Nasdaq Composite close to strong resistance The Nass Composite is near strong yearly resistance at the Yr1 pivot point at 15k.
the BIgGEST reversals happen at the yearly pivot points!
IXIC trade ideas
Daily Market Update for 8/4Summary: Only two sectors advanced today in a small gain for the Nasdaq while other major indexes took a step backward. Employment data disappointed investors already worried about the impact of the resurgence in the COVID pandemic, while the Fed's Clarida signaled possibly earlier tapering and interest rate hikes.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, August 4, 2021
Facts: +0.13%, Volume higher, Closing range: 59%, Body: 43%
Good: Higher high/low, good closing range
Bad: Dip after intra-day high, low a/d ratio
Highs/Lows: Higher high, higher low
Candle: Over half green body, but in the lower part of the candle, longer upper wick
Advanced/Decline: 0.54, nearly two declining stocks for every advancing stock
Indexes: SPX (-0.46%), DJI (-0.92%), RUT (-1.23%), VIX (-0.28%)
Sectors: Communications (XLC +0.28%) and Technology (XLK +0.20%) at the top. Industrials (XLI -1.36%) and Energy (XLE -1.36%) at the bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Only two sectors advanced today in a small gain for the Nasdaq while other major indexes took a step backward. Employment data disappointed investors already worried about the impact of the resurgence in the COVID pandemic, while the Fed's Clarida signaled possibly earlier tapering and interest rate hikes.
The Nasdaq ended the day with a +0.13%, but nearly two declining stocks for every advancing stock. The green body covers over half the candle, sitting near the bottom under a longer upper wick. The closing range of 59% is not bad but comes after a pullback from the intraday high on a worsening outlook. Volume was higher than the previous day.
The S&P 500 (SPX) declined -0.46% after a record close the previous day. The Dow Jones Industrial Average (DJI) lost -0.92%. The Russell 2000 (RUT) fell -1.23%.
The VIX volatility index declined -0.28%.
Communications (XLC +0.28%) and Technology (XLK +0.20%) were the only two sectors ending the day with gains. Industrials (XLI -1.36%) and Energy (XLE -1.36%) were the worst-performing sectors.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
ADP Nonfarm Employment data for July grew only half the amount expected, raising concerns with investors. However, Services and Non-Manufacturing PMI data came in higher than expected. Crude Oil Inventories showed less than expected demand for oil.
The US Dollar (DXY) gained +0.23%.
The US 30y Treasury yield declined while the 10y and 2y Treasury yields advanced for the day.
High Yield Corporate Bond (HYG) prices declined, and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) declined, and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) declined.
Copper (COPPER1!) declined. Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) advanced +4.56%. Ethereum (ETHUSD) advanced +9.34%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.635. The put/call ratio (PCCE) is a contrarian indicator of overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved back toward Extreme Fear.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps declined for the day. Alphabet (GOOGL) lost -0.37%. Amazon (AMZN) declined -0.34%. Apple (AAPL) fell -0.28%. Microsoft (MSFT) lost -0.21%. Only Amazon is trading below key moving average lines.
Novo Nordisk (NVO), Ely Lilly (LLY), Nvidia (NVDA), and Facebook (FB) were the top mega-cap gainers for the day, all advancing over 2%. Exxon Mobil (XOM), Toyota Motor (TM ), Pepsico (PEP), and Coca-Cola (KO) were at the bottom of the mega-cap list.
Robin Hood (HOOD) became the latest meme stock with investors pouring into the recent IPO. The stock gained 50% today. Paycom (PAYC) gained over 10%. Zoom video (ZM) and Etsy (ETSY) fill out the top four in the daily update growth list, with over 6% gains each. Most stocks in the list gained today. The biggest losers were Ehang Holding (EH), Sumo Digital (SUMO), Fastly (FSLY), and Snowflake (SNOW).
Roku (ROKU), Lemonade (LMND), Etsy (ETSY), and Fastly (FSLY) all disappointed investors in earnings calls and are trading significantly lower in after hours. Those earnings reports are a sour note in a relatively positive earnings season and may impact sentiment tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Initial Jobless Claims gets an update on Thursday. Let's hope the data reverses today's reaction from July's payroll data. We will also get new Exports, Imports, and Trade Balance data.
Novo Nordisk (NVO), Moderna (MRNS), Square (SQ), MercadoLibre (MELI), Cloudflare (NET), DataDog (DDOG), Zillow (Z), Penn National Gaming (PENN), Zynga (ZNGA), Virgin Galactic (SPCE), and Redfin (RDFN) report earnings. Many of these and others not listed had tremendous growth over the past year, and investors will be watching the year-over-year comparisons closely to see if growth continues at the same or similar pace.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq made a small gain today but did not test any critical support or resistance levels.
The trend-line from the 7/19 low ends with a +0.59% advance for tomorrow.
The one-day trend line leads to a +0.38% gain.
The five-day trend line points to a -0.35% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Everything was looking good for growth stocks as we continue through an earnings season that is largely positive. However, Investor sentiment may be changing quite a bit after today's economic data and several disappointing earnings reports among growth favorites.
Based on the longer upper wick and low advance/decline ratio signaling a weak gain among heavy selling, the expectation is for sideways or lower tomorrow.
Stay healthy and trade safe!
nas about to touch historical 1,618 fibo retracement in 5th waveafter run over condition I=V, we are completing right now I*1,618 with EDT (ending diagonal triangle) formation. Highest money-risk ever. For bulls never been better timepoint to bring money in safety.
Daily Market Update for 8/3Summary: Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, August 3, 2021
Facts: ++0.55%, Volume higher, Closing range: 99%, Body: 26%
Good: High closing range, long lower wick as bulls come in after morning selling
Bad: Lower low, no support at 14,650
Highs/Lows: Lower high, lower low
Candle: Small green body above a long lower wick.
Advanced/Decline: 0.67, three declining stocks for every two advancing stocks
Indexes: SPX (+0.82%), DJI (+0.80%), RUT (+0.36%), VIX (-7.40%)
Sectors: Energy (XLE +1.71%) and Health (XLV +1.39%) at the top. Real Estate (XLRE +0.41%) and Communications (XLC -0.45%) at the bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way.
The Nasdaq closed with a +0.55% after testing its 21d EMA in the opening hour. The candle has a long lower wick from the dip, but the index rallied the rest of the day to end with a 99% closing range above a small green body. The candlestick's pattern is a hanging man within an uptrend. Despite the afternoon rally, there were three declining stocks for every two advancing stocks. The hanging man and low A/D show the sellers are present in the market even as the indexes rose.
The S&P 500 (SPX) climbed 0.82% to close at another record. The Dow Jones Industrial Average (DJI) rose +0.80%. The Russell 2000 (RUT) gained +0.36%.
The VIX volatility index declined -7.40%.
Energy (XLE +1.71%) and Health (XLV +1.39%) were top gainers for the day. Communications (XLC -0.45%) was the only losing sector for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Factory Orders data came in higher than expected, counter to the Manufacturing data that showed a slowdown.
The US Dollar (DXY) was about flat for the day.
The US 30y, 10y, and 2y Treasury yields all declined for the day.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) advanced, and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) advanced. Aluminum (ALI1!) had its first decline after several days of advance.
Bitcoin (BTCUSD) declined -2.52%. Ethereum (ETHUSD) declined 03.84%, its first significant decline in two weeks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.610. The put/call ratio (PCCE) is a contrarian indicator of overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved out of Extreme Fear, back into the Fear level.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps gained for the day, with Apple (AAPL) leading the way with a +1.26% gain. Amazon (AMZN) bounce off 3300 to end the day with a +1.04% gain. Microsoft (MSFT) advanced +0.81%. Alphabet (GOOGL) climbed by +0.58%.
Pfizer (PFE), Eli Lilly (LLY), Oracle (ORCL), and Toyota Motor (TM ) were the top gaining mega-caps today. At the bottom of the list were Visa (V), Alibaba (BABA), Walt Disney (DIS), and Mastercard (MA).
Solar Edge (SEDG) blew away the competition in the daily update growth list with a +16.33%. The other top growth stocks in the list were Snowflake (SNOW), Enphase (ENPH), and Pinterest (PINS). The Chinese stocks in the list found themselves at the bottom again, with NIO (NIO), FUTU Holdings (FUTU), UP Fintech (TIGR), and Ehang Holding (EH) losing between -2.8% and -5.8%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Several economic indicators will get updates tomorrow. Mortgage data will be available early in the morning. Then Nonfarm Employment Change data will give an update on the labor market. Purchase Manager Index data for Services will show growth for the services sector, while Non-Manufacturing purchasing manager index data will provide a broader look at economic activity. Finally, Crude Oil Inventories get an update later in the morning.
Toyota Motor (TM ), Sony (SONY), CVS (CVS), Booking (BKNG), General Motors (GM), Uber (UBER), Roku (ROKU), Allstate (ALL), Etsy (ETSY), AMC Entertainment (AMC), Fastly (FSLY), Lemonade (LMND), and DermTech (DMTK) are some of the exciting earnings reports for Wednesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq tested the 21d exponential moving average during the morning dip. In that area, bulls came in to buy the index back up and close with a gain.
The one-day trend line leads to a +0.98% gain for tomorrow.
The trend-line from the 7/19 low ends with a +0.64% advance.
The five-day trend line points to a -0.58% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Even the worsening COVID situation doesn't seem to dampen the spirits of investors this week. Much of the impact will come from how the government responds to the pandemic vs. the pandemic itself. After 18 months of dealing with the pandemic, the public has figured out how to continue operating, and the economy keeps going.
The hanging man candlestick in an uptrend is a signal of a growing number of sellers. The expectation for tomorrow is sideways or higher.
Stay healthy and trade safe!
Nasdaq (IXIC) with fundamentalsPlease visit guiatraders org
It’s never too soon to start thinking about your financial future. We work with our clients to help them better understand what options are available, and advise them on the best investment decisions to make. Together we’ll set, achieve, and exceed all of your financial goals.
The 2022 Tech Bubble Fractals and Sentiment AnalysisIntroduction
I was inspired by CryptoKaleo's post (original post below) on the "Next Tech Bubble", where he predicted a tech bubble to take place in the coming years based on the fractals of the 1998-2002 Dot com bubble market price action.
Disclaimer: This is not investment advice. This is for educational and entertainment purposes only. I am not responsible for the profits or loss generated from your investments. Trade and invest at your own risk.
Analysis
I myself have been also thinking about the probability of another 2000-esque bull rally for the Nasdaq index for a while now.
You can check out my analysis on the comparison between the market in 2020 and the Dot com bubble, which I posted last year:
My goal for this post was to not only compare the price action of the two periods through fractals, but also to research the headlines of financial news from the past, in order to more accurately research the sentiment that was reflected on the media. The quotes in red are direct quotes from 1998-2002, and the quotes in black are recent news that reflect the current market sentiment.
We can see a clear shift in sentiment; optimism > euphoria > fear > surrender.
The most notable parts of the cycle is the euphoria at the absolute top of the market, and sense of despair at the bottom of the market.
This figure will further help you understand the structure of a market bubble, and the market sentiment according to the price action of the market.
What's extremely interesting is that the Dot com bubble demonstrated a textbook pattern of a market bubble structure.
Conclusion
There may be multiple news that could potentially trigger the next market bubble. If one were to occur, it's highly likely that we see it happen in the tech/bio sector this time, where insane multiples are given based not on the current financials of the company, but the prospect of it. While there is also a probable case where we don't see a bubble at all, if it we were to see the market make parabolic moves up to overbought levels, referring to fractals of the past, and comparing the market sentiment of the past, could provide a guideline for us to refer to.
If you like this analysis, please make sure to like the post, and follow for more quality content!
I would also appreciate it if you could leave a comment below with some original insight.
