NASDAQ Big ViewThis is the target point nasdaq should touch. It keeps upward trends until it touch the point 20,542.62. As in my analysis, NASDAQ is currently having 3 wave. The 4th wave is predicted to be on April 2022. Let's see how it goes.
UUUS Composite Index
19,714.99USDR
+123.75+0.63%
At close at Jun 10, 23:22 GMT
USD
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Daily Market Update for 8/13Summary: Consumer Sentiment data released this morning was lower than during the height of the pandemic, signaling the public is exhausted from wave after wave of COVID cases. The market didn't overreact to the surprisingly low data, but caution was present with yields dropping and sectors used as defensive investments soaring.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Friday, August 13, 2021
Facts: +0.04%, Volume higher, Closing range: 48%, Body: 4%
Good: Higher high, higher low
Bad: Very low A/D ratio, couldn't hold intraday high
Highs/Lows: Higher high, higher low
Candle: Indecisive doji star candle with thin red body
Advanced/Decline: 0.36, almost three declining stocks for every advancing stock
Indexes: SPX (+0.16%), DJI (+0.04%), RUT (-0.93%), VIX (-0.77%)
Sectors: Consumer Staples (XLP +0.83%) at Utilities (XLU +0.70%) at the top. Financials (XLF -0.75%) and Energy (XLE -1.18%) at the bottom.
Expectation: Sideways
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Market Overview
Consumer Sentiment data released this morning was lower than during the height of the pandemic, signaling the public is exhausted from wave after wave of COVID cases. The market didn't overreact to the surprisingly low data, but caution was present with yields dropping and sectors used as defensive investments soaring.
The Nasdaq closed with a slight +0.04% gain. Volume was a bit higher than the previous day. The doji star candle has a small thin body sitting in the middle of two equal-length wicks. The candle shows indecision and is often a bearish reversal in an uptrend. There were almost three declining stocks for every advancing stock.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) could still close with another set of records. The S&P 500 gained +0.16% while the Dow Jones advanced +0.04%. The Russell 2000 (RUT) declined -0.93%
The VIX volatility index declined -0.77%.
The defensive sectors topped the sector list today, with Consumer Staples (XLP +0.83%) and Utilities (XLU +0.70% leading the way. Cyclical sectors did not do well, with Financials (XLF -0.75%) and Energy (XLE -1.18%) sitting at the bottom of the sector list.
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Economic Indicators
Export Price Index data was higher than expected, while Import Price Index data was lower than expected. The big surprise was the Consumer Expectations and Consumer Sentiment data, which dropped lower than 2020 and the lowest point in a decade.
The US Dollar (DXY) declined -0.51%.
The US 30y, 10y, and 2y Treasury yields declined for the day.
The gap between long and short-term yields tightened.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced for the third day.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +7.40%. Ethereum (ETHUSD) advanced +9.11%. (Time of writing)
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Market Leaders
Three of the four largest mega-caps advanced today. Microsoft (MSFT) led the way with a +1.05% gain, closing at another all-time high. Alphabet (GOOGL) rose +0.39%. Amazon (AMZN) continues to barely stay above its 200d simple moving average line, declining -0.29%.
Pfizer (PFE), Nvidia (NVDA), Salesforce.com (CRM), and Microsoft led the mega-cap list today. At the bottom of the list is JP Morgan (JPM), Bank of America (BAC), Wells Fargo (WFC), and Alibaba (BABA).
The daily update growth list had more losers than gainers, but the top gainers did very well. Robinhood (HOOD), DataDog (DDOG), and DoorDash (DASH) all had greater than 3% gains. Snowflake (SNOW) was the fourth best of the day. GrowGeneration (GRWG) dropped almost 12%, moving nearly 30% lower over the last two days. Digital Turbine (APPS), Ehang Holdings (EH), and Enphase (ENPH) round out the bottom four in the list.
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Investor Sentiment
The put/call ratio dropped to 0.644. 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 is in the Fear range, moving toward neutral.
The NAAIM exposure index remained about the same at 97.55.
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Looking ahead
Manufacturing data from New York will be available before the market open on Monday.
Roblox (RBLX), Paysafe (PSFE), Niu Tech (NIU), and Porch Group (PRCH) are a few of the interesting earnings reports for Monday.
