly bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible reversal in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL +2.11%) finally broke out above the 21d EMA and 50d MA lines, after a couple weeks of consolidation. Microsoft (MSFT -0.54%), Amazon (AMZN -0.85%) and Alphabet (GOOGL -1.83%) all had losses but are all trading at or above the key moving average lines. Microsoft had a dip below the 50d MA, but recovered and closed above both the 50d MA and the 21d EMA. Most mega-caps had losses on the day. Pfizer (PFE +2.90%), Roche Holding (RHHBF +2.17%) and Apple were the only mega-caps to close with more than 2% gains. Growth stocks had a mix of results. Moderna (MRNA +20.24%) did not get the memo on the stock market pullback and shot up another 20%. Peloton (PTON +6.76%), Datadog (DDOG +2.59%) and Zoom Video (ZM +1.43%) were among pandemic stocks that had gains on the day. Zoom Video is down -5% after hours despite exceeding expectations in their earnings release. Chinese stock Autohome (ATHM -10.83%) was down significantly after beating expectations but missing on revenue in their earnings release before market open. Also, Chinese stocks NIO (NIO -6.43%), Alibaba (BABA -4.75%) and JD.com (JD -4.54%) also sold off significantly today. It could be related to the semi-annual MSCI rebalance which would impact passively indexed ETFs. The rebalance reduced exposure to Hong Kong stocks to make room for an upgrade of status to Kuwait and increase in India’s weight. It is not clear if that's the entire reason for the declines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead All eyes will be on Federal Reserve Chair Jerome Powell as he testifies before congress on the state of the economy, scheduled to start at 10am. Manufacturing data will also be released tomorrow giving an update on economic activity. There are no notable earnings reports tomorrow for this daily update. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance All three trend lines point to positive gains. The one-day trend points at the same point as the long-term trend from the 10/30 bottom. That would result in a +0.50% gain. The five-day trend is pointing to a +0.99% gain. Either result would be a new all-time high. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up There were three factors that impacted stocks today. First OPEC released comments from their meeting that said there were immense challenges on the horizon, impacting crude oil prices and the energy sector. The outlook and the rising challenges with the pandemic second wave also depressed travel, transportation, and leisure stocks. Pending New Home Sales and Chicago Purchasing Manufacture’s Index were less than expected and seemed to add to an already declining market. The declines accelerated before reversing at 10:45am on the Nasdaq. The final factor for today was the semi-annual index review of the MSCI which upgraded Kuwait to an emerging country and added to the weight of India. It seemed to have at least some impact on Chinese stocks as money rebalanced between the markets represented. Overall, the Nasdaq gave some signs of strength even as it closed with a loss for the day. The drop to fill the gap from last Friday did not come as a big surprise. The further dip tested the 12,000 support area and the index rose from there to get back to the top of the daily trading range. That should give some optimism for the week ahead, but further economic news is on the way, including comments from the Fed during tomorrow's Joint Economic Committee meeting. Take care!
NASDAQ:IXIC
by drewby4321
1
Market Week In Review - 11/23/2020 - 11/27/2020The 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 am making some changes to the chart presentation and renaming the series to reflect the other data points I'm including. Still based out of the Nasdaq composite. 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, November 23, 2020 Now take it in but don't look down Facts: +0.22% higher, Volume lower, Closing range: 55%, Body: 24% Good: Body and close in upper half of range Bad: Lower low after morning high Highs/Lows: Higher high, Lower low Candle: Body and close in upper half Advance/Decline: 1.39, more advancing than declining stocks Sectors: Energy (XLE +7.07%) was the top. Health (XLV -0.26%) and Real Estate (XLRE -0.32%) were at the bottom. Expectation: Sideways The Nasdaq continued its march sideways on Monday as the other indexes had gains and the Russell 2000 closed at another all-time high. Investors remain focused on small caps, energy, and industrials as a more positive outlook on the economy is supported by additional vaccine news to end the pandemic. The Nasdaq index closed up +0.22%, but still below 12,000, a resistance level it has been testing for over a week. Volume was just slightly lower than Friday. The outside day candlestick has a 24% negative body in the upper half of the range and a closing range of 55%. There were more advancing stocks than declining stocks as small caps in the index had gains while the larger caps weighed the index down. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, November 24, 2020 It's time to begin, isn't it? Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52% Good: Break through 12,000 on higher volume Bad: Nothing Highs/Lows: Higher high, Higher low Candle: Thick green body in upper half over a long lower wick Advance/Decline: 2.10, two advancing stock for every declining stock Sectors: Energy (XLE +5.14%) and Financials (XLF +3.50%) were top. Real Estate (XLRE -0.05%) was the only losing sector. Expectation: Higher The Nasdaq finally blew through the 12,000 resistance level today while the other indexes set new highs. The Dow Jones Industrial closed above 30,000 for the first time in its long history. The buying was broad with two advancing stocks for every declining stocks and included some recovery of the mega-caps after so much recent focus on small-caps. The Nasdaq closed with a +1.31% gain on higher volume. The 52% green body in the upper half of the wick resulted in a 93% closing range after the index hit a morning low and never looked back. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, November 25, 2020 You made me a believer, believer Facts: +0.48% higher, Volume lower, Closing range: 78%, Body: 43% Good: A new all-time high Bad: Nothing Highs/Lows: Higher high, Higher low Candle: Short candle, with even upper and lower wicks Advance/Decline: 0.98, about the same number of advancing and declining stocks Sectors: Utilities (XLU +0.26%) and Real Estate (XLRE +0.24%) were the top sectors. Energy (XLE -2.33%) was the worst performing. Expectation: Sideways After a long period of underperforming the other major Indexes, the Nasdaq finally had a day to shine. It closed at a new all-time high while the other indexes had inside days. Volume was lower and traders focused mostly on buying the pullbacks in mid-cap growth stocks. The index closed with a +0.48% gain with a closing range of 78% and most action contained within the middle of the candle. The 43% green body is surrounded by even length upper and lower wicks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, November 27, 2020 ‘Cause you’re a natural, a beating heart of stone Facts: +0.92% higher, Volume lower, Closing range: 63%, Body: 57% Good: Did not revisit morning lows, high closing range. Bad: Could not keep highs, after gap up opening Highs/Lows: Higher high, Higher low Candle: 43% upper wick on top of solid green body. No lower wick. Advance/Decline: 1.84, almost two advancing stocks for each declining stock Sectors: Health (XLV +0.92%) and Communications (XLC +0.64%) were top sectors. Energy (XLE -1.17%) was the worst preforming. Expectation: Sideways The short trading day after Thanksgiving brought a nice gain for the Nasdaq, but on lower volume. The index gapped up in the morning and had steady gains, until mid-morning brought some selling. It finally turned back to the positive just before close. The index finished up +0.92% with a closing range of 63% and a solid green body of 57%. There was no lower wick, but the 43% upper wick shows the selling that occurred after making a new all-time high. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The short week of trading ended with a +2.96% gain for the Nasdaq (IXIC), outperforming the S&P 500 (SPX +2.27) and the Dow Jones Industrial (DJI +2.21%) average. The Russell 2000 (+3.92%) is still outperforming everything as investors focus on small-caps. The major indexes set new all-time highs this week. The Nasdaq closed the week with a 92% closing range, having a positive gain every day of the week. Volume was lower than the previous week, but still higher than the 10 week moving average. That’s despite only 3.5 days of open markets. The week began with a focus on the surprise number of travelers at airports over the weekend. That gave a boost to Travel, Transportation, and Leisure stocks as well the Energy sector. American Airlines (AAL) gained 20% in two days. Carnival Corp (CCL) gained 17% in the same period. Marriott (MAR) gained 10%. Exxon Mobile (XOM) gained 13.5%. On Tuesday, the Consumer Confidence numbers came in less than expected but did not seem to phase the equity markets. It did impact the US Dollar which began a steady decline for the next several days. The declining value of the US Dollar was good news for the stocks of large multi-national companies. That resulted in the mega-caps having a great day and helping the Nasdaq to finally break above 12,000. Tuesday was not so friendly for mid-cap stocks, including many growth stocks. Money rotated out of mid-caps and into small, large, and mega cap stocks. Wednesday brought more bad news with the Initial Jobless Claims climbed higher than expected. The US Dollar dropped even more, hitting lows not seen since April 2018. However, growth stocks recovered from the previous day losses and the Nasdaq recorded a new all-time high. The other major indexes fell back a bit on Wednesday, having inside days. There was some movement to the Utilities sector at the end of the day to prepare for the market holiday. The markets were closed on Thursday and reopened Friday for a shortened trading day. As would be expected, volume in the market was lower. The Nasdaq closed at another all-time high. Energy (XLE) finished another week of huge gains and topped the other sectors for the past three weeks. The sector is up over 40% in the last three weeks. It did pull back a bit on Wednesday and Friday after Exxon Mobile put out a more pessimistic view on future demand. Financials (XLF) also sticks out as a winner for the week, far above the rest of the sectors. The worst performing sectors were Real Estate (XLRE) and Utilities (XLU). Utilities briefly emerged as a leader for Wednesday afternoon as investors parked money in the safe haven sector for the holiday. Technology (XLK) underperformed the S&P 500 index for a third week, which is odd in a week that the Nasdaq outperformed the S&P 500. US Treasury Bond Yields finished the week higher than the previous week but did take a step back in Friday trading. The yield spreads for the US30Y-US20Y and US10Y-US02Y both tightened. The longer term trend is still showing investors are more interested in riskier assets than parking money in low yield bonds. Investors did buy into Corporate Bonds this past week while short-term Treasury Bonds remained flat. The spread between these two widened, signaling optimism in the ability for businesses to pay back debts despite economic headwinds. The put/call ratio (PCCE) ended the week at an alarming level of 0.505, showing overly bullish sentiment in the market. 