Daily Market Update for 8/2Summary: Despite being at a historically high level, Manufacturing activity data was lower than the previous month and lower than expectations. The result was a failed morning rally that took indexes higher before selling off in the afternoon. The only positive holding back more selling was the progress of the Infrastructure bill in congress.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, August 2, 2021
Facts: +0.06%, Volume higher, Closing range: 15%, Body: 74%
Good: Higher high, higher low, support at 14,650 area
Bad: Could not hold morning highs, low A/D ratio
Highs/Lows: Higher high, higher low
Candle: Mostly red body with tiny upper and lower wicks
Advanced/Decline: 0.79, more declining stocks than advancing stocks
Indexes: SPX (-0.18%), DJI (-0.28%), RUT (-0.48%), VIX (+6.80%)
Sectors: Utilities (XLU +0.77%) and Consumer Discretionary (XLY +0.29%) at the top. Energy (XLE -0.75%) and Materials (XLB -1.21%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Despite being at a historically high level, Manufacturing activity data was lower than the previous month and lower than expectations. The result was a failed morning rally that took indexes higher before selling off in the afternoon. The only positive holding back more selling was the progress of the Infrastructure bill in congress.
The Nasdaq finished the day with a +0.06% gain on higher volume than the previous day. The candle is mostly red body with tiny upper and lower wicks, reflecting the full day of selling after the markets opened higher in the morning. The closing range of 15% is below a 74% red body. There were more declining stocks than advancing stocks.
The other major indexes all lost for the day. The Russell 2000 (RUT) started the day outperforming but sold off more than the other indexes and ended with a -0.48% loss. The Dow Jones Industrial Average (DJI) declined -0.28%. The S&P 500 (SPX) lost -0.18%.
The VIX volatility index advanced +6.80%.
Utilities (XLU +0.77%) led the sector list, signaling caution among investors. Consumer Discretionary (XLY +0.29%)was the second-best sector for the day as Personal spending data on Friday did come in higher than expected. Energy (XLE -0.75%) and Materials (XLB -1.21%) were at the bottom of today's sector list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
For July, the ISM Manufacturing PMI came in at 59.5 vs. the previous month at 60.6 and was lower than the forecasted 60.9 level.
The result is that the US Dollar (DXY) declined -0.02%.
The US 30y, 10y, and 2y Treasury yields all declined for the day.
High Yield Corporate Bond (HYG) declined sharply while Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) was flat.
Copper (COPPER1!) declined. Aluminum (ALI1!) continued to advance.
Bitcoin (BTCUSD) advanced +0.44%. Ethereum (ETHUSD) advanced +0.55%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.618. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index is back in Extreme Fear.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN) advanced slightly, gaining +0.12%, but is still well below last week's high and the moving average lines. Alphabet (GOOGL) also had a small gain of +0.10%. Microsoft (MSFT) and Apple (AAPL) declined -0.03% and -0.23%, respectively.
Tesla (TSLA), Pfizer (PFE), Alibaba (BABA), and Nvidia (NVDA) were the top mega-caps for today. Mastercard (MA), Visa (V), and PayPal (PYPL) were the bottom three mega-caps, with the former two losing more than -2.5% each as investors see fierce competition from Square (SQ) with the acquisition of Afterpay.
Square (SQ) topped the daily update growth list with a 10% gain. The other three at the top of the list were Chinese stocks UP Fintech (TIGR), FUTU Holdings (FUTU), and Ehang Holding (EH). PayPal (PYPL), Pinterest (PINS), Enphase (ENPH), and Fiverr (FVRR) were the worst performers in the growth list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Factory Orders data will be available in the morning, with the API Weekly Crude Oil Stock data coming after the market close.
Alibaba (BABA), Eli Lilly (LLY), Amgen (AMGN), Fidelity (FIS), Marriott (MAR), Match Group (MTCH), Occidental (OXY), Ringcentral (RNG), LYFT (LYFT), Hyatt (H), and Skillz (SKLZ) are some of the many earnings reports for Tuesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
There seems to be support forming around 14,650-14,700. I'll watch this level over the next few days to see if it holds.
The trend-line from the 7/19 low ends with a +1.37% gain for tomorrow.
The five-day trend line points to a +0.60% gain.
The one-day trend line leads to a -0.13% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
As the Delta variant of COVID continues to force new measures worldwide to contain the virus, investors are nervous about the impact on the economic recovery. Even though manufacturing activity is historically high (the ISM index today is higher than it ever was in 2019 and through the start of the pandemic), investors are still seeing the slowing activity and looking for what to trade next.
We did get a higher high and a higher low, but given the primarily red day after a morning high and failed rally, the expectation is for sideways tomorrow.
Stay healthy and trade safe!
Market Week in Review - 7/26/2021 - 7/30/2021Summary: This week's story has many parts, including Chinese stocks, Earnings Reports, the Infrastructure Bill, and a two-day Fed meeting which all ended with advances in small-caps and gains in commodity prices. Each made its influence felt across the market as investors shifted to respond to the implications of each.
Notes
The 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.
I occasionally have some errors or typos and will correct them in my blog or 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.
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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, July 26, 2021
Facts: +0.03%, Volume higher, Closing range: 69%, Body: 27%
Good: Slight gain on higher volume, healthy pause
Bad: A/D low but not surprising with sideways move
Highs/Lows: Higher high, higher low
Candle: Thin green body in the middle of a short candle
Advanced/Decline: 0.57, almost two declining stocks for every advancing stock
Indexes: SPX (+0.24%), DJI (+0.24%), RUT (+0.33%), VIX (+2.33%)
Sectors: Energy (XLE +2.47%) and Materials (XLB +0.84%) at the top. Industrials (XLI -0.05%) and Health (XLV -0.65%) were bottom.
Expectation: Sideways or Higher
Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week.
The Nasdaq closed the day with a small +0.03% gain. It traded up and down throughout the day but stayed within a tight range. Volume was higher for the day. A thin green body sits in the middle of the short candle, with equal upper and lower wicks. The closing range was 69%. There were almost two declining stocks for every advancing stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, July 27, 2021
Facts: -1.21%, Volume lower, Closing range: 51%, Body: 48%
Good: Lower volume on pullback, longer lower wick from bounce at 14,500 support.
Bad: Lower high, lower low, dip below 21d EMA
Highs/Lows: Lower high, lower low
Candle: Half red body above half lower wick, no upper wick
Advanced/Decline: 0.28, more than three declining stocks for every advancing stock
Indexes: SPX (-0.47%), DJI (-0.24%), RUT (-1.13%), VIX (+10.01%)
Sectors: Utilities (XLU +1.72%) and Real Estate (XLRE +0.80%) at the top. Consumer Discretionary (XLY -1.01%) and Communications (-1.19%) were bottom.
Expectation: Sideways or Lower
Earnings reports releasing this week have been very positive, but investors are already looking beyond the reports to expectations for the second half of the year. With mounting fears around the new Delta variant of COVID and potential changes in monetary policy by the Fed, all major indexes retreated today.
The Nasdaq closed with a -1.21% loss in a session that was mostly selling before a bounce at the 14,500 support level. Volume was lower than the previous day. The bounce brought the index back up to the middle of the candle for a 51% closing range. The 48% red body is in the upper half of the candle, over a long lower wick. There were more than three declining stocks for every advancing stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, July 28, 2021
Facts: +0.70%, Volume lower, Closing range: 76%, Body: 31%
Good: Rally in morning and afternoon to close with gain, A/D ratio above 1.0
Bad: Lower high, lower volume, dip at end of day
Highs/Lows: Lower high, higher low
Candle: Inside day, slightly longer lower wick
Advanced/Decline: 2.0, two advancing stocks for every declining stock
Indexes: SPX (-0.02%), DJI (-0.36%), RUT (+1.51%), VIX (-5.43%)
Sectors: Energy (XLE +0.91%) and Communications (XLC +0.78%) at the top. Utilities (XLU -0.76%) and Consumer Staples (XLP -0.88%) at the bottom.
Expectation: Sideways
Investors survived another Fed meeting with stocks gaining after the Fed left monetary policy untouched but confirmed the economy is still on track and inflation appears transitory. Small caps and growth stocks soared while only a few of the SPDR sectors registered gains.
The Nasdaq dipped at open but recovered quickly and ended the day with a +0.70% gain. Volume was lower for the day, but the 76% closing range and 31% green body are positive outcomes on an Inside day (lower high, higher low). The lower wick is slightly longer than the upper wick. There were two advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, July 29, 2021
Facts: +0.11%, Volume lower, Closing range: 23%, Body: 10%
Good: Higher high and higher low, A/D ratio
Bad: Long upper wick relative to body as early gains faded
Highs/Lows: Higher high, higher low
Candle: Thin body at the bottom of candle with long upper wick
Advanced/Decline: 1.41, more advancing stocks than declining stocks
Indexes: SPX (+0.42%), DJI (+0.44%), RUT (+0.68%), VIX (-3.22%)
Sectors: Consumer Discretionary (XLY +1.13%) and Materials (XLB +1.10%) at the top. Real Estate (XLRE -0.30%) and Communications (XLC -1.08%) at the bottom.
Expectation: Sideways
GDP growth was less than expected this morning while employment data confirmed the Fed's message that there is still more work to do in the economic recovery. That wasn't necessarily a bad thing for equities, as it means economic support will continue for some time.
The Nasdaq closed the day with a +0.11% but gave back intra-day gains, creating a long upper wick over a thin green body. Volume was lower for the day. The closing range of 23% and 10% green body at the bottom of the candle represents a failed attempt to rally today, but the A/D ratio shows some broader gains under the surface.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, July 30, 2021
Facts: -0.71%, Volume lower, Closing range: 50%, Body: 50%
Good: Bounce off 21d EMA and did not revisit low
Bad: Could not hold intraday high from morning rally
Highs/Lows: Lower high, lower low
Candle: Half green body at the bottom of the candle, no lower wick
Advanced/Decline: 0.45, two declining stocks for every advancing stock
Indexes: SPX (-0.54%), DJI (-0.42%), RUT (-0.62%), VIX (+2.94%)
Sectors: Materials (XLB +0.41%) and Real Estate (XLRE +0.32%) at the top. Energy (XLE -1.59%( and Consumer Discretionary (XLY -2.06%) at the bottom.
Expectation: Sideways
A disappointing earnings report from Amazon weighed down major indexes, but inflation data came in less than expected, helping give the market a boost in the morning.
The Nasdaq closed the day with a -0.71% loss to end the week. Volume was lower and declining every day this week since Monday's all-time high in the index. The 50% green body sits at the bottom of the candle with no lower wick. The upper wick formed in the morning rally, but the index could not hold onto the intraday high. There were two declining stocks for every advancing stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
View on the Week
This week's story has many parts, including Chinese stocks, Earnings Reports, the Infrastructure Bill, and a two-day Fed meeting which all ended with advances in small-caps and gains in commodity prices. Each made its influence felt across the market as investors shifted to respond to the implications of each.
Chinese stocks were already on a slide downward coming into the week. China started a regulatory crackdown on companies listed in foreign exchanges that started with the IPO of ride-hailing company Didi a few weeks ago. After several days of losses last week, the stocks opened the week again this week. They seemed to hit bottom and bounce mid-week, but the gains were gone by the end of the week.
Earnings reports mainly were spectacular, but the responses by investors were inconsistent. Look to the results of the largest four mega-caps as an example. On Tuesday, Apple, Alphabet, and Microsoft released their earnings reports after the market closed. All three smashed expectations, which were already high given the height of the pandemic was one year previous. Yet, Apple and Microsoft sold off after hours while Google gained 3%. Microsoft recovered most of the loss the following day, but Apple could not.
The reactions represent a still very nervous market. Even as companies turn in great results, the big fears of the year continue to be top of mind. Examples are supply chain pressures for Apple and a potential slow-down in Q3 of demand for Microsoft compared to the previous year. One area that isn't a concern is the advertising business, which is booming and helped send Alphabet yet higher.