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq moved sideways today and gave a bearish signal with a red doji star candle.
The trend from the 7/19 low points to a +0.56% gain for Monday.
The one-day trend line points to a -0.11% decline.
The five-day trend line ends with a -0.38% decline.
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Wrap-up
The Consumer Sentiment data slowed down the market rally but didn't reverse trends today. While the S&P 500 and Dow Jones set new records, the Nasdaq signaled a possible reversal. We'll have to wait until Monday to find out if the signal is confirmed. Investors got cautious heading into the weekend, dropping yields and giving a boost to the defensive sectors.
The doji style candle is possibly a bearish reversal signal in an uptrend, but the trend right now is more sideways. It's a weak signal, so the expectation for Monday is set to Sideways, and we let the market tell us what it wants to do.
Stay healthy and trade safe!
Daily Market Update for 8/12Summary: Jobs data helped boost the markets to more records today, with big tech helping lead the way higher. The S&P 500 and Dow Jones Industrial Average closed at record highs for the third day in a row.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Thursday, August 12, 2021
Facts: +0.35%, Volume higher, Closing range: 94%, Body: 52%
Good: Another test with support at 21d EMA, green body over long lower wick
Bad: Low A/D ratio, lower high
Highs/Lows: Lower high, higher low
Candle: Inside day, green body covers upper half of the candle.
Advanced/Decline: 0.49, two declining stocks for every advancing stock
Indexes: SPX (+0.30%), DJI (+0.04%), RUT (-0.28%), VIX (-3.05%)
Sectors: Health (XLV +0.79%) and Technology (XLK +0.57%) at the top. Materials (XLB -0.16%) and Industrials (XLI -0.10%) at the bottom.
Expectation: Sideways
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Market Overview
Jobs data helped boost the markets to more records today, with big tech helping lead the way higher. The S&P 500 and Dow Jones Industrial Average closed at record highs for the third day in a row.
The Nasdaq finished the day with a +0.35% gain on slightly higher volume than the previous day. The index declined after open but found support at the 21d exponential moving average line and moved higher the rest of the day. The 52% green body covers the upper half of the candle. The rally in the afternoon resulted in a 94% closing range. A lower high and higher low marks another inside day for the Nasdaq. There were two declining stocks for every advancing stock.
The S&P 500 (SPX) closed the day with a +0.30% gain. The Dow Jones Industrial Average (DJI) climbed by +0.04%. The Russell 2000 (RUT) fell back -0.28%.
The VIX volatility index declined -3.05%.
Cyclical sectors fell back to the bottom of the sector list after leading for two days. Health (XLV) and Technology (XLK), which were at the bottom of the list yesterday, bounced back to the top of the sector list today. Materials (XLB) and Industrials (XLI) were the worst-performing sectors for the day.
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Economic Indicators
Continuing Jobless Claims data was better than expected while Initial Jobless Claims matched the forecast. Produce Price Index Data was higher than expected, adding to inflation worries since higher producer prices eventually get passed along to higher consumer prices.
The US Dollar (DXY) advanced +0.11%.
The US 30y Treasury yield was flat while the 10y and 2y Treasury yields rose for the day.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced for a second day.
Silver (SILVER) declined while Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -3.35%. Ethereum (ETHUSD) declined -4.91%. (Time of writing)
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Market Leaders
All four largest mega-caps advanced, with Apple (AAPL) leading the way. Apple gained +2.08% for the day. Microsoft (MSFT) advanced +1.00%. Alphabet (GOOGL) gained +0.67%. All three seem to be getting good support at their 21d EMA. Amazon (AMZN) tested its 200d moving average line before ending the day with a +0.35% advance. The Amazon chart is still in a clear decline.
Salesforce.com (CRM), Apple (AAPL), Tesla (TSLA), and Pfizer (PFE) topped the list of mega-caps today, all gaining over 2%. At the bottom of the list are Intel (INTC), Visa (V), Alibaba (BABA), and Exxon Mobil (XOM).