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 U.S. Dollar (DXY) lost -0.62% and closed the week below a support area after disappointing Consumer Confidence numbers and higher than expected Initial Jobless Claims. The weaker dollar gave a boost to large multi-national companies who can benefit from stronger performance in exports as well as more value in revenues being repatriated from foreign currencies. Silver (SLIVER) was down -6% for the week and Gold (GOLD) was down -4% for the week, impacted by the devalued dollar. Crude Oil was up +7.51% as demand continues to increase from summer lows. Timber (WOOD) is still in strong demand gaining another +2.64%. Soybean Futures is at its highest since 2016. Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN) finished the week with gains. Apple (AAPL) finished the week with a loss. Microsoft, Alphabet and Amazon continue to move sideways since making new highs in August. Weekly volume is still higher on down weeks than it is on up weeks. Alphabet is acting very differently than the other three, with higher volume weeks on gains and lower volume weeks as it has moved sideways the past two weeks. This could be a consolidation before another move higher. I like to keep an eye on the behavior of these four because of their significant influence over the broader indexes. What is the impact of a weakening dollar on these four mega-caps? For Microsoft and Google, it should give them a boost given how much of their business is in software and services that will not be impacted by increased costs in imports but will benefit from improved value in repatriated revenue. Amazon could be impacted by increased costs of foreign made products, but that may be offset by higher demand for domestic products. Apple seems to be the one that would be most negatively impacted by the weakening dollar, causing the costs of products manufactured overseas to increase in cost and reduce margins. Slack (WORK) gained almost 40% on Wednesday when Salesforce (CRM) announced they are exploring an acquisition of the popular office messaging app. That would create significant competition for Microsoft and other competitors. Delta (DAL) had a positive week after surprisingly high travel for Thanksgiving holidays. They also announced a deal with worker unions to reduce pay in exchange for job security through 2022. Tesla (TSLA) continues to rip upward in anticipation of being added to the S&P 500 on December 21st. The company has moved up five positions in the list of largest public companies by market cap. It is now the eighth largest company. After two days of significant gains, Exxon Mobil (XOM) pulled back after internal documents showed a pessimistic outlook for future oil demand and prices. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead The week will begin with OPEC meetings that could have an impact on Crude Oil prices and the Energy sector. Pending Home Sales data for October will be released on Monday. A disappointing result could put further downward pressure on the US Dollar. Manufacturing data released on Tuesday will show how much purchasing is happening in over 400 industrial companies to meet future demand. Look at a positive/negative impact in XLI. Finally, the week will end with more employment data. Expectations are for a lower Initial Jobless Claims which would be positive. But analysts expect payrolls data to decrease. A positive expectation breaker on these could give a boost to the US Dollar and signal better recovery than expected in the economy. Growth companies including Zoom Video (ZM), Salesforce (CRM), Veeva Systems (VEEV), Crowdstrike (CRWD), ZScaler (ZS), Restoration Hardware (RH), Marvel (MRVL), DocuSign (DOCU) will announce earnings this week. Big Lots (BIG) announces earnings on Friday; look for possible signals in guidance after last week’s Black Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The fed released minutes from their most recent meeting, showing they have no intention to end supportive measures of the markets. They will continue bond purchase programs, keeping bond yields low. That will keep money flowing to equities. They will also continue asset purchase programs, providing even more liquidity to equity markets. This remains the most bullish support for the market. All the major indexes have now cleared resistance and set new all-time highs. Without further overhead supply, demand for equities could continue driving prices higher. The longer the index can stay above this week’s highs, the more support that will be created at the current trading level, providing a pausing point if prices were to come back down. The support would provide more confidence to investors. Energy (XLE) continues to lead the sectors. This will not last forever but is a bullish sign for a recovering economy. Energy has been the leading sector coming out of most major corrections in the market. Eventually other themes will emerge among the sector list and new market leaders will be established. In the near term, the oil companies still lag improvements in oil prices and overall increased demand. There is more upside here in the short term as sectors recover from summer lows. A vaccine to COVID could be released in early December. It is reported that major airlines are chartering flights to transport the vaccine as quickly as possible to frontline workers and medical staff. Once the vaccine is released, this could provide more upside momentum for markets already buoyed by stimulus. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The amount of optimism in the market right now is extremely high. The put/call ratio is nearing dangerous lows (meaning high bullish sentiment) that typically signal a correction is in order. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction. It is on a downward trend at 0.505 closing this week. The CNN Fear & Greed index is at 92, the highest level since February of this year. Another contrarian index, the CNN number is usually at its highest right before corrections. Consumer Confidence and Initial Jobless Claims data this week showed the impact of more lockdowns in the prolonged pandemic. This news could get worse this week as numbers of cases are expected to rise after the Thanksgiving holiday and hospitals become even more overwhelmed with patients. The anticipation of a vaccine could be a moment of “buy the rumor, sell the news”. When the vaccine is finally released, it could have the opposite impact after the market already priced in the eventual release over the past few weeks. The Fed has signaled that changes in economic conditions, impacted by the pandemic, could be reason for monetary policy changes. Any reduction in support from the Fed could cause an oversized reaction from the market. -=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: Look for the Nasdaq to keep near or above the all-time high set last week of 12,236.23. The next round-number resistance could come at 12,500 or 13,000. Round-number resistance is caused by traders tendency to put in sell orders at round numbers. On the downside, there are several key levels to raise caution flags: Friday’s low of 12154.57 is above a gap that may need to be filled back to 12,114.77. November support area is at 12,000 and a round-number point. Staying above this area is critical to continue the upward trend. The 21d EMA is at 11790.66. The index has closed above this moving average line for 17 trading days. The 50d MA is at 11,467.81. This line is at the October support area and about 6% below Friday’s close. The low of Thursday, Nov 4 is at 11,394.21. There is a gap to fill below that line. September Support line is at 11,300. Dropping to this level would be a sure sign of correction. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The market had a significant rotation again this past week. Instead of a rotation among sectors or growth vs value, it was a rotation from mid-cap stocks to small-caps and large-caps, including mega-caps. The rotation seemed to result from the weakening of the US Dollar, moving investors to larger multinationals. But investors also continued to move toward small-caps which should benefit the most from economic recovery. Mid-caps took on the damage as the money rotated away from them. As with most rotations, the pendulum swung too far and mid-caps recovered nicely on Wednesday and Friday. Friday’s positive results are tempered by the lower volume and shorter trading day. Look for a stronger signal on Monday for market direction. Watch out for impact of “buy the rumor, sell the news” on both the vaccine as well as finalizing the election results. While staying invested to profit from market momentum, be sure to keep stop losses in play to protect from sudden changes. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 11/27Trend lines drawn from the 10/30 bottom (20d), 11/20 (5d), and today 11/27 (1d). If you have ideas to make the daily update better, please let me know in the comments. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, November 27, 2020 ‘Cause you’re a natural, a beating heart of stone Facts: +0.92% higher, Volume lower, Closing range: 63%, Body: 57% Good: Did not revisit morning lows, high closing range. Bad: Could not keep highs, after gap up opening Highs/Lows: Higher high, Higher low Candle: 43% upper wick on top of solid green body. No lower wick. Advance/Decline: 1.84, almost two advancing stocks for each declining stock Sectors: Health (XLV +0.92%) and Communications (XLC +0.64%) were top sectors. Energy (XLE -1.17%) was the worst preforming. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The short trading day after Thanksgiving brought a nice gain for the Nasdaq, but on lower volume. The index gapped up in the morning and had steady gains, until mid-morning brought some selling. It finally turned back to the positive just before close. The index finished up +0.92% with a closing range of 63% and a solid green body of 57%. There was no lower wick, but the 43% upper wick shows the selling that occurred after making a new all-time high. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX +0.24%) ended the day with a doji candlestick where the open and close are very close to each other. The Dow Jones Industrials (DJI -0.13%) had inside days the past two days, trading within the range of Tuesday’s huge gains. The Russell 2000 (RUT +0.56%) continues to trade near all-time highs after a slight pullback on Wednesday. The patterns show a bit of indecision in the market, but also come during light trading during the holidays. Health (XLV +0.92%) emerged as the leading sector late in the morning. Technology (XLK +0.53%), Communications (XLC +0.64%) and Materials (XLB +0.52%) all traded the top spot before Health passed them. All other sectors had losses for the day with Energy (XLE -1.17%) ending the day as the worst performing sector. The VIX volatility index decreased by -1.93%, continuing a downward trend and closing at its lowest point since February. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators US30Y and US10Y bond yields fell on Friday and the US30Y-US10Y and US10Y-US02Y spreads both tightened. Corporate Bond yields dropped for the day and the Corporate bonds to Treasury bonds spread tightened. The US dollar (DXY -0.22%) dropped below a support area and is at its lowest point since April, 2018. Silver (SILVER -2.71%) and Gold (GOLD -1.14%) continued a downward trend that started at the beginning of November. Crude Oil Futures (CRUDEOIL1! +1.20%) rose for the day. Timber (WOOD +0.51%) increased for the day. The put/call ratio dropped to 0.505 and is showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible reversal in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All four of the big mega-caps closed the day with gains. Microsoft (MSFT +0.64%), Amazon (AMZN +0.32%) and Alphabet (GOOGL +1.3%) all traded above the key 21d EMA and 50d MA lines. Apple (AAPL +0.48%) temporarily traded above the lines but pulled back to close under the 21d EMA. Only Alphabet outperformed the broader index. About half of the mega-caps in the market closed with gains. Tesla (TSLA +2.05%) turned in another day of gains. Pfizer (PFE +1.92%) also closed with significant gains, buoying the health sector results. Growth stocks also had a good day. Moderna (MRNA +16.35%) and ETSY (ETSY +10.66%) were among the stellar breakouts. Cloudflare (NET +6.82%), Zoom Video (ZM +6.29%), Draft Kings (DKNG +5.02%) were among several other growth stocks benefiting from a positive trading day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Monday will be the first full day of trading after the holidays. An OPEC meeting is scheduled for 5:00 EST on Monday and could have some impact on Oil as well as the Energy sector. Pending Home Sales for October will also be announced in the morning. Further impact to the US Dollar could result from a miss in expectations. Zoom Video is among a small list of companies announcing earnings after market close. Autohome (ATHM +3.98%) is a Chinese stock that will announce earnings before open. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The trend lines all point to about the same spot just around today’s all-time high. If the market continues the trend from the 10/30 bottom and the five-day trend, it will result in a +0.27% gain. The one-day trend points to just under that point for a -0.02% loss. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The shortened day of trading resulted in some good gains on lower volume. Investors remain extremely optimistic and history says to be cautious whenever the market is overly optimistic. However, there are reasons to believe we could still see gains as the Fed continues measures to support the economy. Growth stocks will benefit from that momentum and large multi-nationals will benefit from a weakening dollar. It’s a good time be in the market to profit from the gains but keep stop losses in place to protect from potential swings to the downside. Take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 11/25Trend lines drawn from the 10/30 bottom (19d), 11/19 (5d), and today 11/25 (1d). If you have ideas to make the daily update better, please let me know in the comments. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, November 25, 2020 You made me a believer, believer Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52% Good: A new all-time high Bad: Nothing Highs/Lows: Higher high, Higher low Candle: Short candle, with even upper and lower wicks Advance/Decline: 0.98, about the same number of advancing and declining stocks Sectors: Utilities (XLU +0.26%) and Real Estate (XLRE +0.24%) were the top sectors. Energy (XLE -2.33%) was the worst performing. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview After a long period of underperforming the other major Indexes, the Nasdaq finally had a day to shine. It closed at a new all-time high while the other indexes had inside days. Volume was lower and traders focused mostly on buying the pullbacks in mid-cap growth stocks. The index closed with a +0.48% gain with a closing range of 78% and most action contained within the middle of the candle. The 43% green body is surrounded by even length upper and lower wicks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX -0.16%), Dow Jones Industrials (DJI -0.58%) and Russell 2000 (RUT -0.46%) all took a step back while the Nasdaq had its day to shine. Each of the indexes that pulled back did so within the previous days range. An inside candle (the high and low is contained within the high and low of the previous day) after a strong trend is often in a continuation pattern, so I would expect these indexes to pick up with their uptrends in the next week. Utilities (XLU +0.26%) was the top performing sector of the day, with a surge in buying in the last hour of trading. Utilities is a haven within equities and some investors wanted to park their money there during the holiday. Technology (XLK +0.21%) spent most of the day as the top sector before being passed by Utilities at the end of the day. Energy (XLE -2.33%) pulled back from massive gains over the past few weeks and ended the day as the worst performing sector. Energy is still way ahead of the other sectors on gains for the week. The VIX volatility index decreased by -1.80%, continuing a downward trend. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators The US30Y yield increased +1.11% while the US10Y decreased by -0.55%, expanding the US30Y-US10Y spread, a long-term bullish view for the economy. The US10Y-US02Y spread contracted a bit, showing maybe a bit of bearish outook for the short term. Corporate Bond yields gained for the day with the spread between Treasury and Corporate bonds tightening. Both indicators are still at bullish levels compared to earlier in the year. The US dollar (DXY -0.25%) hit a new low for the year and is at its lowest point since April, 2018. Silver (SILVER +0.43%) and Gold (GOLD +0.02%%) paused from the downward trend from the past two weeks. Crude Oil Futures (CRUDEOIL1! +2.01%) rose on positive Crude Oil Inventory news. Timber (WOOD -0.47%) pulled back from recent gains. The put/call ratio rose to 0.521 but still showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a reversal in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Amazon (AMZN +2.15%) closed the day with gains that brought it above its 21d EMA and 50d MA. Apple (AAPL +0.75%) also gained for the day, closing above its 50d MA. It tested the 21d EMA, but sold off after touching the line. Microsoft (MSFT +0.0%) closed even with yesterday’s close after a gap up at open turned into a test of its 21d EMA. Alphabet (GOOGL +0.01%) also closed even with yesterday after a choppy trading session. Apple and Amazon outperformed the market while Microsoft and Alphabet underperformed. PayPal (PYPL +4.11%) was the top performing mega-cap for the day while Tesla (TSLA +3.35%) continues to add to recent gains. Growth stocks recovered nicely from yesterday’s rotation. Many of the stocks that sold off yesterday were back in the game today. ETSY (ETSY +5.44%), Pinterest (PINS +5.29%), Cloudflare (NET +4.94%) and Square (SQ +4.94%) were among the top winners. Moderna (MRNA +10.78%) closed the day with a huge gain after analysts upgraded price targets. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow is Thanksgiving and markets will be closed. Friday markets will continue trading but the trading day will end at 1pm. There is no economic news or significant earnings announcements planned for Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The current set of trend lines are all pointing at positive gains for Friday. When they all land in a similar area, I typically draw attention to the longest trend line. That is the trend from the 10/30 bottom which points to a +0.87%. The five-day trend is pointing to a 0.19% gain and the one-day trend lands in the middle. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Initial Jobless Claims data released today was higher than expected, putting some caution into investors minds about the near-term economic recovery. Still investors seem confident in US corporation’s ability to weather the storm and are bullish on the mid to long-term. The pullback in the major indexes is warranted given the aggressive climb to new highs. The fall to new lows for the US Dollar is something to keep an eye on. A bit weaker dollar can be a boon for large multi-national companies and could bring a healthy level of inflation to the US economy. However, if it continues to fall, expect some action by foreign central banks to keep currencies balanced and protect their own economies from trade impact. Have a great Thanksgiving and Take care!