Tesla pleased investors with their earnings report on Monday, sending the stock up over 6% for the week. One company that did not please investors was Amazon. Although the company had great results, the outlook for the year did not meet expectations. The mega-cap dropped 7% on Friday and brought the major indexes down with it.
The Fed had a two-day meeting this week and released a statement on Wednesday. The tone struck the right balance for investors. The economic recovery is on track, but there was more work to do, and so they would not change the anticipated timing of tapering. They noted inflation was still a concern but still held firm that the inflationary conditions are transitory. That sent the indexes higher on Wednesday.
The new all-time high on Monday and subsequent pullback still have double-top potential. 14,200 is the critical level to watch for this week if there is a further pullback.
The Nasdaq declined -1.11% for the week after getting a new all-time high on Monday. The result is a higher high and higher low and a not-so-terrible closing range of 47%. Volume was lower than the previous week.
The market was good for small-caps this past week. With investors pulling profits out of the mega-cap stocks and the Fed keeping a supportive but hawkish stance, the Russell 2000 (RUT) ended the week with gains while the other major indexes declined. The RUT gained +0.75% for the week. The S&P 500 (SPX) lost -0.37%, while the Dow Jones Industrial Average (DJI) declined -0.36%.
The VIX volatility advanced +6.05% for the week.
Materials ( XLB ) was the top sector of the week as manufacturing and core durable goods data showed increase demand and was confirmed in consumer spending numbers. At the same time, the Infrastructure bill moved closer to becoming law. The growth in the sector was matched by increased prices in metal commodities required to support economic expansion.
Energy ( XLE ) started the week strong and led several days throughout the week but ended in second place behind Materials at the end of the week.
The three worst sectors were the growth sectors, all losing for the week. Technology ( XLK ), Communication Services ( XLC ), and Consumer Discretionary ( XLY ) were at the bottom of the weekly sector list.
Yields for the US 30y, 10y, and 2y Treasuries all dropped for the week. The yields continue to slide, and the gap between long-term and short-term yields is tightening.
Both High Yield Corporate Bond (HYG) prices declined, and Investment Grade Bond (LQD) prices advanced. Both remain high as demand for higher yield continues to push investors toward riskier corporate bond investments.
The US Dollar (DXY) declined -0.88% for the week. The index fell sharply after the Fed's statements on Wednesday.
Silver (SILVER) advanced +1.16%, and Gold (GOLD) advanced +0.71%, mostly reacting to moves in the USD.
Crude Oil (CRUDEOIL1!) advanced +2.76%.
Timber (WOOD) advanced +0.17%.
Copper (COPPER1!) declined -1.18%.
Aluminum (ALI1!) advanced +3.67%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Big Four Mega-caps
Only Alphabet (GOOGL) gained among the big four this week, advancing +1.29% on a solid performance in the advertising business, helping the entire communications sector. Apple (AAPL) and Microsoft (MSFT) declined -1.82% and -1.64% but remained above the key weekly moving average lines. Amazon (AMZN) disappointed investors on Thursday, falling -9.00% for the week. The stock closed the week below its 10w moving average line.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Four Recovery Stocks
I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Marriot (MAR) was the top performer among the four this week, advancing +4.89% and moving back above its 10w moving average line. Exxon Mobil (XOM) gained +0.93% but remained below the 10w line. Carnival Cruise Lines (CCL) and Delta Airlines (DAL) both had losses this week and traded below the 10w moving average and 40w moving average lines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Cryptocurrency
I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth).
The cryptocurrencies continued to rebound from lows two weeks ago. Bitcoin (BTCUSD) gained +12.52% this week. Ethereum (ETHUSD) climbed by +16.53%. Litecoin (LTCUSD) advanced +9.81%. Bitcoin Cash (BCHUSD) rose +15.55%. Bitcoin and Ethereum are trading above the key moving averages, with Ethereum showing the best trend as the 10w line is above the 40w line.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio (PCCE) rose above 0.8 on Tuesday but ended the week at 0.668.
The CNN Fear & Greed Index moved back into the Extreme Fear level.
The NAAIM money manager exposure index moved up to 78.39.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Week Ahead
It will be another big week of earnings reports.
There are a lot of earnings reports, and I won't try to list them all here. Check your portfolio for earnings events to prevent surprises.
Monday
The ISM will release manufacturing purchasing managers index data on Monday.
HSBC (HSBC), Mitsubishi UFJ (MUFG), Heineken (HEINY), and Zoominfo (ZI) are a few of the earnings reports for Monday.
Tuesday
Factory Orders data will be available in the morning, with the API Weekly Crude Oil Stock data coming after the market close.
Alibaba (BABA), Eli Lilly (LLY), Amgen (AMGN), Fidelity (FIS), Marriott (MAR), Match Group (MTCH), Occidental (OXY), Ringcentral (RNG), LYFT (LYFT), Hyatt (H), and Skillz (SKLZ) are some of the many earnings reports for Tuesday.
Wednesday
Several economic indicators will get updates tomorrow. Mortgage data will be available early in the morning. Then Nonfarm Employment Change data will give an update on the labor market. Purchase Manager Index data for Services will show growth for the services sector, while Non-Manufacturing purchasing manager index data will provide a broader look at economic activity. Finally, Crude Oil Inventories get an update later in the morning.
Toyota Motor (TM ), Sony (SONY), CVS (CVS), Booking (BKNG), General Motors (GM), Uber (UBER), Roku (ROKU), Allstate (ALL), Etsy (ETSY), AMC Entertainment (AMC), Fastly (FSLY), Lemonade (LMND), and DermTech (DMTK) are some of the exciting earnings reports for Wednesday.
Thursday
Initial Jobless Claims gets an update on Thursday. We will also get new Exports, Imports, and Trade Balance data.
Novo Nordisk (NVO), Moderna (MRNS), Square (SQ), MercadoLibre (MELI), Cloudflare (NET), DataDog (DDOG), Zillow (Z), Penn National Gaming (PENN), Zynga (ZNGA), Virgin Galactic (SPCE), and Redfin (RDFN) report earnings. Many of these and others not listed had tremendous growth over the past year, and investors will be watching the year-over-year comparisons closely to see if growth continues at the same or similar pace.
Friday
More employment data will be available on Friday morning, including Average Hourly Earnings, Nonfarm Payrolls, and the Unemployment Rate.
Interesting earnings reports for Friday include DraftKings (DKNG) and Riot Blockchain (RIOT).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bullish Side
Despite the pullback in the indexes this week, prices remain near all-time highs. The Fed reaffirmed steady progress for the economic recovery while stating that there is still more support needed and they would not change monetary policy in the short term. There is also some indication in pricing data that inflation is slowing down a bit, lending support toward the Fed's statements that it is transitory.
Companies continue to receive support in low-interest rates and are turning that into growth opportunities. In particular, small caps are viewed as benefiting from the current economic cycle. While large-caps are seeing some profit-taking among investors, those investments are rotating back into small-caps.
Commodity prices, especially Oil and Aluminum, are showing the bullishness among investors on economic growth. Aluminum is a metal required across many sectors of manufacturing, from consumer products to industrial applications. The demand for oil is increasing, raising oil prices and helping the Energy sector recover from recent selling.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bearish Side
The Delta variant of COVID is a top concern among investors. Statements made this weekend by leaders in D.C. stated there would not be another lockdown, but that does not mean there won't be any impact on the rising cases even among the vaccinated. Bad news here could send the indexes back into volatility and send prices lower.
As earnings reports pass and investors look toward Q3, they may see a top here for many companies. The comparable year-over-year performance is favorable in Q2, but the expectation is that this growth will slow down in Q3. Time to take profits?
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Key Nasdaq Levels to Watch
The Nasdaq set another all-time high this week after moving back above the 21d EMA. If the index pulls back, the most critical level is around 14,200. A break below that level would signal a bearish double-top pattern.
On the positive side, the levels are:
The high of this past week was a new all-time high at 14,863.65.
The round number 15,000 is likely to be a new area of resistance.
On the downside, there are a few key levels:
The 10d MA is at 14,664.22.
The 21d EMA is at 14,597.11.
14,503.76 is the low of the past week.
14,500 support area was tested this past week and held.
The 50d MA is at 14,262.13.
14,200 remains a critical level that would signal a bearish double top. 14,178.66 is the pivot low for the technical pattern.
14,000 has been an area of support/resistance.
There is a pivot at 13,548.93.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It's never an easy ride when the indexes are making new all-time highs. Investors are waiting for an overdue correction but not wanting to exit just in case the markets move another leg up. Right now, with the Fed support, low interest rates, and outstanding performance of earnings reports, I would lean toward a bullish outlook. The fact that investor sentiment is in extreme fear is often contrarian to what happens.
At the same time, there is always the possibility for a double-top pattern here with a move much lower. Keep trading with stops in place and be ready to reduce positions if the market shows weakness.
Good luck, stay healthy, and trade safe!
Daily Market Update for 7/30Summary: A disappointing earnings report from Amazon weighed down major indexes, but inflation data came in less than expected, helping give the market a boost in the morning.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, July 30, 2021
Facts: -0.71%, Volume lower, Closing range: 50%, Body: 50%
Good: Bounce off 21d EMA and did not revisit low
Bad: Could not hold intraday high from morning rally
Highs/Lows: Lower high, lower low
Candle: Half green body at the bottom of the candle, no lower wick
Advanced/Decline: 0.45, two declining stocks for every advancing stock
Indexes: SPX (-0.54%), DJI (-0.42%), RUT (-0.62%), VIX (+2.94%)
Sectors: Materials (XLB +0.41%) and Real Estate (XLRE +0.32%) at the top. Energy (XLE -1.59%( and Consumer Discretionary (XLY -2.06%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
A disappointing earnings report from Amazon weighed down major indexes, but inflation data came in less than expected, helping give the market a boost in the morning.
The Nasdaq closed the day with a -0.71% loss to end the week. Volume was lower and declining every day this week since Monday's all-time high in the index. The 50% green body sits at the bottom of the candle with no lower wick. The upper wick formed in the morning rally, but the index could not hold onto the intraday high. There were two declining stocks for every advancing stock.
The S&P 500 (SPX) declined -0.54%, while the Dow Jones Industrial Average (DJI) fell -0.42%. The Russell 2000 (RUT), which outperformed this week, declined -0.62% in Friday's session.
The VIX volatility index advanced +2.94%.
Materials (XLB +0.41%) and Real Estate (XLRE +0.32%) were top sectors for the day. Energy (XLE -1.59%( and Consumer Discretionary (XLY -2.06%) were the worst-performing, with Amazon pulling down the latter.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Core PCE Price Index data came in less than expected, while Personal Income and Personal Spending data were higher than expected. Michigan Consumer Sentiment was higher, and Inflation Expectations was lower. Those all should help ease some fears around inflation and an overheated economy.
The result is that the US Dollar (DXY) rose +0.23%.
The US 30y, 10y, and 2y Treasury yields all declined.
High Yield Corporate Bond (HYG) declined while Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) declined.
Copper (COPPER1!) declined. Aluminum (ALI1!) continued to advance for another day.
Bitcoin (BTCUSD) advanced +5.49%. Ethereum (ETHUSD) advanced +3.37%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.668. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved back into Extreme Fear.
The NAAIM money manager exposure index moved up to 78.39.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL) was the only of the largest four mega-caps to advance today, gaining +0.15%. Amazon (AMZN) gapped down and ended the day well below its 21d EMA and 50d MA lines, declining -7.56%. Microsoft (MSFT) declined -0.55%. Alphabet (GOOGL) lost -0.77%.
Proctor & Gamble (PG), Tesla (TSLA), Comcast (CMCSA), and Thermo Fisher Scientific (TMO) were the top-performing mega-caps. AbbView (ABBV), Exxon Mobil (XOM), PayPal (PYPL), and Amazon were the worst-performing.
