Daily Market Update for 11/15Summary: The strengthening US Dollar and rising treasury yields put a damper on Friday's rally in big tech. Investors moved into defensive and cyclical sectors as Biden put his signature to the Infrastructure Bill on Monday.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Monday, November 15, 2021
Facts: -0.04%, Volume lower, Closing Range: 54%, Body: 29% Red
Good: Higher high, higher low, longer lower wick
Bad: Low advance/decline, could hold morning rally
Highs/Lows: Higher high, Higher low
Candle: Longer lower wick, small body in top of candle
Advance/Decline: 0.65, three declining stocks for every two advancing stock
Indexes: SPX (-0.00%), DJI (-0.04%), RUT (-0.45%), VIX (+1.23%)
Sector List: Utilities (XLU +1.32%) and Energy (XLE +0.83%) at the top. Materials (XLB -0.46%) and Health (XLV -0.62%) at the bottom.
Expectation: Sideways
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Market Overview
The strengthening US Dollar and rising treasury yields put a damper on Friday's rally in big tech. Investors moved into defensive and cyclical sectors as Biden put his signature to the Infrastructure Bill on Monday.
The Nasdaq closed with a -0.04% decline, a nearly flat move for the day. The index rallied in the morning but then dipped to an intraday low before regaining ground in the late afternoon. The candle has a 29% red body in the upper half with a long lower wick underneath a 54% closing range. We did get a higher high and higher low for the day. Volume was less than on Friday, and three stocks declined for every two advancing stocks.
The S&P 500 (SPX) closed flat with no gain or loss.
The Dow Jones Industrial Average (DJI) declined -0.04%. Small-caps underperformed for the day, sending the Russell 2000 (RUT) down by -0.45%. The VIX Volatility Index rose +1.23%.
Only four of the eleven S&P 500 sectors declined for the day. Utilities (XLU +1.32%) and Energy (XLE +0.83%) were at the top of the list. Materials (XLB -0.46%) and Health (XLV -0.62%) were the worst-performing sectors.
The NY Empire State Manufacturing Index showed a surprising pick-up in activity. The index came in at 30.9 compared to an expectation of 21.6.
The US Dollar strengthened with the index (DXY) rising +0.42% today. US 30y, 10y, and 2y Treasury Yields rose for the day, with the gap widening between long-term and short-term yields. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices fell. Silver and Gold paused after climbing substantially from the beginning of November.
The put/call ratio (PCCE) declined to 0.514. The CNN Fear & Greed index remained at the Extreme Greed level.
The four largest mega-caps had mixed results for the day. Amazon (AMZN) was up nearly 2% in the morning but faded to end the day with a +0.58% gain. Apple (AAPL) opened the day with a gain but couldn't hold on and ended with only a +0.01% advance. Microsoft (MSFT) and Alphabet (GOOGL) declined -0.19% and -0.15%. All four daily charts look good.
Chevron (CVX) was the top mega-cap for the day, and PayPal (PYPL) was second. Both gained over 2%. Tesla (TSLA) was the worst-performing stock for today, with a -1.94% decline.
There were many gainers in the Daily Update Growth List, but there were more losers. At the top of the list was FUTU Holdings (FUTU), as the Chinese Fintech stock gained +5.44%. CrowdStrike (NET) was at the bottom of the growth list after Morgan Stanley declared the stock too expensive, sending the price down -10.60%.
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Looking ahead
Retail Sales data will be available at 8:30a tomorrow. Analysts have expected an increase in Retail Sales for October over the previous month. In addition to Retail Sales, we'll also get updates on Export/Import prices and Industrial Production for October. Two Fed chairs (Bostic and Daly) speak tomorrow. API Weekly Crude Oil Stock comes out after the market close.
Walmart (WMT), Home Depot (HD), and Sea (SE) are three big retail stocks reporting earnings tomorrow alongside the Retail Sales data.
Together, the earnings reports and economic data will provide a clear picture for investors as we head into the holiday season.
In addition to those big three, StoneCo (STNE), Lithium Americas (LAC), La-Z-Boy (LZB) are some other interesting earnings reports for tomorrow.
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Trends, Support, and Resistance
The Nasdaq didn't move much today, even considering the mid-day dip. The index didn't test any major support or resistance areas.
If the index returns to the trend-line from the 10/4 low, it would mean a +1.84% advance for tomorrow.
The one-day and five-day trend lines both point to a -0.40% decline for Tuesday.
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Wrap-up
There wasn't much to watch in the market today. The Nasdaq, S&P 500, and Dow Jones Industrial Average were all flat for the day. Volatility (according to VIX) did not pick up much. Overall, investors made some minor rotations based on higher yields, but they did not disturb much ahead of the Retail Sales and Building Permits data that will come later this week.
The expectation for tomorrow is Sideways. Retail Sales data and earnings reports from large Retailers could be the catalyst for a move higher or lower in the indexes.
Stay healthy and trade safe!