NASDAQ:IXIC
by drewby4321
1
Daily Market Update for 11/24Trend lines drawn from the 10/30 bottom (18d), 11/18 (5d), and today 11/24 (1d). If you have ideas to make the daily update better, please let me know in the comments. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, November 24, 2020 It's time to begin, isn't it? Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52% Good: Break through 12,000 on higher volume Bad: Nothing Highs/Lows: Higher high, Higher low Candle: Think green body in upper half over a long lower wick Advance/Decline: 2.10, two advancing stock for every declining stock Sectors: Energy (XLE +5.14%) and Financials (XLF +3.50%) were top. Real Estate (XLRE -0.05%) was the only losing sector. Expectation: Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The Nasdaq finally blew through the 12,000 resistance level today while the other indexes set new highs. The Dow Jones Industrial closed above 30,000 for the first time in its long history. The buying was broad with two advancing stocks for every declining stocks and included some recovery of the mega-caps after so much recent focus on small-caps. The Nasdaq closed with a +1.31% gain on higher volume. The 52% green body in the upper half of the wick resulted in a 93% closing range after the index hit a morning low and never looked back. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The Russell 2000 (RUT +1.94%) remains the leading index setting daily all-time highs. The Dow Jones Industrial (DJI +1.54%) closed above 30,000 for the first time in its history. The S&P 500 (SPX +1.62%) also outperformed the Nasdaq on a great day for all the indexes. Energy (XLE +5.14%) was the top sector again on Tuesday. Financials (XLF +3.50%) also did very well. Materials (XLB +2.49%), Communications (XLC +2.05%), and Industrials (XLI +1.75%) all outpaced the S&P 500. Real Estate (XLRE -0.05%) was the only sector to have a loss for the day. The VIX volatility index decreased by -4.50%, hitting its lowest intraday level since August. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators Both yields and spreads rose for the US 30-year and US 10-year Treasury bonds. Corporate Bond yields fell for the day as investors are seeing more positive signs for economic recovery. The US dollar (DXY -0.37%) fell back and is testing recent lows from August. The currency is likely being impacted by lower than expected Consumer Confidence numbers. Silver (SILVER -1.45%) and Gold (GOLD -1.64%) continued to slide lower. Crude Oil Futures (CRUDEOIL1! +4.32%) is at its highest since August. Timber (WOOD +1.62%) also ended the day with gains. The put/call ratio dropped to 0.505 showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a reversal in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL +1.16%), Microsoft (MSFT +1.78%), Amazon (AMZN +0.63%) and Alphabet (GOOGL +2.10%) all had gains for the day. Apple was unable to close above the 50d MA while Microsoft broke through and closed above both the 50d MA and 21d EMA. Amazon continues to trade just below the 21d EMA as the line has been acting as resistance for the stock recently. Most mega-caps had gains for the day. Tesla (TSLA +6.43%) continued to rise on the way to being added to the S&P 500. Banc of America (BAC +5.81%) and JPMorgan Chase (JPM +4.62%) helped drive the Financials sector gains. Walt Disney (DIS +3.77%) had another day of big gains. Growth stocks were mixed with many growth investor portfolios not benefiting from the day’s gains. Companies like Tesla and PayPal (PYPL +2.58%) had gains. Other recent favorites such as Fiverr (FVRR -2.63%), NIO (NIO -3.38%), SNAP (SNAP -2.14%), Pinterest (PINS -2.68%) had losses for the day. Rotations are common during rallies, but never fun unless your stocks are the direction of the rotation. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow is the last full day for the markets this week. Thursday the markets will be closed and Friday they will only be open until 1pm. Wednesday will bring updates on Initial Jobless Claims which will give a view of the continuing impacts from the pandemic on employment. Core Durable Goods Orders will give a look into manufacturing activity. The monthly GDP update also comes tomorrow which could have further impact on the US Dollar. There are only a few earnings reports tomorrow, none that are notable for the daily update. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index finally closed above the resistance area at 12,000 and I removed the long trend line from the 10/12 pivot day. If the trend continues today, the index could meet up with the trend from the 9/30 bottom at +1.07% and set a new all-time high. A small pull back to the 5d trend line would result in a -0.50% decline. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The lower than expected Consumer Confidence data did not phase the markets today. In fact, the data could be a reason the US Dollar declined in value causing large global mega caps to rise in price, driving the DJI to new record levels. But that did not come at the expense of small caps with the RUT still outperforming all the other indexes. One more full day of trading this week. Will investors rush to safe havens in Utilities (XLU) like they have the last few weekends, or hold onto assets through the holiday weekend? Take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 11/23Trend lines drawn from the 10/13 pivot day (31d), 10/30 bottom (17d), 11/17 (5d), and today 11/23 (1d). If you have ideas to make the daily update better, please let me know in the comments. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, November 23, 2020 Now take it in but don't look down Facts: +0.22% higher, Volume lower, Closing range: 55%, Body: 24% Good: Body and close in upper half of range Bad: Lower low after morning high Highs/Lows: Higher high, Lower low Candle: Body and close in upper half Advance/Decline: 1.39, more advancing than declining stocks Sectors: Energy (XLE +7.07%) was the top. Health (XLV -0.26%) and Real Estate (XLRE -0.32%) were at the bottom. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The Nasdaq continued its march sideways on Monday as the other indexes had gains and the Russell 2000 closed at another all-time high. Investors remain focused on small caps, energy, and industrials as a more positive outlook on the economy is supported by additional vaccine news to end the pandemic. The Nasdaq index closed up +0.22%, but still below 12,000, a resistance level it has been testing for over a week. Volume was just slightly lower than Friday. The outside day candlestick has a 24% negative body in the upper half of the range and a closing range of 55%. There were more advancing stocks than declining stocks as small caps in the index had gains while the larger caps weighed the index down. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The Russell 2000 (RUT +1.85%) soared again to close at all-time highs. In the past week it surpassed the Nasdaq to be the index with the highest gains since March lows. This is the small-cap rally. The S&P 500 (SPX +0.56%) and Dow Jones Industrial average (DJI +1.12%) also outperformed the Nasdaq today. Energy (XLE +7.07%) is back as the leading sector kicking off the week with a massive gain from news that the amount of Thanksgiving travel exceeded expectations. Utilities (XLU +0.02%) which seemed to be getting more attention late last week, faded back to underperformance. Health (XLV -0.26%) and Real Estate (XLRE -0.32%) were the worst performing sectors of the day. The VIX volatility index decreased by -4.39%, a good sign to start what could be a bullish week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators US 30-year and 10-year Treasury bond yields rose, and spreads widened for the day as investors moved money back to equities. Corporate Bond yields fell for the day. Another sign investors are positive on US companies ability to survive, if not recover from the pandemic economy. The US dollar (DXY +0.17%) strengthened for the day. Silver (SILVER -2.25%) and Gold (GOLD -1.71%) continued to slide after last weeks declines. Crude Oil Futures (CRUDEOIL1! +2.11%) gained for the day. Timber (WOOD +0.96%) also ended the day with gains. The put/call ratio rose slightly to 0.546, still a low number that will hopefully rise and show a bit more caution by investors. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a reversal in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL -2.97%) ended a very bearish day closing underneath its 21d EMA and 50d MA, key moving average lines. Microsoft (MSFT -0.13%) and Amazon (AMZN -0.03%) closed with minor losses and are trading below the two moving average lines. Google (GOOG -0.42%) also had losses but closed above its 21d EMA and 50d MA. All four of the mega-caps underperformed the market. It was not all bad for mega-caps with just over half closing with gains. Tesla (TSLA +6.58%) continued to gain in anticipation of being added to the S&P 500. Walt Disney (DIS +3.48%) and Taiwan Semiconductor Manufacturing (TSM +2.94%) were among the top mega-cap performers. Growth stocks generally had a good day. NIO Inc (NIO +12.45%) made a new all-time high. Square (SQ +6.03%) and PayPal (PYPL +4.23%) rose on optimism for a strong season for retail. RIOT (RIOT +20.60%) made another huge advance. Zoom Video (ZM -2.12%) fell back and continues to trade up and down with pandemic news. NIU Tech (Niu -9.10%) sold off on disappointing earnings news. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow, Consumer Confidence numbers will be released. Forecast is a slight decrease. A surprise here could further drive gains in retail stocks that have done well after a strong earnings week. Technology companies Dell Technologies (DELL +1.52%), HP Inc. (HPQ +3.62%), Autodesk (ADSK +0.93%) and VMWare (VMW +-/77%) will announce earnings. Also on Tuesday, several Retailers including Gap Inc (GPS +6.93%), Dollar Tree (DLTR +2.78%), Best Buy (BBY +2.43%) and Burlington Stores (BBY +2.43%) will release earnings updates. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index remains below the 10/12 pivot high and the 12,000 November resistance area. A +2.19% would get it past that area and to new all-time highs. That would rejoin the trend line from the 10/30 bottom. The five-day and one-day line have been pointing sideways for most of the past week’s daily updates. They now point to a +0.05% gain. The trend line from the 10/12 pivot day is pointing to a -1.00%. If the index can close above the 10/12 pivot day high, then I’d remove this trend line moving forward. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a good start to the week, despite the Nasdaq index and QQQ ETF being weighed down by underperformance of the largest mega-caps. The theme for this rally is clearly in small-caps and recovering sectors such as Energy, Transportation and Travel. Retail also has the momentum as the holiday season approaches. Consumer Confidence could add more momentum or put a damper on the rally. Still, there are lots of great stocks and setups to pick from. Happy trading and have a great week! Take care!