Only a handful of the daily update growth stocks gained for the day. NIO (NIO), Enphase (ENPH), Ehang Holding (EH), and Tesla (TSLA) were the top performers in the list. Pinterest (PINS) lost over 18%, while Roku (ROKU), Etsy (ETSY), and Upwork (UPWK) fill out the rest of the bottom four.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
The ISM will release manufacturing purchasing managers index data on Monday.
HSBC (HSBC), Mitsubishi UFJ (MUFG), Heineken (HEINY), and Zoominfo (ZI) are a few of the earnings reports for Monday.
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq pulled back but remained above the 21d EMA today.
The trend-line from the 7/19 low ends with a +1.51% gain for Monday.
The five-day trend line points to a +0.18% gain.
The one-day trend line leads to a -0.01% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
After several days of reasonably good earnings reports, the Amazon and Pinterest reports were a bit of a shocker. Thankfully inflation data and consumer sentiment data did not make things worse, and the indexes held support levels.
Based on the long upper shadow two days in a row, the expectation is for Sideways or Lower on Monday.
Stay healthy and trade safe!
Daily Market Update for 7/29Summary: GDP growth was less than expected this morning while employment data confirmed the Fed's message that there is still more work to do in the economic recovery. That wasn't necessarily a bad thing for equities, as it means economic support will continue for some time.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, July 29, 2021
Facts: +0.11%, Volume lower, Closing range: 23%, Body: 10%
Good: Higher high and higher low, A/D ratio
Bad: Long upper wick relative to body as early gains faded
Highs/Lows: Higher high, higher low
Candle: Thin body at the bottom of candle with long upper wick
Advanced/Decline: 1.41, more advancing stocks than declining stocks
Indexes: SPX (+0.42%), DJI (+0.44%), RUT (+0.68%), VIX (-3.22%)
Sectors: Consumer Discretionary (XLY +1.13%) and Materials (XLB +1.10%) at the top. Real Estate (XLRE -0.30%) and Communications (XLC -1.08%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
GDP growth was less than expected this morning while employment data confirmed the Fed's message that there is still more work to do in the economic recovery. That wasn't necessarily a bad thing for equities, as it means economic support will continue for some time.
The Nasdaq closed the day with a +0.11% but gave back intra-day gains, creating a long upper wick over a thin green body. Volume was lower for the day. The closing range of 23% and 10% green body at the bottom of the candle represents a failed attempt to rally today, but the A/D ratio shows some broader gains under the surface.
The Russell 2000 (RUT) outperformed again today with a +0.68% gain, closing above its 21d exponential moving average line for the first time in July. The S&P 500 (SPX) gained +0.42%, while the Dow Jones Industrial Average (DJI) rose +0.44%.
The VIX volatility index declined -3.22%.
Consumer Discretionary (XLY +1.13%), Materials (XLB +1.10%), and Financials (XLF +1.10%) topped the sector list. Only two sectors declined today, Real Estate (XLRE -0.30%) and Communications (XLC -1.08%).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Initial Jobless Claims and Continuing Jobless Claims came in higher than expected. GDP data came in lower than expected, while the GDP Price Index data was higher than expected. Pending Home Sales data was lower than expected.
The result is that the US Dollar (DXY) rally is reversing, with another -0.42% decline today.
The US 30y, 10y, and 2y Treasury yields all advanced.
High Yield Corporate Bond (HYG) advanced while Investment Grade Corporate Bond (LQD) prices declined. The continued support for the economy bodes well for businesses borrowing money to enable growth and employ more people. Outside equities, High Yield (Junk) Bonds will give some of the best returns for investors.
Silver (SILVER) and Gold (GOLD) advanced significantly.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) advanced.
Copper (COPPER1!) advanced. Aluminum (ALI1!) advanced significantly.
Bitcoin (BTCUSD) advanced +0.23%. Ethereum (ETHUSD) advanced +0.60%. (Time of writing) These are sideways to lower moves, given the drop in the USD.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.549. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved toward Neutral but is still near Extreme Fear.
The NAAIM money manager exposure index moved up to 78.39.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL) and Microsoft (MSFT) advanced while Amazon (AMZN) and Alphabet (GOOGL) declined. Apple gained +1.80% while Microsoft rose +0.10%. Alphabet declined -0.23%, and Amazon declined -0.84%. Amazon beat expectations but disappointed investors on their outlook. The stock fell more than 7% in after-hours trading.
Tesla (TSL), Danaher Corporation (DHR), Bank of America (BAC), and Mastercard (MA) topped the mega-cap list today. At the bottom of the list are PayPal (PYPL), Facebook (FB), Pfizer (PFE), and Netflix (NFLX).
Tesla (TSLA), D.R. Horton (DHI), Zoom Video (ZM), and Solar Edge (SEDG) topped the daily update growth list, with the first three gaining more than 4%. PayPal (PYPL), Pinterest (PINS), FUTU Holdings (FUTU), and UP Fintech (TIGR) were at the bottom of the list, all losing more than 5%. Pinterest lost another 18% in after-hours trading after disappointing user growth in their earnings report.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
New inflation data becomes available on Friday with the updated PCE Price index data for June. Additional Employment Data and Consumer Sentiment data becomes available as well.
Berkshire Hathaway (BRK.A), Procter & Gamble (PG), Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX),
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq attempted a rally today that reversed, but the index could hold onto a small gain.
The trend-line from the 7/19 low ends with a +1.11% gain for tomorrow.
The one-day trend line leads to a -0.09% decline.
The five-day trend line points to a -0.26% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The economic data today confirmed much of what the Fed said yesterday. That there is more work to do in the recovery before they begin to taper any economic support. The reaction was muted in the indexes and more stocks advanced than declined.
The long upper wick and thin body at the bottom of the candle present a bearish outlook for tomorrow. The expectation is for sideways or lower.
Stay healthy and trade safe!
NASDAQ INDEX - IXICGood evening?
Signals to sell NASDAQ in general and BigTech shares in particular:
1. Round price of $ 15,000 = resistance.
2. Strong bearish MACD divergence on the weekly chart.
3. Beginning of bearish MACD divergence on slower monthly chart.
4. Bull trap - upward breakout of the resistance of the double top (yellow line).
Therefore, we can expect a Fibonacci correction from 30-50% to the $ 11.5k-10.5k range.
Not a financial recommendation.
GET RICH OR DIE TRYIN.
Daily Market Update for 7/28Summary: Investors survived another Fed meeting with stocks gaining after the Fed left monetary policy untouched but confirmed the economy is still on track and inflation appears transitory. Small caps and growth stocks soared while only a few of the SPDR sectors registered gains.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, July 28, 2021
Facts: +0.70%, Volume lower, Closing range: 76%, Body: 31%
Good: Rally in morning and afternoon to close with gain, A/D ratio above 1.0
Bad: Lower high, lower volume, dip at end of day
Highs/Lows: Lower high, higher low
Candle: Inside day, slightly longer lower wick
Advanced/Decline: 2.0, two advancing stocks for every declining stock
Indexes: SPX (-0.02%), DJI (-0.36%), RUT (+1.51%), VIX (-5.43%)
Sectors: Energy (XLE +0.91%) and Communications (XLC +0.78%) at the top. Utilities (XLU -0.76%) and Consumer Staples (XLP -0.88%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors survived another Fed meeting with stocks gaining after the Fed left monetary policy untouched but confirmed the economy is still on track and inflation appears transitory. Small caps and growth stocks soared while only a few of the SPDR sectors registered gains.
The Nasdaq dipped at open but recovered quickly and ended the day with a +0.70% gain. Volume was lower for the day, but the 76% closing range and 31% green body are positive outcomes on an Inside day (lower high, higher low). The lower wick is slightly longer than the upper wick. There were two advancing stocks for every declining stock.
The Russell 2000 (RUT) led the major indexes with a +1.51% gain but still closing below its 21d exponential moving average line. The S&P 500 (SPX) declined -0.02% and registered a spinning top candle, signaling indecision. The Dow Jones Industrial Average (DJI) fell -0.36% with a bearish outside day.
The VIX volatility index declined -5.43%.
Only four sectors finished the day with gains. Energy (XLE +0.91%) and Communications (XLC +0.78%) were the top sectors. Alphabet (GOOGL) boosted the Communications sector after solid earnings results. Utilities (XLU -0.76%) and Consumer Staples (XLP -0.88%) were at the bottom of the list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Crude Oil Inventories showed much higher demand than expected. The two-day Fed meeting ended without much policy change from the group. The Fed emphasized that the economy is on track for recovery and that inflation still appears to be from transitory factors.
The US Dollar (DXY) declined -0.20%. The index fell after the market open, recovered some losses, and declined sharply after the Fed statements.
The US 30y, 10y, and 2y Treasury yields all declined.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices both advanced.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) declined.
Copper (COPPER1!) declined, and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +1.61%. Ethereum (ETHUSD) remained flat after giving back some intraday gains. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.620. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index is nearly in the Extreme Fear area.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Three of the four largest mega-caps released earnings yesterday. The reports were all positive, but reactions mixed. Alphabet (GOOGL) registered a +3.18% gain for the day after gapping up at the open. Microsoft (MSFT) had an initial negative reaction in after-hours trading, then opened up with positive gains but turned in a -0.11% decline by the end of the day. Apple (AAPL) gapped down at the open. After a volatile session, the company closed the day with a -1.21% gain. Amazon (AMZN), which will report earnings on Thursday, had an +0.11% gain today.
Alibaba (BABA) topped the mega-cap list as the Chinese stocks rebounded from recent losses. Also at the top of the list are Pfizer (PFE), Alphabet, and Novo Nordisk (NVO). MasterCard (MA), Visa (V), Procter & Gamble (PG), and United Health (UNH) were at the bottom of the list.
Chinese stocks topped the gains in the daily update growth list. UP Fintech (TIGR) and FUTU Holdings (FUTU) gained over 10%, while Ehang Holdings (EH) and JD.com (JD) rose +9.7% and +8.5%. There was only one losing stock, D.R. Horton (DHI), on my list. The other stocks at the bottom of the list were Tesla (TSLA), ServiceNow (NOW), and RH (RH), but all had small gains.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
GDP data for Q2 will publish on Thursday. Initial Jobless Claims and Pending Home Sales will also get an update.
Amazon.com (AMZN), Mastercard (MA), AstraZeneca (AZN), Twilio (TWLO), Baidu (BIDU), Pinterest (PINS), Fortinet (FTNT), DexCom (DXCM), Yum! Brands (YUM), and Expedia (EXPE) are a few earnings reports that stand out among another huge list.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq traded inside yesterday's range which could be a continuation pattern in a downtrend from Monday's high.
The trend-line from the 7/19 low ends with a +1.10% gain for tomorrow.
The one-day trend line leads to a +0.48% gain.
The five-day trend line points to a +0.48% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
At market open, we did get a continuation from yesterday's afternoon bounce off the 14,500 area. The rally softened late in the morning as investors anticipated statements from the Fed. Once that was clear, we got another short rally before a dip at the close.
Earnings reports continue to get mixed reactions from investors in today's after-hours trading. Most earnings reports are smashing the comparable year-over-year numbers. However, investors now have to consider what the next two quarters will look like since the opposite might occur after last year's tremendous growth in the second half.
Given the inside day and lower volume, the expectation for tomorrow is Sideways.
Stay healthy and trade safe!
IXIC: Main catalysts and sector studies!Hello traders and investors! Let’s see how the IXIC is doing today, look at the main catalysts and study some sectors!
The Nasdaq is still in a delicate situation, but it is recovering nicely. We have a gap to fill 14,823, and despite the crash seen yesterday, the situation is under control.
However, if we lose the 21 ema along with today’s low, we might seek the support at 14,511 again. This wouldn’t be enough to reverse the bullish bias, but would weaken it for sure.
Yesterday we just retested the 21 ema in the daily chart, and we are bouncing back up already. There is the possibility of a bearish structure around, but as long as we don’t see a clear reversal occurring, we can’t assume anything yet. The NDX has been doing many bear traps since April last year.
Today is a curious day, as the FAANGs are underperforming the index. If the FAANGs correct more, probably we’ll see the Nasdaq suffering a little bit too, but keep in mind that the bias is still bullish on the Big Ones. The next chart sums all the FAANGs in only one:
Maybe the 21 ema will be the next target in the next few days. But what amazes me is the EV sector, which is beating the IXIC. Aside from TSLA, they are all Chinese, so this makes the reading biased, but it is interesting that the sector seem to be ready for a bullish reversal, and we have a Descending Triangle there:
The most famous Chinese stocks (aside the EV stocks) are beating the market a lot too, going up more than 7%, after yesterday’s crash:
However, what’s interesting is that the gaming sector is also quite strong, going up more than 2% today.
I wouldn’t say that the FAANGs are not strong anymore, because they are. It just seems that today’s volatility made other sectors appear more interesting against them. Yesterday the Chinese stocks underperformed the market, so it seems today’s movement is about right.
There are many good stocks around, trading at appealing levels, even among the tech stocks. We just need to search for them.
If you liked this analysis, remember to follow me to keep in touch with my daily updates, and support this idea if you liked it!
Thank you very much!
Daily Market Update for 7/27Summary: Earnings reports releasing this week have been very positive, but investors are already looking beyond the reports to expectations for the second half of the year. With mounting fears around the new Delta variant of COVID and potential changes in monetary policy by the Fed, the major indexes retreated today.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, July 27, 2021
Facts: -1.21%, Volume lower, Closing range: 51%, Body: 48%
Good: Lower volume on pullback, longer lower wick from bounce at 14,500 support.
Bad: Lower high, lower low, dip below 21d EMA
Highs/Lows: Lower high, lower low
Candle: Half red body above half lower wick, no upper wick
Advanced/Decline: 0.28, more than three declining stocks for every advancing stock
Indexes: SPX (-0.47%), DJI (-0.24%), RUT (-1.13%), VIX (+10.01%)
Sectors: Utilities (XLU +1.72%) and Real Estate (XLRE +0.80%) at the top. Consumer Discretionary (XLY -1.01%) and Communications (-1.19%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Earnings reports releasing this week have been very positive, but investors are already looking beyond the reports to expectations for the second half of the year. With mounting fears around the new Delta variant of COVID and potential changes in monetary policy by the Fed, the major indexes retreated today.
The Nasdaq closed with a -1.21% loss in a mostly selling session before a bounce at the 14,500 support level. Volume was lower than the previous day. The bounce brought the index back up to the middle of the candle for a 51% closing range. The 48% red body is in the upper half of the candle, over a long lower wick. There were more than three declining stocks for every advancing stock.
The Russell 2000 (RUT) dropped -1.13%. The S&P 500 (SPX) declined -0.47%. The Dow Jones Industrial Average (DJI) retreated -0.24%.
The VIX volatility index rose +10.01%.
Utilities (XLU +1.72%) and Real Estate (XLRE +0.80%) were the top two sectors, with the other defensive sectors filling out the top four. Growth sectors were at the bottom of the sector list, with Consumer Discretionary (XLY -1.01%) and Communications (-1.19%) having the most considerable losses.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Month over month Durable Goods Orders came in much lower than expected. The market didn't seem to react to the data immediately, but it may have played into the morning selling. Consumer Confidence numbers came in higher than expected.
The US Dollar (DXY) declined -0.17%.
The US 30y and 10y Treasury yields declined while the 2y Treasury Yield advanced.
High Yield Corporate Bond (HYG) prices declined for a second day, while Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) declined while Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) advanced +2.77%. Ethereum (ETHUSD) advanced +1.44%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.869. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index is in the Fear area, moved almost back to Extreme Fear.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps declined for the day. Amazon (AMZN) declined -1.98%, touching its 21d exponential moving average line before recovering some losses. Alphabet (GOOGL) lost -1.59%. Apple (AAPL) closed down -1.49%. Microsoft (MSFT) fell back -0.87%.
Verizon (VZ), Berkshire Hathaway (BRK.A, BRK.B), Pfizer (PFE), and Pepsico (PEP) were the top mega-cap gainers for the day. Alibaba (BABA) bottomed the list again. Intel (INTC), PayPal (PYPL), and Alphabet (GOOG) made up the rest of the bottom four.
Only three stocks in the daily update growth list gained today. Fiverr (FVRR), D.R. Horton (DHI), and MongoDB (MDB) were the gainers. The biggest losers were all Chinese stocks. NIO (NIO), Ehang Holdings (EH), UP Fintech (TIGR), and FUTU Holdings (FUTU) were at the bottom of the list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Goods Trade Balance data, Retail Inventories, and Crude Oil Inventories will be available on Wednesday. Following two days of meetings, the Fed will make a statement in the afternoon and announce any Interest Rate change (expected to be none). The tone of the message and press conference will have an impact on investor sentiment.
Earnings reports on Wednesday include Facebook (FB), PayPal (PYPL), Pfizer (PFE), Thermo Fisher Scientific (TMO), Shopify (SHOP), McDonald's (MCD), Qualcomm (QCOM), Boeing (BA), ADP (ADP), Ford (F), Spotify (SPOT), and ServiceNow (NOW).
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq dipped below the 21d exponential moving average line before getting support at 14,500 and bouncing back above the key moving average line.
The trend-line from the 7/19 low ends with a +1.79% gain for tomorrow. The five-day trend line points to a +0.79% gain.
The one-day trend line leads to a further -1.21% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It's tough to see what was on investors' minds today. Perhaps they see all the great earnings reports as a top, and from here, the performance of these companies will pull back a bit. Maybe it's simply buying the rumor, selling the news. Or it could be that investors were getting defensive against any possible disappointment from the big tech earnings. For whatever reason, we got a negative expectation breaker for today.
It's possible for the afternoon dip buying to continue into tomorrow for more gains. However, after several days of gains last week and the market at all-time highs yesterday, another day or two of pullback is possible. Expectation is for sideways or lower.
Stay healthy and trade safe!
Daily Market Update for 7/26Summary: Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, July 26, 2021
Facts: +0.03%, Volume higher, Closing range: 69%, Body: 27%
Good: Slight gain on higher volume, healthy pause
Bad: A/D low but not surprising with sideways move
Highs/Lows: Higher high, higher low
Candle: Thin green body in the middle of a short candle
Advanced/Decline: 0.57, almost two declining stocks for every advancing stock
Indexes: SPX (+0.24%), DJI (+0.24%), RUT (+0.33%), VIX (+2.33%)
Sectors: Energy (XLE +2.47%) and Materials (XLB +0.84%) at the top. Industrials (XLI -0.05%) and Health (XLV -0.65%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week.
The Nasdaq closed the day with a small +0.03% gain. It traded up and down throughout the day but stayed within a tight range. Volume was higher for the day. A thin green body sits in the middle of the short candle, with equal upper and lower wicks. The closing range was 69%. There were almost two declining stocks for every advancing stock.
The Russell 2000 (RUT) gained +0.33%. The small-cap index was up 1% in the morning before being rejected at its 21d exponential moving average. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) both rose +0.24%.
The VIX volatility index advanced +2.33%.
Energy (XLE +2.47%) and Materials (XLB +0.84%) led the sector list today. The Materials sector, along with metal commodities, are being boosted by higher demand in manufacturing. Industrials (XLI -0.05%) and Health (XLV -0.65%) were at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
New Home Sales for June were lower than expected. That may be a welcome relief for investors worried about the overheated sector and the risk exposure it brings to the economy.
The US Dollar (DXY) declined -0.30%.
The US 30y and 10y Treasury yields advanced while the 2y Treasury Yield declined.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) advanced while Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined slightly.
Timber (Wood) advanced.
Copper (COPPER1!) continued its advance after a massive move up on Friday.
Aluminum (ALI1!) also advanced.
Bitcoin (BTCUSD) ended the day with a +6.14% advance but was up 15% intra-day after Amazon posted a crypto-related job opening.
Ethereum (ETHUSD) advanced +2.51% for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.640. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index is in the Fear area.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN) gained +1.18% for the day, leading the largest four mega-caps. Alphabet (GOOGL) advanced +0.77%. Apple (AAPL) rose +0.29%. Microsoft (MSFT) was the only of the four with a loss, declining -0.21%.
Exxon Mobil (XOM) lead the mega-caps today, with Intel (INTC), Tesla (TSLA), and Walt Disney (DIS) filling out the top four. At the bottom of the list was Alibaba (BABA), with a -7.15% loss as Chinese stocks continue to get beaten down. Novo Nordisk (NVO), Nvidia (NVDA), and Abbot Labs (ABT) were also at the bottom of the list.
At the top of the daily update growth list were Zoom (ZM), Penn National Gaming (PENN), Lemonade (LMND), and Tesla (TSLA). At the bottom of the list were Chinese stocks JD.com (JD), FUTU Holdings (FUTU), Alibaba (BABA), and Twitter (TWTR).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Durable Goods Orders data made available before the market opens on Tuesday indicates the level of economic activity. Analysts expect June to be higher than May after the May number came in lower than expected.
CB Consumer Confidence for July will also be available in the morning after the market opens. An update to API Weekly Crude Oil Stock arrives after the market closes.
Three of the largest companies in the world report earnings on Tuesday. Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL) are all expected to report strong year-over-year growth, but investors will be looking to guidance for future quarters. Visa (V), United Parcel Service (UPS), Starbucks (SBUX), Raytheon (RTX), 3m (MMM), AMD (AMD), General Electric (GE), Southern Copper (SCCO), Enphase (ENPH), Teladoc (TDOC), and Logitech (LOGI) are some of the other interesting companies also reporting on Tuesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq moved sideways today, setting a new all-time high and record close.
The five-day trend line points to a +1.45% gain for tomorrow. The trend-line from the 7/19 low ends with a +1.09% gain.
The one-day trend line is nearly flat and points to a -0.03% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It was a wild ride for small-caps in the morning. Investors bought up small-caps in the early morning, given the supportive economic conditions for the segment. But after the market opened, the US dollar dropped sharply, and that may have spooked investors. As the dollar stabilized and regained some of the initial loss, so did small-caps and the Russell 2000 ended the day outperforming the other indices.
The news will be dominated by earnings reports and the Fed meeting this week. Three of the largest companies report tomorrow. The Fed will meet and release a statement on monetary policy on Wednesday.
The expectation is for sideways or higher tomorrow.
Stay healthy and trade safe!
Market Week in Review - 7/19/2021 - 7/23/2021Summary: This week ended much better than it began. All indications at the market open on Monday were that we were going to have a bearish week. The CNN Fear & Greed indicator was in the Extreme Fear range, and the put/call ratio was nearing 0.9. Worries about the new delta strain putting new pressures on the economic recovery sent investors into defensive sectors.
Notes
The 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.
I occasionally have some errors or typos and will correct them in my blog or 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.
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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, July 19, 2021
Facts: -1.06%, Volume higher, Closing range: 71%, Body: 29%
Good: Support around 14,200, good closing range
Bad: Lower on higher volume, lower high, lower low
Highs/Lows: Lower high, lower low
Candle: Green body in center of candle, even upper and lower wicks
Advanced/Decline: 0.27, more than three declining stocks for every advancing stock
Indexes: SPX (-1.59%), DJI (-2.09%), RUT (-1.51%), VIX (+21.96%)
Sectors: Consumer Staples (XLP -0.30%) and Health (XLV -1.05%) at the top. Financials (XLF -2.80%) and Energy (XLE -3.53%) were bottom.
Expectation: Sideways or Lower
The new Delta variant of the Coronavirus was top of mind for investors as the trading week began. Share prices of COVID vaccine-related companies soared today as it appeared governments would need to double down on vaccination efforts.