NASDAQ:IXIC
by drewby4321
1
Market Week In Review - 11/16/2020 - 11/20/2020The 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 am making some changes to the chart presentation and renaming the series to reflect the other data points I'm including. Still based out of the Nasdaq composite. 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 larger view on the past week What's coming in the next week Key index levels to watch out for Wrap-up If you have been following my daily updates, you can skip down 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=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, November 16, 2020 Take my hand We're off to never never-land Facts: +0.80% higher, Volume higher, Closing range: 89%, Body: 63% Good: Recovered from mid-day dip to finish near highs Bad: Not much, solid day Highs/Lows: Higher high, higher low Candle: Thick green body, tiny upper wick. Advance/Decline: 2.39, almost 5 advancing stocks for every 2 declining stocks Sectors: Energy (XLE +6.58%) and Energy (XLE +6.58%) at the top (yes, I counted it twice). Health (XLV -0.19) is the only sector with a loss. Expectation: Higher The Nasdaq started the week off with a decent gain that showed a positive reaction to comments from the November FOMC meeting. FOMC committee members Daly and Clarida made public comments around 14:00pm that monetary policy, including quantitative easing and interest rates, would remain the same while watching the economy closely. Investors responded positively to the remarks as the indexes pivoted back toward highs of the day. The Nasdaq ended up +0.80% for the day with a 63% green body and an 89% closing range. Volume was higher than the previous day. The candle is mostly body with a lower wick formed from opening levels and a short upper wick from closing near the daily highs. The index closed just under the 10/12 pivot high, a key line to watch for resistance later this week on the way to a new all-time high. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, November 17, 2020 When I’m without it The more that I want it Facts: -0.21% lower, Volume lower, Closing range: 48%, Body: 14% Good: Higher high, Higher low trend continues Bad: Resistance, Could not break into 12,000 Highs/Lows: Higher high, higher low Candle: Indecision candle with open and close in a tight range Advance/Decline: 1.09, just slightly more advancing stocks Sectors: Energy (XLE +1.02%) and Real Estate (XLRE +0.05% at the top. Utilities (XLU -1.96%) is the worst performing. Expectation: Sideways Today the Nasdaq had a lot of back and forth but within a tight trading range. After shaking off lower than expected retail sales growth, the index grew to a higher high than the previous day. But later in the day sold off perhaps due to dire economic outlooks from FOMC members and the Fed’s Jerome Powell. At the end of the day, the index closed at a -0.21% loss with a small 14% red body and a closing range of 48%. Even though volume was lower than the previous day, its higher than the recent average and shows the undecided outcome between bulls and bears for the day. The index was unable to approach the 10/12 pivot-day high and resistance point, something that needs to happen to keep the rally alive. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, November 18, 2020 I'm only happy when it rains Pour your misery down Facts: -0.82% lower, Volume higher, Closing range: 1%, Body: 66% Good: Nothing Bad: Character change, break from trend Highs/Lows: Lower high, lower low Candle: No lower wick, long red body Advance/Decline: 0.63, 3 declining stocks for every advancing stock Sectors: Industrials (XLI -0.45%), Consumer Discretionary (XLY -0.68%) were best performing. Energy (XLE -2.91%) and Utilities (XLU -1.96%) were worst performing. Expectation: Lower The market ended today with a character change, raising questions about where it may go in the near term. The competing optimism and pessimism with the pandemic and economy led to a day and a half of indecision which finally turned to a downside move at the end of Wednesday. The character change is noted and will follow closely over the next few days. The index closed with a -0.82% loss on higher volume. The candle has a red body of 66% and a closing range of 1%, leaving no bottom wick. There were 3 declining stocks for every 2 advancing stocks on the index. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, November 19, 2020 'Cause I try and I try and I try and I try Facts: +0.87% higher, Volume higher, Closing range: 95%, Body: 83% Good: Bullish all day, close at top of range Bad: Did not beat yesterday’s high Highs/Lows: Lower low, lower high Candle: Very tiny wicks, thick green bullish day Advance/Decline: 1.86, almost 2 advancing stocks for every declining stock Sectors: Energy (XLE +1.64%) and Technology (XLK +0.81%) were top performing. Utilities (XLU -1.00%) was worst performing. Expectation: Sideways or Higher After yesterday’s late afternoon change in character, the market reversed back to the behavior from the previous several days: modest gains, focus small-caps, energy as the leading sector and rising breadth across advancing stocks. The only thing that did not occur is a higher high and higher low, something to look for on Friday. The Nasdaq closed Thursday with a +0.87% gain and a 95% closing range. The 83% green body and +12.7% increase in volume represented the very bullish day after a small dip at market open. There were just under 2 advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, November 20, 2020 We may lose, and we may win Though we will never be here again Facts: -0.42% lower, Volume higher, Closing range: 3%, Body: 45% Good: Higher high, Higher low Bad: Sold in afternoon, close at the day’s lows Highs/Lows: Higher high, Higher low Candle: Body in lower half of candle Advance/Decline: 1.10, about even advancing and declining stocks Sectors: Utilities (XLU +0.02%) was the only gaining sector. Technology (XLK -1.03%) was the worst performing. Expectation: Sideways or Lower The market showed signs of nervous investors today likely from a disagreement between the Treasury Department and the Fed. That nervousness turned into a sell-off in the afternoon that ended with the index at its daily lows. We did get the higher high and higher low that I hoped for in yesterday’s update. There were also bright spots among some growth stocks with just over half of stocks in the Nasdaq ending the day with gains. Otherwise, it was a disappointing end to a very sideways week which closed almost exactly where it opened. The index ended today with a -0.42% loss on slightly higher volume than yesterday. The closing range of 3% and the 45% body in the lower half of the candle show the gains in the morning were lost in the afternoon. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The week ended almost exactly where it started. A weekly doji candlestick representing a trading range of about 1.5% shows how tightly the market traded to complete an inside week and close within the 0.55% range of the last three weekly closes. Even as the other indices made new highs, the Nasdaq could not find its way above 12,000 which is now an area of resistance. The index closed with just a +0.22% gain, a 50% closing range, and a thin 4.2% green body. Weekly volume was at its highest since June. At the start of the week, investors shrugged off any bad news, encouraged by updates on vaccines, positive Retail earnings results, and the continuing Fed monetary policy of low interest rates and quantitive easing. That sentiment started to change late on Tuesday after negative outlooks shared by the FOMC and the Fed’s Jerome Powell. Tuesday’s candlestick showed indecision. The decision for the market was apparent on Wednesday with a sharp sell-off late in the day and several signals of a character change. But then a positive expectation breaker came on Thursday even amidst worsening employment data. It did not last long. Friday took a turn for the worse in the afternoon with nervous investors reducing positions and selling into the close. Energy (XLE) was the big winner of the week for the second week in a row. Additional positive vaccine news signaled the possibility of several sectors recovering and driving demand for oil and gas. Although ending the week with the most gains, it did briefly pullback on Wednesday as the market started to shift. After a poor performance last week, the Technology (XLK) sector tracked closely to the performance of the S&P 500 index. Utilities (XLU) performed the worst this week, although it was the best performing sector during Friday trading. Health Care (XLV) also did not have a great week, spending much of the week as the worst sector until the honor was passed to Utilities. US Treasury Bond Yields were down for the week as investors bought the safe haven instruments. US30Y-US10Y and US10Y-US02Y spreads both tightened. Although some movement to bonds is clear, it is not yet significant to cause concern and prices are still in a downward trend. Corporate bond yields also declined for the week (prices go up, yields go down). However, the spread between treasury bonds and corporate bonds widened showing investors prefer the corporate bonds and trust companies can weather economic pressures. If the opposite were true, you’d see more selling of corporate bonds and prices going down. The put/call ratio ended the week at an alarming level of 0.535. A contrarian indicator, a put/call ratio below 0.7 signals overly bullish sentiment which typically proceeds a pullback. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction. The U.S. Dollar weakened for the week but is still above a support level which has held since summer. A weaker dollar could help global companies and will eventually lead to inflation which the Fed wants to see as a healthy economic indicator. However, it is not likely foreign banks will allow their currencies to appreciate as the dollar weakens and would counter with their own QE adjustments. It is something to keep an eye on as the pandemic continues its global economic impact. Silver was down for the week. Gold was flat. Crude Oil is closing in on new highs since the March crash. The other commodities have seen huge gains in prices over that last several weeks. The WOOD ETF is up 70% from March lows. Except for Google, the four big mega-caps are trending down with lower highs and lower lows. Much of the focus the last two weeks has gone to small-cap stocks and at times rotating back into pandemic growth stocks. Google and Apple ended the week above the key 21d EMA and 50d MA lines. But Microsoft and Amazon closed below the two key indicator lines. All of them underperformed the Nasdaq index for the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The biggest bullish support for the market right now is the continuation of quantitive easing from the Fed. Keeping interest rates low, holding bond yields down while also making asset purchases provides a tremendous amount of support to the equity markets. Those low interest rates are also supporting higher than expected Housing Starts and Existing Home Sales. Low interest rates reduce costs for existing corporate debt are driving record activity among businesses to borrow either for survival or for acquisitions of other companies. Although the index could not surpass 12,000, it held up above the 11,700 area and traded within a tight range. The last three weeks closed within a 0.55% range creating a bullish three-weeks tight pattern with increasing volume. It shows to me that investors are in a wait-and-see pattern. There is not a balanced amount of selling and buying. Any sell-offs have been bought back as investors “buy the dip”, shift positions for future growth, and wait for a turn in economic news, release of the vaccines or closure to the elections. I have talked in the past that Energy (XLE) very often leads the sectors out of a significant correction. You can go back and compare sector performance during major corrections and see that at least for a few weeks, Energy leads. And it makes sense for this economy that Energy will lead back to health given the number of sectors that depend on Oil and Gas as they recover. Energy has led the sectors for the past two weeks. It took a significant hit Wednesday on investor fear. However, it is still back in the lead. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side On the bearish side, the disagreement between the Treasury and the Fed was a surprise on Thursday as the Treasury said several emergency lending programs would be allowed to expire at the end of the year. Although the programs have gone under-utilized it was a safety net for companies which gave confidence to investors. But it was also the Treasury and Fed working together to support the economic recovery. If they start to disagree as we wait for a new administration, this could be a big risk for the short-term. Another bearish surprise for this week was the Initial Jobless Claims which rose for the first time since September. Companies are reducing staff again, preparing for what could be an extended lockdown during the holidays. Its unknown what impact the lockdowns will have on Retail sales. So far, retailers (even brick-and-mortar retailers) have seemed to weather the pandemic well. At the end of this week, investors stayed in equities but moved back to the safe-haven Utilities (XLU) sector. There was also a resurgence in prices for pandemic growth stocks – businesses that thrived during the first lockdowns. The combination means investors could be anticipating more downside for the overall market in the coming weeks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Next week is Thanksgiving which means we will be light on economic news and earnings reports, but there are still some significant ones to watch. The market will be closed on Thursday and will close early at 1pm on Friday. Probably the most important economic numbers will be Consumer Confidence released on Tuesday and more employment data on Wednesday. Core Durable Goods Orders on Wednesday will give a heads up on manufacturing activity. Several Chinese companies will release earnings before market open on Monday. Electric scooter manufacturer Niu (NIU) and smartwatch maker Huami (HMI). On Tuesday, technology companies such as Dell Technologies (DELL), HP Inc. (HP), Autodesk (ADSK) and VMWare (VMW) will announce earnings. Also on Tuesday, several Retailers including Gap Inc (GPS), Dollar Tree (DLTR), Best Buy (BBY) and Burlington Stores (BBY) will announce earnings. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side: 11965.54 is the 10/12 pivot day high and currently putting resistance on the index. We hoped for a pass over this line this past week and will continue to look for it as the first test for next week. Passing 12108.87 is the new all-time high. The index was only there briefly on Monday before selling-off. On the downside, there are several key levels to raise red flags, many similar to what we watched for last week: Thursday’s low of 11,760.98 is the bottom of the tight trading channel for this past week. The 21d EMA is at 11663.02. We could see a test of this line before moving hire. Going below it would be a signal of weakness. The low on 11/10 of 11,424.61. Dropping this low would start to test October support. The low of Thursday, Nov 4 is at 11,394.21. There is a gap to fill below that line. October Support line is at 11,400 and just above the 50d MA of 11,387.61. September Support line is at 11,300. The next area to watch is the July support area at 10,600. Approaching that area would be a significant pullback of 10% and certainly put the market back into correction status. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up If you look back to the beginning of November, the market had several days in a row of significant gains and gap up opens to reach a new all-time high. Those accelerated gains on top of the rotations that occurred in the past two weeks require some pause for the index which is exactly what we got this past week. The uncertainty around the election and transition period for a new administration are putting oil on the fire of more pandemic lockdowns and higher unemployment. Expect more swings in prices and rotations as investors try to decide what sectors will benefit and what sectors will suffer from news. Typically, there will be an initial overreaction and money will rotate back to stocks and investments that are steadily doing well. The more important thing to watch for is a breakdown in support. If more setups are failing and more stop losses kicking in, then its time to reduce exposure and raise cash. Good luck, stay healthy and trade safe! Happy Thanksgiving!
NASDAQ:IXIC
by drewby4321
3
THE WEEK AHEAD: GPS EARNINGS; KRE, XLE, EWZ, IWM/RUTEARNINGS: Only one underlying makes my cut for a earnings announcement volatility contraction play: GPS (25/70/14.9%),* which announces on Tuesday after market close, so look to put on a play in the waning hours of Tuesday's session. To me, it's small enough to short straddle, with the pictured setup paying 3.72 (.93 at 25% max). Alternatively, go short strangle: the December 18th 22/29 was paying 1.25 (.62 at 50% max). Of a defined risk bent? Go iron fly with the December 18th 20/25/25/30 and get better than risk one to make metrics, with the setup paying 3.00 even as of Friday close (.75 at 25% max). EXCHANGE-TRADED FUNDS RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY): KRE (22/40/14.0%) (Yield: 3.43%) XLE (25/43/12.5%) (Yield: 6.15%) EWZ (17/43/12.2%) (Yield: 2.89%) GDX (13/37/11.7%) (No dividends) SLV (22/37/10.8%) (No dividends) BROAD MARKET RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY): IWM (24/30/8.5%) QQQ (20/26/7.6%) SPY (18/23/6.2%) EFA (16/19/5.3%) * -- The first metric is volatility rank/percentile (i.e., where 30-day implied volatility is relative to where it's hung out the past 52 weeks); the second, 30-day implied; and the third, what the December at-the-money short straddle is paying as a function of stock price ("Bang for Your Buck").