The Nasdaq finished with a -1.06% loss for the day on higher volume. The index found support at the 14,200 level, closing with a 71% closing range above a 29% body that is right in the middle of the candle. The lower high and lower low continues a downtrend as more than three stocks declined for every stock that advanced today.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, July 20, 2021
Facts: +1.57%, Volume higher, Closing range: 80%, Body: 59%
Good: Broad gains on higher volume to move back above 21d EMA
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Bullish green body with higher low and higher high, medium size upper and lower wicks
Advanced/Decline: 2.69, more than five advancing stocks for every two declining stocks
Indexes: SPX (+1.52%), DJI (+1.62%), RUT (+2.99%), VIX (-12.32%)
Sectors: Industrials (XLI +2.80%) and Financials (XLF +2.48%) at the top. Utilities (XLU +0.43%) and Consumer Staples (XLP +0.03%) were bottom.
Expectation: Sideways or Higher
Small caps ended several days of losing to lead stocks higher today as investors snapped out of the pandemic fears that caused Monday's selling. Investors are warming back up to small caps as the US Dollar strengthens and yields in bonds are beginning to stabilize.
The Nasdaq finished with a +1.57% gain on higher volume than the previous day. The 59% green body and 80% closing range represent a day of constant buying that ended with some profit-taking in the last few minutes before the market close. The index closed yesterday's gap down and regained the 21d exponential moving average, closing at the 14,500 support area. There were more than five advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, July 21, 2021
Facts: +0.92%, Volume lower, Closing range: 99%, Body: 92%
Good: Close at high of day, bullish green body, A/D ratio
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: No upper wick, very tiny lower wick, mostly green body
Advanced/Decline: 2.36, almost five advancing stocks for every two declining stocks
Indexes: SPX (+0.82%), DJI (+0.83%), RUT (+1.81%), VIX (-9.23%)
Sectors: Energy (XLE +3.49%) and Financials (XLF +1.72%) at the top. Real Estate (XLRE -0.30%) and Utilities (XLU -1.10%). were bottom.
Expectation: Sideways or Higher
Stocks continued to rebound from last week's dip, with small caps leading the march upward, keeping the advance/decline ratio above 2.0 for a second day. Investors are looking more optimistic about the economic recovery among solid earnings reports from market leaders.
The Nasdaq closed the day a +0.92%. Volume was lower, but buyers dominated the entire, with almost five advancing stocks for every declining stock. The candle has no upper wick because of the 99% closing range, and the green body covers 92% of the candle.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, July 22, 2021
Facts: +0.36%, Volume lower, Closing range: 87%, Body: 42%
Good: High closing range with higher high and higher low
Bad: Low volume, low A/D ratio
Highs/Lows: Higher high, higher low
Candle: Longer lower wick, a medium size green body in upper half
Advanced/Decline: 0.32, three declining stocks for every advancing stock
Indexes: SPX (+0.20%), DJI (+0.07%), RUT (-1.55%), VIX (-1.23%)
Sectors: Technology (XLK +0.74%) and Health (XLV +0.74%) at the top. Financials (XLF -1.09%) and Energy (XLE -1.12%) were bottom.
Expectation: Sideways or Lower
Rising jobless claims surprised the market this morning, sending cyclical sectors lower and causing a reversal in small caps after several days of gains. Investors rotated back into growth stocks and big tech, which are more resilient to the swings in the economy.
The Nasdaq finished the day with a +0.36% on lower volume than the previous day. The day ended with an 87% closing range for the index. A 45% body sits in the upper half of the candle, above a long lower wick formed in the morning as investors absorbed the economic news.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, July 23, 2021
Facts: +1.04%, Volume higher, Closing range: 94%, Body: 57%
Good: High closing range on higher volume
Bad: A/D still below 1.0
Highs/Lows: Higher high, higher low
Candle: Gap up at open after several green days, mostly green body in upper half of candle
Advanced/Decline: 0.69, About three declining stocks for every two advancing
Indexes: SPX (+1.01%), DJI (+0.68%), RUT (+0.46%), VIX (-2.77%)
Sectors: Communications (XLC +2.48%) and Utilities (XLU +1.28%) at the top. Financials (XLF +0.17%) and Energy (XLE -0.37%) were bottom.
Expectation: Sideways or Higher
A rally in Social media stocks helped send the major indexes to new all-time highs. The optimism spread to other big tech stocks, giving the Nasdaq a high volume advance but leaving the advance/decline ratio below 1.0.
The Nasdaq finished with a +1.04% gain on higher volume to reach a new record close. The green candle caps a week of all green candles compared to the previous week's all red candles. Today's candle had a 57% green body in the upper half of the candle. The 94% closing range represents a day of bullish buying after a quick dip in the morning created the lower wick. There were almost three declining stocks for every two advancing stocks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
View on the Week
This week ended much better than it began. All indications at the market open on Monday were that we were going to have a bearish week. The CNN Fear & Greed indicator was in the Extreme Fear range, and the put/call ratio was nearing 0.9. Worries about the new delta strain putting new pressures on the economic recovery sent investors into defensive sectors.
The Nasdaq gapped down at open on Monday and continued to drop until it reached the 14,200 level. The index found support at that level and reversed. The upside reversal didn't end until a new all-time high was reached on Friday.
The 14,200 support area formed from the February and April highs. It became resistance in June before the index moved higher. On Monday, the index tested the level several times, and the support was held. This will be a critical area to watch if another pullback occurs in the coming weeks.
After the index found support, it just took a few pieces of good news to get the rally back on track. That news came in a few forms.
First, earnings reports were largely positive this week. IBM, Johnson & Johnson, Coca-Cola, and Intel all had great earnings reports. But the biggest surprise of the week was SNAP, which beat estimates and doubled revenue from a year earlier on robust advertising income. That was enough to send the entire Communications sector higher.
Another boost to big tech came in analyst upgrades for Nvidia and Microsoft. Analysts improved their price targets for the two companies ahead of earnings.
Finally, OPEC helped a bit by deciding to increase production to meet a forecast of higher demand. That's a great indicator of confidence in the continuing economic recovery. The news sent the Energy sector higher on Wednesday.
Small caps in the Russell 2000 outperformed on Tuesday and Wednesday. The segment sold off the last three weeks, causing valuations to be lower than the larger cap segments. With the low valuations combined with a strengthening USD and continuing low Treasury yields, it was a perfect context for small caps to get an influx of investment.
Chinese stocks such as Alibaba, JD.com, UP Fintech, and FUTU Holdings were beaten down this week on fears that the Chinese government will crack down on companies listed in foreign exchanges.
The Nasdaq advanced +2.84% for the week, recovering all of the previous week's loss and closing at an all-time high. Volume was lower than the previous week. The lower low and higher high for the week create an outside bullish candle with a 99% closing range.
Along with the Nasdaq, the S&P 500 (SPX) and Dow Jones Industrial Average (DJI) closed the week at all-time highs, advancing +1.96% and +1.08%. The Russell 2000 (RUT) had its first weekly gain in four weeks, rising +2.15%.
The VIX volatility declined -6.78% for the week.
Utilities ( XLU ) dropped to the bottom of the sector list after leading in the previous week. It was all about Growth stocks this week as investors put off fears of the economy and looked forward to record earnings reports from big tech.
Communication Services ( XLC ) led the week thanks to huge earnings beat by SNAP and Twitter. Consumer Discretionary ( XLY ) and Technology ( XLK ) were second and third.
Energy ( XLE ) briefly moved into the top spot on Wednesday afternoon before falling back and ending the week in second-to-last place. Only Utilities and Energy declined for the week.
Yields for the US 30y, 10y, and 2y Treasuries all dropped for the week. The yields continue to slide, and the gap between long-term and short-term yields is tightening.
Both High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced.
The US Dollar (DXY) advanced +0.21% for the week.
Silver (SILVER) declined -1.93%, and Gold (GOLD) declined -0.52%.
Crude Oil (CRUDEOIL1!) declined -0.13%.
Timber (WOOD) advanced +1.89%.
Copper (COPPER1!) advanced +4.07%.
Aluminum (ALI1!) advanced +1.00%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Big Four Mega-caps
The four largest mega-caps had strong performances this week. Alphabet (GOOGL) gained +4.76% after the SNAP earnings call boosted the entire communications sector. Microsoft (MSFT) gained +3.18% thanks to a price target upgrade. Amazon (AMZN) advanced +2.32%. Apple (AAPL) gained +1.48%. All four are trading above their 10w and 40w moving average lines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Four Recovery Stocks
I picked four recovery stocks to track against the indexes and other indicators in this weekly report. All four have green candles this week, although Exxon Mobil (XOM) could not hold onto intra-week highs, ending the week with a -0.49% loss. Carnival Cruise Lines (CCL) climbed by +4.97%. Marriott (MAR) gained +3.06%. Delta Airlines (DAL) advanced +0.87%. Delta and Carnival are trading below both the 10w and 40w moving average lines. Exxon and Marriott are trading above the 40w line but remain below the 10w line.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Cryptocurrency
I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth).
The cryptocurrencies got a boost this week with another mention from Elon Musk. Ethereum (ETHUSD) had the biggest gain, advancing +14.17%. Bitcoin (BTCUSD) rose +7.24%. Litecoin (LTCUSD) gained +4.94%. Bitcoin Cash (BCHUSD) gained +3.06%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio (PCCE) rose above 0.9 on Monday but then recovered, ending the week at 0.702.
The CNN Fear & Greed Index moved into the Extreme Fear level late last week. It moved back toward neutral but remained on the Fear side.
The NAAIM Money Manager exposure index declined to 71.04 this week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Week Ahead
Big tech will dominate the earnings calendar this week. The earnings reports will be as important as the economic news calendar.
There are a lot of earnings reports, and I won't try to list them all here. Check your portfolio for earnings events to prevent surprises.
Monday
New Home Sales data will be available on Monday morning after the market opens.
Tesla (TSLA) on Monday will kick off a full week of big tech earnings.
Tuesday
Durable Goods Orders data made available before the market opens on Tuesday indicates the level of economic activity. Analysts expect June to be higher than May after the May number came in lower than expected.
CB Consumer Confidence for July will also be available in the morning after the market opens. An update to API Weekly Crude Oil Stock arrives after the market closes.
Three of the largest companies in the world report earnings on Tuesday. Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL) are all expected to report strong year-over-year growth, but investors will be looking to guidance for future quarters. Visa (V), United Parcel Service (UPS), Starbucks (SBUX), Raytheon (RTX), 3m (MMM), AMD (AMD), General Electric (GE), Southern Copper (SCCO), Enphase (ENPH), Teladoc (TDOC), and Logitech (LOGI) are some of the other interesting companies also reporting on Tuesday.
Wednesday
Goods Trade Balance data, Retail Inventories, and Crude Oil Inventories will be available on Wednesday. The Fed will make a statement in the afternoon and announce any Interest Rate change (expected to be none). The tone of the message and press conference will have an impact on investor sentiment.
Earnings reports on Wednesday include Facebook (FB), PayPal (PYPL), Pfizer (PFE), Thermo Fisher Scientific (TMO), Shopify (SHOP), McDonald's (MCD), Qualcomm (QCOM), Boeing (BA), ADP (ADP), Ford (F), Spotify (SPOT), and ServiceNow (NOW).
Thursday
GDP data for Q2 will publish on Thursday. Initial Jobless Claims and Pending Home Sales will also get an update.
Amazon.com (AMZN), Mastercard (MA), AstraZeneca (AZN), Twilio (TWLO), Baidu (BIDU), Pinterest (PINS), Fortinet (FTNT), DexCom (DXCM), Yum! Brands (YUM), and Expedia (EXPE) are a few earnings reports that stand out among another huge list.
Friday
New inflation data becomes available on Friday with the updated PCE Price index data for June. Additional Employment Data and Consumer Sentiment data becomes available as well.
Berkshire Hathaway (BRKa), Procter & Gamble (PG), Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX),
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bullish Side
Earnings season is in full swing. Every earnings season is a bit different. Many of the first reports beat expectations, and investors reacted positively to the news. This week brings the big tech earnings reports, which should also be very positive. The reaction will provide a lift to the big tech stocks and the overall market.
Treasury Yields stabilized this week after several days of volatility. With the US Dollar strengthening and yields remaining low, investors will continue to look at US equities to get returns that beat still high inflation.
The economic recovery may be slowing, but it is still growing at a record pace. Debt is still cheap for companies to fund growth and profit from the global recovery.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bearish Side
Supply chain challenges continue to be a top worry as the recovery moves forward. Manufacturing PMI data on Friday shows an increase in activity for the sector, but challenges keep popping up with raw materials and shipping constraints. Extreme weather events in Germany and China made issues worse this week.
As valuations among big tech and growth stocks continue to soar and the indexes are at all-time highs, expectations will also be at all-time highs. Investors will be watching closely to earnings reports, the results, the guidance, and the dialogue on earnings calls. Investors may see great reports this week and decide to take profits "at the top."
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Key Nasdaq Levels to Watch
The Nasdaq set another all-time high this week after moving back above the 21d EMA. If the index pulls back, the most critical level is around 14,200. A break below that level would signal a bearish double-top pattern.
On the positive side, the levels are:
The high of this past week was a new all-time high at 14,846.06.
The round number 15,000 is likely to be a new area of resistance.
On the downside, there are a few key levels:
The 10d MA is at 14,595.36.
The 21d EMA is at 14,510.57.
14,500 has been a support area in the past.
14,178.66 is the low of the past week. A break below this level would signal a bearish double top.
The 50d MA is at 14,118.58.
14,000 has been an area of support/resistance.
There is a pivot at 13,548.93.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Two weeks with opposite characteristics. The previous week gave us give red candles while this week gave us five green candles. The volatility in bonds and equities was enough to raise some fears among investors but not enough to drive a correction.
It looks like we could get some more gains this week with the big tech earnings reports among hundreds of other earnings reports. The reports so far have huge year-over-year comparisons in results, but investors are also getting positive guidance for the year.
If we do not get gains and the index pulls back again, watch for the 14,200 level to hold. If we dip below that level, it would be a bearish signal.
Good luck, stay healthy, and trade safe!
Daily Market Update for 7/23Summary: A rally in Social media stocks helped send the major indexes to new all-time highs. The optimism spread to other big tech stocks, giving the Nasdaq a high volume advance but leaving the advance/decline ratio below 1.0.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, July 23, 2021
Facts: +1.04%, Volume higher, Closing range: 94%, Body: 57%
Good: High closing range on higher volume
Bad: A/D still below 1.0
Highs/Lows: Higher high, higher low
Candle: Gap up at open after several green days, mostly green body in upper half of candle
Advanced/Decline: 0.69, About three declining stocks for every two advancing
Indexes: SPX (+1.01%), DJI (+0.68%), RUT (+0.46%), VIX (-2.77%)
Sectors: Communications (XLC +2.48%) and Utilities (XLU +1.28%) at the top. Financials (XLF +0.17%) and Energy (XLE -0.37%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
A rally in Social media stocks helped send the major indexes to new all-time highs. The optimism spread to other big tech stocks, giving the Nasdaq a high volume advance but leaving the advance/decline ratio below 1.0.
The Nasdaq finished with a +1.04% gain on higher volume to reach a new record close. The green candle caps a week of all green candles compared to the previous week's all red candles. Today's candle had a 57% green body in the upper half of the candle. The 94% closing range represents a day of bullish buying after a quick dip in the morning created the lower wick. There were almost three declining stocks for every two advancing stocks.
Both the S&P 500 (SPX) and Dow Jones Industrial Average (DJI) finished with record closes, advancing +1.01% and +0.68%. The Russell 2000 (RUT) was a bit more volatile this week but ended Friday with a +0.46% gain for the day.
The VIX volatility index declined -2.77%.
Communications (XLC +2.48%) outperformed the other sectors thanks to a greater-than 20% advance by SNAP after surprising investors with robust advertising revenue. Utilities (XLU +1.28%) was the second sector, signaling investors nervousness as the indexes reach new tops. Financials (XLF +0.17%) and Energy (XLE -0.37%) were the bottom two sectors.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Manufacturing purchasing managers index (PMI) data was stronger than expected, while Services PMI was weaker than expected.
The US Dollar (DXY) advanced +0.08% for the day.
The US 30y Treasury Bond yield moved up slightly while the 10y and 2y Treasury Yields declined somewhat.
High Yield Corporate Bond (HYG) prices advanced. Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) advanced.
Copper (COPPER1!) made a massive move with a +3.37% advance. That's very bullish for the global economy.
Aluminum (ALI1!) also advanced.
Bitcoin (BTCUSD) advanced +4.28%. Ethereum (ETHUSD) advanced +5.10%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.702. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index is in the Fear area, heading toward Neutral.
The NAAIM money manager exposure index declined to 71.04 this week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Alphabet (GOOGL) led the mega-caps with a +3.58% gain influenced by positive earnings reports from SNAP and Twitter that showed solid growth in the advertising business. The company joined Microsoft in reaching new all-time highs this week. Microsoft (MSFT) gained +1.23%, adding to its record close yesterday. Apple (AAPL) advanced +1.20%. Amazon (AMZN) gained +0.51%.
Facebook (FB) and Alphabet (GOOGL) led the mega-cap list. Shopify (SHOP) and Mastercard (MA) were third and fourth. Each had gains greater than 3%, while Facebook rose more than 5%. Intel (INTC) lost -5.29%, ending the day at the bottom of the list. The other biggest losers for the day were Alibaba (BABA), Oracle (ORCL), and Tesla (TSLA).
Communications stocks SNAP (SNAP), Roku (ROKU), Pinterest (PINS), and Facebook (FB) dominated the top of the daily update growth list. There were still quite a few losers in the growth list, with the Chinese stocks suffering from negative news again. FUTU Holding (FUTU), Ehang Holdings (EH), and UP Fintech (TIGER) were the bottom three.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
New Home Sales data will be available on Monday morning after the market opens.
Tesla (TSLA) on Monday will kick off a full week of big tech earnings.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq is closed at all-time highs today. I removed the trend-line from the 7/13 high since we have a new high now. The five-day trend line will turn into a longer-term trend-line as I start tracking the latest rally.
The five-day trend line points to a +1.06% gain for Friday.
The one-day trend line ends with a +0.98% gain.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
What a difference a week makes. It seemed last week that we were heading to correction territory and Monday appeared to confirm that direction. Then support was found at the 14,200 area, and a new rally begins. Five green candles in a row to complete a bullish outside week.
Given the bullishness of today, the expectation is for sideways or higher on Monday. Investors will be looking for a pullback and may find any reason to get defensive. However, investors are rewarding positive earnings reports this quarter, and nothing indicates that we won't continue to get positive reports from big tech next week.
Stay healthy and trade safe!
Nasdaq Bull Market Over? Near perfect symmetry says soNo one will read this which is a shame as the Super Cycle wave relationships are as close to perfect as possible; meeting all of the Elliott Wave Theory standard fib relationship criteria. Everyone is calling a top soon, but I don't think they fully understand the length of correction we're likely entering.
After today's price action, super cycle wave 5 is now 1.6178x the length of Wave 1 (if you don't know why this is important/significant, you should research to find out -- it'll blow your mind). Wave 3 still remains at 1.6883 of wave 1. Initial retrace target of wave 2 is to the 0.382 fib retracement at 9195.83. If this level breaks, then we are open to hit 5705.10 (this might be getting a little ahead of ourselves, but fib levels are well respected in this market). This full 5 wave super cycle was ~2440 weeks, so a compromise on fibonnaci time (0.382) proportionality means it may be 932 weeks until we see an end to wave 2.
This almost seems ridiculous to talk about and project like this, but all cycles on all time frame are always a fractal part of a larger set and I contend we've completed a Grand Duper Cycle Wave 1, comprised of five Super Cycle waves. There is an extensive amount of fib confluence over head from today's highs and I'm betting we don't go any higher than 15,300 before a prolonged market collapse with INITIAL TARGETS of nearly 40% from the highs.
Here are my super cycle begin/end points for each of the 5 waves.
Wave Date Hi/Low Amount
Beg 3---Oct-74. 54.87
Wave 1--- 10-Mar-00 5132.52
Wave 2 ---9-Mar-09 1265.62
Wave 3--- 19-Feb-20 9838.37
Wave 4 ---23-Mar-20 6631.42
Wave 5 ---23-Jul-21 14846.06
I'm not used to really sharing this with people as I usually fade into the back ground, but I'm happy to put this little bit together for you. I'd love to hear yours too.
Nasdaq Completes Super Cycle Wave 5 -with Fib Confluences GaloreIf you zoom out on the Nasdaq using a 13D chart, you'll see a clear 5 wave sequence having recently completed. This argument is bolstered by both wave 3 and wave 5 which are 1.618 extensions of wave 1. Wave 3 and Wave 5 are both identical in length. Using this Wave count you'll also see a myriad of confluent fib levels, extensions, etc; but I'm trying to spare you a convoluted chart.
To me this says we are at a super cycle top and have completed Grand Super Cycle wave 1. At the Nasdaq's recent all time high, we cleared the 2.618 of wave 1 by less than 2%.
If you even remotely respect the Elliott Wave guidelines,, you know what this means. There really isn't a downside limit (well, the all time lows around 50 in 1974) and this likely means we are entering a years or decades long Wave 2 correction.
Nasdaq Completes Super Cycle Wave 5 -with Fib Confluences GaloreIf you zoom out on the Nasdaq using a 13D chart, you'll see a clear 5 wave sequence having recently completed. This argument is bolstered by both wave 3 and wave 5 which are 1.618 extensions of wave 1. Wave 3 and Wave 5 are both identical in length. Using this Wave count you'll also see a myriad of confluent fib levels, extensions, etc; but I'm trying to spare you a convoluted chart.
To me this says we are at a super cycle top and have completed Grand Super Cycle wave 1. At the Nasdaq's recent all time high, we cleared the 2.618 of wave 1 by less than 2%.
If you even remotely respect the Elliott Wave guidelines,, you know what this means. There really isn't a downside limit (well, the all time lows around 50 in 1974) and this likely means we are entering a years or decades long Wave 2 correction.
Daily Market Update for 7/22Summary: Rising jobless claims surprised the market this morning, sending cyclical sectors lower and causing a reversal in small caps after several days of gains. Investors rotated back into growth stocks and big tech, which are more resilient to the swings in the economy.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, July 22, 2021
Facts: +0.36%, Volume lower, Closing range: 87%, Body: 42%
Good: High closing range with higher high and higher low
Bad: Low volume, low A/D ratio
Highs/Lows: Higher high, higher low
Candle: Longer lower wick, a medium size green body in upper half
Advanced/Decline: 0.32, three declining stocks for every advancing stock
Indexes: SPX (+0.20%), DJI (+0.07%), RUT (-1.55%), VIX (-1.23%)
Sectors: Technology (XLK +0.74%) and Health (XLV +0.74%) at the top. Financials (XLF -1.09%) and Energy (XLE -1.12%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Rising jobless claims surprised the market this morning, sending cyclical sectors lower and causing a reversal in small caps after several days of gains. Investors rotated back into growth stocks and big tech, which are more resilient to the swings in the economy.
The Nasdaq finished the day with a +0.36% on lower volume than the previous day. The day ended with an 87% closing range for the index. A 45% body sits in the upper half of the candle, above a long lower wick formed in the morning as investors absorbed the economic news.
The Russell 2000 (RUT) declined -1.55%, losing most of the gains from the previous day. The S&P 500 (SPX) gained +0.20%, while the Dow Jones Industrial Average (DJI) gained only +0.07%.
The VIX volatility index declined -1.23%.
Technology (XLK +0.74%) led the sector list, helped along by big tech. Health (XLV +0.74%) had a nearly equivalent gain to also land at the top. Financials (XLF -1.09%) and Energy (XLE -1.12%) were at the bottom of the list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Both Continuing Jobless Claims and Initial Jobless Claims came in higher than expected. The numbers are still higher than pre-pandemic levels, so an unexpected uptrend is alarming to analysts. Existing Home Sales data came in lower than expected.