G
by NaughtyPines
Daily Market Update for 11/20Trend lines drawn from the 10/13 pivot day (30d), 10/30 bottom (16d), 11/16 (5d), and today 11/20 (1d). I am making some changes to the chart presentation and renaming the series to reflect the other data points I am including. Still based out of the Nasdaq composite. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, November 20, 2020 We may lose, and we may win Though we will never be here again Facts: -0.42% lower, Volume higher, Closing range: 3%, Body: 45% Good: Higher high, Higher low Bad: Sold in afternoon, close at the day’s lows Highs/Lows: Higher high, Higher low Candle: Body in lower half of candle Advance/Decline: 1.10, about even advancing and declining stocks Sectors: Utilities (XLU +0.02%) was the only gaining sector. Technology (XLK -1.03%) was the worst performing. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The market showed signs of nervous investors today likely from a disagreement between the Treasury Department and the Fed. That nervousness turned into a sell-off in the afternoon that ended with the index at its daily lows. We did get the higher high and higher low that I hoped for in yesterday’s update. There were also bright spots among some growth stocks with just over half of stocks in the Nasdaq ending the day with gains. Otherwise, it was a disappointing end to a very sideways week which closed almost exactly where it opened. The index ended today with a -0.42% loss on slightly higher volume than yesterday. The closing range of 3% and the 45% body in the lower half of the candle show the gains in the morning were lost in the afternoon. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The Russell 2000 (RUT +0.07%) was the only index to end the day and the week with gains. The S&P 500 (SPX -0.68%) and the Dow Jones Industrial (DJI -0.75%) both sold off throughout the day closing at lows. The leading sector of the day was Utilities (XLU +0.02%) which is has recently been the sector that leads when investors get nervous. Communications (XLC -0.23%) and Technology (XLK -1.03%) were leading in the morning before pulling back in the afternoon. Technology dropped sharply in the last hour of trading to end the day as the worst performing sector. The VIX volatility index increased by +2.55%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators US 30-year and 10-year Treasury bond yields decreased for the day as investors moved moderately into the safe haven. The spreads tightened for an additional day. The corporate bond to treasure bond spreads remained about the same. The US dollar (DXY +0.11%) was up slightly for the day. Silver (SILVER -+0.51%) was up for the day while Gold (GOLD -0.07%) was just slightly down. Timber (WOOD -0.07%) fell just slightly. Crude Oil futures (CRUDEOIL1! +1.66%) regained recent highs. Adding the Put/Call ratio to the daily indicators. It dropped to 0.535. A contrarian indictor that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a reversal in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All big four mega-caps ended the day with losses. Apple (AAPL -1.1%) and Google (GOOG -1.23%) closed above their key moving average lines. Microsoft (MSFT -0.96%) closed below its 50d MA line. Amazon (AMZN -0.57%) is still trading below both indicators. All four underperformed the index for the day. Most other mega-caps closed with losses. Alibaba (BABA +4.17%), Paypal (PYPL +0.93%), Netflix (NFLX +0.74%) were a few notable outperforming mega-caps. Foot Locker (FL -4.96%) released earnings that beat expectations before market open. It opened with gains in the morning but sold off to end the day with a loss. It was a pretty good day for growth stocks, especially stocks that have done well during the pandemic. Fiverr (FVRR +6.99%), Zoom Video (ZM +6.11%) and Peloton (PTON +5.36%) are a few examples of stocks with big gains today. Workday (WDAY -9.27%) sold off after releasing earnings that beat expectations, but warning about impact from the pandemic on future business. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Purchasing Managers Index data will be released on Monday, signaling expansion or contraction for Manufacturing and Services sectors. Daqo New Energy (DQ +4.07%), Twist Bioscience (TWST +0.93%), NIU Tech (NIU -0.45%) will kick off a light earnings week with release before market open on Monday. Agilent (A +2.03%) and Arrowhead Pharmaceuticals (ARWR -0.17%) will report after close. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index still could not pass the 10/12 pivot high that has been resistance for most of the past two weeks. The trend line from the 10/30 bottom is pointing to a +2.52% gain. The five-day and one-day trend lines point to a +0.32%. The trend line from the 10/12 pivot day is pointing to a -0.99%. If the index can close above the 10/12 pivot day high, then I’d remove this trend line moving forward. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The Nasdaq closed the week right where it opened with the trading range contained to 1.6% and an inside week relative to the previous week. With mixed signals coming from economic news as well as a disagreement between the Treasury and the Fed, it’s no surprise investors protected portfolios heading into the weekend. Time to get some rest before the not-so-restful holidays next week. Take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 11/19Trend lines drawn from the 10/13 pivot day (29d), 10/30 bottom (15d), 11/13 (5d), and today 11/19 (1d). I am making some changes to the chart presentation and renaming the series to reflect the other data points I am including. Still based out of the Nasdaq composite. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, November 19, 2020 'Cause I try and I try and I try and I try Facts: +0.87% higher, Volume higher, Closing range: 95%, Body: 83% Good: Bullish all day, close at top of range Bad: Did not beat yesterday’s high Highs/Lows: Lower low, lower high Candle: Very tiny wicks, thick green bullish day Advance/Decline: 1.86, almost 2 advancing stocks for every declining stock Sectors: Energy (XLE +1.64%) and Technology (XLK +0.81%) were top performing. Utilities (XLU -1.00%) was worst performing. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview After yesterday’s late afternoon change in character, the market reversed back to the behavior from the previous several days: modest gains, small-caps, energy as the leading sector and rising breadth across advancing stocks. The only thing that did not occur is a higher high and higher low, something to look for on Friday. The Nasdaq closed Thursday with a +0.87% gain and a 95% closing range. The 83% green body and +12.7% increase in volume represented the very bullish day after a small dip at market open. There were just under 2 advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors All the indices closed with gains while the Nasdaq led the day. The S&P 500 (SPX +0.39%), Dow Jones Industrial average (+0.15%) and the Russell 2000 (+0.84%) recovered some of yesterday’s losses. None of them made it back to yesterday’s highs. The RUT, just slightly behind the Nasdaq, showed energy in small-cap stocks again. The leading sector of the day was Energy (XLE +1.64%). After dipping below the market performance in the morning, it was bought back in the afternoon to finish ahead of the other sectors. Technology (XLK +0.81%) and Communications (XLC +0.61%) were in second and third place. Utilities (XLU -1.00%) was the worst performing sector as investors are exiting this safer equities bet for more growth opportunities in other sectors. The VIX volatility index decreased by -3.08%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Indicators US 30-year and 10-year Treasury bond yields decreased for the day and the spreads tightened for an additional day. The difference between Corporate and Treasury Bonds yields increased. The US dollar (DXY +0.03%) briefly strengthened during the day, but is currently at a similar value to yesterday. Silver (SILVER -1.23%) and Gold (GOLD -0.36%) both decreased for the day. Timber (WOOD -0.44%) finally pulled back from recent gains. Aluminum Futures (ALI1! -0.67%) also saw its first decline in recent weeks. Crude Oil futures (CRUDEOIL1! -1.47%) pulled back possibly due to new lock downs and jobless claims data showing possible weaker demand for holidays. Adding the Put/Call ratio to the daily indicators. It is currently around 0.635. A contrarian indictor that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 and below, watch for a reversal in the market. It’s currently at 0.635 and trending down. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders Apple (AAPL +0.52%) dipped below its 21d EMA in the morning but closed well above it by the end of the day. Microsoft (MSFT +0.63%) traded below its 50d MA but closed above yet remained below its 21d EMA. Amazon (AMZN +0.37%) remans below both key moving averages. Alphabet (GOOG +0.98%) continues to trade well above both lines. The rest of the mega-caps followed performance of the sectors. Limited Brands (LB +17.67%) soared to new highs after wowing investors by smashing expectations and reporting a 28% in comparable store sales. Ross Stores (ROST -0.99%) is up after hours after topping estimates. BJ’s Wholesale Club (BJ +3.60%) was down after hours despite beating expectations. Macy’s (M +2.11%) announced an earnings beat before open and was up on the day, but has retreated after hours. Overall it seems to be a good week for retail earnings reports. Growth stocks generally had a good day. Chinese EV Car company NIO (NIO +7.52%) resumed its rise with a big gain. ETSY (ETSY +5.90%), SolarEdge (SEDG +4.82%), SNAP (SNAP +4.09%) and SQ (SQ +3.30%) were among several of the top winners on the day. Fastly (FSLY -0.99%) and Fiverr (FVRR -1.62%) were among a handful of pullbacks after several days of gains. Zoom Video (ZM -0.18%) fell back slightly after yesterday’s gain on pandemic lockdown fears. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow will bring an update FOMC member Kaplan, which will likely echo the sentiment from FOMC comments earlier this week. In addition, the Treasury Department reports out to congress. Foot Locker (FL +3.48%) will be among a few retailers and other stocks that will closing the week with earnings reports before market open. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index is closing in on new highs but still needs to get past the 10/12 pivot day high that has provided resistance the past week. The trend line from the 10/30 bottom is pointing to a +2.10% gain. The one-day and five-day point to either side of the 10/12 pivot high. They both would be under a +1.00% gain. The trend line from the 10/12 pivot day is pointing to a -1.69%. If the index can close above the 10/12 pivot day high, then I’d remove this trend line moving forward. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up There are two tests for the index on Friday. First is to make a higher high than today and ideally a higher low as well. The second would be to close above the 10/12 pivot day. A new all-time high would be great but could wait for next week if the index passed those two tests. There is still quite a lot of resistance to overcome with new pandemic lockdowns and the treasury not extending emergency lending programs. Keep an eye out for how these impact the markets tomorrow. Take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 11/18Trend lines drawn from the 10/13 pivot day (28d), 10/30 bottom (14d), 11/12 (5d), and today 11/18 (1d). I am making some changes to the chart presentation and renaming the series to reflect the other data points I am including. Still based out of the Nasdaq composite. 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, November 18, 2020 I'm only happy when it rains Pour your misery down Facts: -0.82% lower, Volume higher, Closing range: 1%, Body: 66% Good: Nothing Bad: Character change, break from trend Highs/Lows: Lower high, lower low Candle: No lower wick, long red body Advance/Decline: 0.63, 3 declining stocks for every advancing stock Sectors: Industrials (XLI -0.45%), Consumer Discretionary (XLY -0.68%) were best performing. Energy (XLE -2.91%) and Utilities (XLU -1.96%) were worst performing. Expectation: Lower A note on Expectation: Avoid reading expectation as a prediction. I try to have an expectation for the market based on the technical and fundamental data available. Then if the market does something different, it compels me to ask why and understand if something is fundamentally changing or if its normal action. The last few days is a good example. My expectation was Higher after Monday close, but we had a sideways to lower result. There is an indecision candle for the Nasdaq yesterday. So I set an expectation for Sideways for today, looking for a direction. This afternoon, the market made a decisive direction change and ended down. I’ll be setting an expectation for lower tomorrow, but the market can certainly change the other direction and that will be a good expectation breaker and sign we are still in a rally. There is no reliable way to predict what the market will do each day. The best I have done in a computer algorithm analyzing candlestick charts is 50.01% accuracy. A coin flip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The market ended today with a character change, raising questions about where it may go in the near term. The competing optimism and pessimism with the pandemic and economy led to a day and a half of indecision which finally turned to a downside move at the end of Wednesday. The character change is noted and will follow closely over the next few days. The index closed with a -0.82% loss on higher volume. The candle has a red body of 66% and a closing range of 1%, leaving no bottom wick. There were 3 declining stocks for every 2 advancing stocks on the index. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Indexes and Sectors The S&P 500 (SPX -1.16%), Dow Jones Industrial average (-1.16%) and the Russell 2000 (-1.26%) all ended with losses. The notable change is seeing the RUT with the worst performance among the indexes for today after outperforming since early last week. There was also a change in the sector performance. After leading last week and the past two days, Energy (XLE -2.91%) dropped to the bottom of the list. It is still at the top when considering change since the vaccine was announced on 11/9, but this is a signal of sentiment change in which sector will lead. All sectors were down for the day with Industrials (XLI -0.45%) and Consumer Discretionary (XLY -0.68%) performing the best compared to the S&P 500. Financials (XLF -0.95%) led in the morning before falling back. The VIX volatility index increased by 4.98%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Bonds, Greenback and Commodities The US30Y-US10Y spread tightened for the day while the US10Y-US2Y spread increased. The spread of Corporate Bonds to Treasury Bonds increased slightly. The US dollar (DXY -0.03%) continued to weaken over the past week. Silver (SILVER -0.65%) and Gold (GOLD -0.38%) both decreased for the day. Timber (WOOD +0.35%) continued to grow at a slower pace than the earlier this month. Aluminum Futures (ALI1! +0.85%) continues to climb. Crude Oil futures (CRUDEOIL1! +2.46%) gained after inventories data came back less than expected, a good sign for demand. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders All the big four mega-caps lost for the day. Apple (AAPL -1.14%) and Google (GOOG -1.32%) are still trading above key moving average lines. Microsoft (MSFT -1.58%) dropped below the 21d EMA and Amazon (AMZN -0.96%) remains below the 21d EMA and the 50d MA. Tesla (TSLA +10.20%) continued to rise after being added to the S&P 500. Some other mega-caps such as Taiwan Semiconductor Manufacturing (TSM +1.27%) had gains but most mega-caps lost for the day. Target (TGT +2.34%), TJX Companies (TJX +1.86%) gained after releasing earnings before market open. Lowe’s (LOW -8.21%) was down after also releasing earnings before open. Limited Brands (LB -5.19%) completed the days retail earnings with a positive beat and is up 9.70% after hours. NVDA (+0.05%) is also down 2-3% after hours after beating earnings and revenue but warning on a decline in data center revenue. Many of the Growth stocks that had gains during the pandemic, ended the day positive, showing the market is expecting more impact from new lockdowns. Zoom Video (ZM +3.34%), Peloton (PTON +1.95%) and Fastly (FSLY +3.49%) are a few of the stocks that outperformed the market. RIOT (RIOT -13.72%) gave back some of the massive gains on the previous day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Existing Home Sales data will be released tomorrow, a bullish/bearish indicator for the USD and will add some more detail to the mixed results of today’s Building Permits (below expectation) and Housing Starts (above expectation) data. Initial Jobless Claims and more manufacturing data will also be released. Macy’s (M +2.16%), ROSS Stores (ROST +0.76%), BJ’s Wholesale Club Holdings (BJ +2.09%) will add to this weeks Retail earnings releases. Intuit (INTU -1.12%) and Workday (WDAY -1.40%) are notable growth stocks to release earnings tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The trend line from the 10/30 bottom is still pointing to a new all-time high if the index can gain +3.01%. A return to the five-day trend line would result in a +1.55% gain and be a healthy reversal from today’s afternoon action. An alternative would be a sideways to positive move of +0.41% which would follow the one-day regression trend line. That one-day line seems compromised however with the late sell-off today. The trend line from the 10/12 pivot day is pointing to a -1.12% loss which would be just above the 21d EMA. Landing at this area would confirm the character change from today, but not be disastrous. The index in the past has held support here before dropping below it, giving a chance to assess what the next move might be. The 50d MA could also be a point that the index drops to and that is -3.77% below today’s close. -=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The character change in the market this afternoon is a signal of investor nervousness around the pandemic and new lockdowns overtaking optimism of a vaccine. Keep in mind though that this sentiment can also change back the other direction, especially if the situation puts more pressure on congress to pass stimulus. You can be ready for a worsening market by putting stop loss orders in place, getting off margin and selling riskier assets. But do not overreact to the change signal until it is confirmed. Pay more attention to the price of the market and your investments instead of the news. Take care!
NASDAQ:IXIC
by drewby4321