The US Dollar (DXY) advanced +0.06% for the day.
The US 30y, 10y, and 2y Treasury Yields all declined slightly today.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices both advanced today.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) advanced.
Copper (COPPER1!) advanced, and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +0,35%. Ethereum (ETHUSD) advanced +0.90%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.714. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved back into Fear (instead of Extreme Fear), heading toward Neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The four largest mega-caps all gained for the day. Microsoft (MSFT) led the group with a +1.68% advance and a new all-time high, thanks to a price target upgrade from Citi. Amazon (AMZN) climbed by +1.47%. Apple (AAPL) gained +0.96%. Alphabet (GOOGL) rose +0.68%. All four are trading above key moving average lines.
Danaher Corporation (DHR), Salesforce.com (CRM), Thermo Fisher Scientific (TMO), and Adobe (ADBE) were the top mega-cap gainers for the day. Bank of America (BAC), JP Morgan (JPM), Exxon Mobil (XOM), and Taiwan Semiconductor (TSM) were at the bottom of the list.
Despite the focus on growth stocks today, the daily update list is about half gainers and half losers. The top of the list includes CloudFlare (NET), Crowdstrike (CRWD), Snowflake (SNOW), and Etsy (ETSY). At the bottom of the list are Chinese stocks FUTU Holding (FUTU), Ehang Holding (EH), and UP Fintech (TIGR), all with losses greater than 7%.
SNAP (SNAP) is up over 16% in after-hours trading after an earnings beat and doubling revenue from a year earlier. Twitter (TWTR) was up nearly 5%, showing better than expected growth in its earnings release.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
The Manufacturing and Services purchasing manager indexes released on Friday will be another indicator of economic activity and the speed of the recovery.
Friday's earning reports include Honeywell (HON), American Express (AXP), and Schlumberger (SLB).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq is making a slow but steady climb back to all-time highs.
The five-day trend line points to a +0.29% gain for Friday.
The one-day trend line ends with a +0.14% gain.
The trend line from the 7/13 high points to a -1.39% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The unexpected economic data that arrived this morning took some steam out of the broader rally while rotating investment back into big tech and a focused list of growth stocks. Give the lower volume and the low advance/decline ratio, the gains today were rather weak. Therefore, the expectation for tomorrow will be sideways or lower.
One might also expect investors to be nervous heading into the weekend, considering the unknowns around the pandemic and economic recovery.
Stay healthy and trade safe!
Daily Market Update for 7/21Summary: Stocks continued to rebound from last week's dip, with small caps leading the march upward, keeping the advance/decline ratio above 2.0 for a second day. Investors are looking more optimistic about the economic recovery among solid earnings reports from market leaders.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, July 21, 2021
Facts: +0.92%, Volume lower, Closing range: 99%, Body: 92%
Good: Close at high of day, bullish green body, A/D ratio
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: No upper wick, very tiny lower wick, mostly green body
Advanced/Decline: 2.36, almost five advancing stocks for every two declining stocks
Indexes: SPX (+0.82%), DJI (+0.83%), RUT (+1.81%), VIX (-9.23%)
Sectors: Energy (XLE +3.49%) and Financials (XLF +1.72%) at the top. Real Estate (XLRE -0.30%) and Utilities (XLU -1.10%). were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Stocks continued to rebound from last week's dip, with small caps leading the march upward, keeping the advance/decline ratio above 2.0 for a second day. Investors are looking more optimistic about the economic recovery among solid earnings reports from market leaders.
The Nasdaq closed the day a +0.92%. Volume was lower, but buyers dominated the entire, with almost five advancing stocks for every declining stock. The candle has no upper wick because of the 99% closing range, and the green body covers 92% of the candle.
The Russell 2000 (RUT) led for a second day, as the US Dollar remains in an uptrend and makes undervalued small caps more attractive. The RUT closed with a +1.81% gain today. The S&P 500 (SPX) gained +0.82%, while the Dow Jones Industrial Average (DJI) climbed +0.83%.
The VIX volatility index declined -9.23%.
Energy (XLE +3.49) jumped to the top of the sector list as investors became more optimistic about the recovery. Financials (XLF) was the second-best sector, thanks to rising Treasury yields. At the bottom of the sector list are Real Estate (XLRE -0.30%) and Utilities (XLU -1.10%).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Crude Oil Inventories came in higher than expected, but that did not dampen investors' outlook for oil. The 20y Treasury auction was weak, helping Treasury Yields to rise.
The US Dollar (DXY) declined -0.20% for the day.
The US 30y, 10y, and 2y Treasury Yields all rose today. The 20y auction was weak, helping long-term yields to increase further.
High Yield Corporate Bond (HYG) prices continue to bounce back from Monday's dip. Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) advanced, and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices advanced sharply.
Timber (Wood) advanced.
Copper (COPPER1!) advanced, and Aluminum (ALI1!) declined.
Crypto is back in vogue after another mention from Elon Musk. Bitcoin (BTCUSD) advanced +7.70%. Ethereum (ETHUSD) advanced +10.82%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.619. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index moved back into Fear (instead of Extreme Fear), heading toward Neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL) declined -0.51% after topping the mega-cap list yesterday. Alphabet (GOOGL) gained +1.06%. Microsoft (MSFT) advanced +0.74%. Amazon (AMZN) rose +0.34%. All four closed above their 21d exponential moving average line.
ASML Holding (ASML), Nvidia (NVDA), Exxon Mobile (XOM), and JP Morgan (JPM) were the top mega-caps for the day. Netflix (NFLX) was the worst-performing mega-cap today after subscriber growth stalled and the company missed earnings estimates. Thermo Fisher Scientific (TMO), Tesla (TSLA), and Apple were also at the bottom of the mega-cap list.
Growth stocks had another great day. At the top of the daily update list were UP Fintech (TIGR), DraftKings (DKNG), Lemonade (LMND), and NIO (NIO). The only losers in the list were Zynga (ZNGA), Tesla (TSLA), and Zoom Video (ZM).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
The weekly Initial Jobless Claims become available on Thursday before the market opens. After the market opens, Investors will get Existing Home Sales data for June.
Intel (INTC), Abbott Labs (ABT), AT&T (T), Snap (SNAP), ABB (ABB), Twitter (TWTR), DR Horton (DHI), Southwest Airlines (LUV), Dominos Pizza (DPZ), and American Airlines (AAL) release earnings on Thursday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq moved back toward all-time highs as seems to be putting a quick correction behind.
The one-day trend line points to a +0.39% gain for Thursday.
The five-day trend line ends in a -1.02% decline, which would be just above the 21d EMA.
The trend line from the 7/13 high points to a -1.92% decline for Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
While fears grow about the impact of the Delta variant around the world, there is still high optimism for the US economic recovery, supported by upbeat earnings reports in the past two weeks. The combination of fear in other economies and optimism in the US economy put the US Dollar in an uptrend relative to other world currencies.
As investment flows into the US Dollar, global investors need a place to put that money to use. Since Treasury yields remain low, we see investors seek out returns in equities and high-yield corporate bonds. In addition to these favorable conditions, small-cap valuations are low compared to larger-cap stocks. That's helping the Russell 2000 lead the other major indexes in gains the past two days.
The expectation is for sideways or higher tomorrow. Keep an eye on the Zweig Breadth Thrust Indicator.
Stay healthy and trade safe!
Daily Market Update for 7/20Summary: Small caps ended several days of losing to lead stocks higher today as investors snapped out of the pandemic fears that caused Monday's selling. Investors are warming back up to small caps as the US Dollar strengthens and yields in bonds are beginning to stabilize.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, July 20, 2021
Facts: +1.57%, Volume higher, Closing range: 80%, Body: 59%
Good: Broad gains on higher volume to move back above 21d EMA
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Bullish green body with higher low and higher high, medium size upper and lower wicks
Advanced/Decline: 2.69, more than five advancing stocks for every two declining stocks
Indexes: SPX (+1.52%), DJI (+1.62%), RUT (+2.99%), VIX (-12.32%)
Sectors: Industrials (XLI +2.80%) and Financials (XLF +2.48%) at the top. Utilities (XLU +0.43%) and Consumer Staples (XLP +0.03%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Small caps ended several days of losing to lead stocks higher today as investors snapped out of the pandemic fears that caused Monday's selling. Investors are warming back up to small caps as the US Dollar strengthens and yields in bonds are beginning to stabilize.
The Nasdaq finished with a +1.57% gain on higher volume than the previous day. The 59% green body and 80% closing range represent a day of constant buying that ended with some profit-taking in the last few minutes before the market close. The index closed yesterday's gap down and regained the 21d exponential moving average, closing at the 14,500 support area. There were more than five advancing stocks for every declining stock.
The Russell 2000 (RUT) soared back into action with a +2.99% gain today. The Dow Jones Industrial Average (DJI) also gained a significant +1.62%, helped by industrials and recovery stocks. The S&P 500 (SPX) closed with a +1.52% gain for the day.
The VIX volatility index declined -12.32%.
In a reversal from yesterday, all sectors gained for the day. Industrials (XLI +2.80%) and Financials (XLF +2.48%) led the sector list. Utilities (XLU +0.43%) and Consumer Staples (XLP +0.03%) were at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Building Permits data released this morning was lower than expected, but Housing Starts was higher than expected.
The US Dollar (DXY) advanced +0.15% for the day.
The US 30y and 10y Treasury Yields rose while the 2y Treasury Yield dropped.
High Yield Corporate Bond (HYG) prices bounced back from a sharp decline yesterday. Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices recovered some from the sharp decline on Monday. The drop on Monday was a result of OPEC's decision to increase output.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -3.99%. Ethereum (ETHUSD) declined -2.21%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio dropped to 0.592. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. Below that level is overly bullish.
The CNN Fear & Greed index is still in Extreme Fear but moving back toward Neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All big four mega-caps bounced back from yesterday's losses. Apple (AAPL) gained +2.60%, closing the gap from yesterday. Alphabet (GOOGL) gained +1.31%. Microsoft (MSFT) advanced +0.83%. Amazon (AMZN) rose -+0.66% to close back above its 21d exponential moving average.
Apple was the top-performing mega-cap for the day, followed by Mastercard (MA), Pfizer (PFE), and Tesla (TSLA). There were only a handful of mega-caps losing for the day, with Novo Nordisk (NVO), Nvidia (NVDA), Procter & Gamble (PG), and Verizon (VZ) at the bottom of the list.
Growth stocks in the daily update list did very well today. Top performers included Upwork (UPWK), Peloton (PTON), Square (SQ), and SNAP (SNAP).
The worst performers were Zoom (ZM), Pinterest (PINS), JD.com (JD), and Nvidia.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Crude Oil Inventories are the primary economic data for Wednesday, although some may be interested in Mortgage data released before the market opens.
Johnson & Johnson (JNJ), ASML Holding (ASML), Coca-Cola (KO), Verizon (VZ), and Fidelity Financial (FNF) are some of the interesting reports for Wednesday. Analysts will listen closely to Coca-Cola statements around supply chain costs and whether they are transferring increased costs along to consumers.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq moved back above the 21d EMA and closed right at the 14,500 support area.
If momentum carries through to tomorrow, the one-day trend line points to a +1.98% gain.
The five-day trend line and trend line from the 7/13 high points to a ~1.90% decline for Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Fears melted away today as investors pivoted back into growth stocks and small caps. The Russell 2000 rebounded sharply with investors moving out of bonds and betting on the lower valuations of small caps compared to the mega-caps.
We had a positive expectation breaker today, which is always welcome. The expectation for tomorrow is sideways or higher for tomorrow, although watch for any indication that today was just a technical bounce before moving lower. If we do move higher, the Russell 2000 is likely to outperform for the next leg up. Let's see.
Stay healthy and trade safe!