The daily update growth stock is about half gainers and half losers. The top gainers were Palantir (PLTR), DraftKings (DKNG), Chewy (CHWY), and Snowflake (SNOW). The worst performing in the list today is NIO (NIO), Robinhood (HOOD), Lemonade (LMND), and GrowGeneration (GRWG).
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Investor Sentiment
The put/call ratio dropped to 0.670. 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 is in the Fear range, moving toward neutral.
The NAAIM exposure index remained about the same at 97.55.
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Looking ahead
Export and Import Price index data will wrap up the week's inflation data, while Consumer Sentiment data will give a reading on how consumers are weathering the resurging pandemic.
There are no interesting earnings reports for the daily update on Friday.
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq got support again at the 21d exponential moving average line. The same line is supporting three of the largest big tech companies as well.
The one-day trend line and trend from the 7/19 low points to a +0.61% gain for Friday.
The five-day trend line ends with a -0.55% decline.
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Wrap-up
Jobs data shows continued strength in the economic recovery, a positive sign for more growth in the second half of the year. After rotating into Infrastructure stocks the past two days, the market snapped back to the technology stocks that dominate the Nasdaq. However, the gains were not broadly shared, with more than two declining stocks for every advancing stock in the index.
The chart is still in a downtrend after hitting a record close last week. Today's inside day, with a green body and long lower wick, is a positive. However, there is still an open question on whether the Nasdaq will reverse the trend. The expectation for tomorrow is sideways, and we'll watch where the market wants to go next.
Stay healthy and trade safe!
Daily Market Update for 8/11Summary: Recovery and value stocks helped send the S&P 500 and Dow Jones to yet another record close on the day after the Infrastructure bill made it through the Senate.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Wednesday, August 11, 2021
Facts: -0.16%, Volume higher, Closing range: 48%, Body: 46%
Good: Support at 21d EMA, rally after support creates longer lower wick
Bad: Lower high, morning selling after hitting intraday high
Highs/Lows: Lower high, lower low
Candle: Red body covers upper half of candle, long lower wick covers lower half.
Advanced/Decline: 0.83, more declining stocks than advancing stocks
Indexes: SPX (+0.25%), DJI (+0.62%), RUT (+0.49%), VIX (-4.35%)
Sectors: Materials (XLB +1.41%) and Industrials (XLI +1.30%) at the top. Technology (XLK +0.01%) and Health (XLV -0.99%) at the bottom.
Expectation: Sideways or Lower
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Market Overview
Recovery and value stocks helped send the S&P 500 and Dow Jones to yet another record close on the day after the Infrastructure bill made it through the Senate.
The Nasdaq closed with a loss of -0.16%. Volume was slightly higher than the previous day. The index opened up with a short rally to the intraday high and then sold off through the morning until getting support at the 21d exponential moving average before moving higher. The action created a long lower wick underneath a 46% red body and a 48% closing range. There were more declining stocks than advancing stocks on the growth-heavy Nasdaq. Beyond the Nasdaq, there were far more advancing stocks than declining stocks in the US markets.
The Dow Jones Industrial Average (DJI) led the major indexes for another day with a +0.62% gain for another record close. The S&P 500 (SPX) also had a record close, advancing +0.25% today. The Russell 2000 (RUT) gained +0.49%.
The VIX volatility index declined -4.25%.
Cyclical sectors led the sector list for another day, with Materials (XLB +1.41%) and Industrials (XLI +1.30%) performing the best with a boost from the Infrastructure bill progress. At the bottom of the list was Health Services (XLV -0.99%), weighed down by losses from several large vaccine providers.
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Economic Indicators
Inflation data available this morning included no huge surprises. The core consumer price index came in slightly lower than expected. Crude Oil Inventories showed lower demand than forecast. There was good demand for the 10-year Treasury Note auction in the afternoon, helping send yields lower.
The US Dollar (DXY) declined -0.19%.
The US 30y Treasury yield was flat while the 10y and 2y Treasury yields declined for the day.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced after several days of decline.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +0.03%. Ethereum (ETHUSD) advanced +0.79%. (Time of writing)
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Market Leaders
Apple (AAPL) and Microsoft (MSFT) gained +0.18% today as they continue getting support at their 21d exponential moving average lines. Alphabet (GOOGL) is well above the key moving average line but lost -0.39% today. Amazon (AMZN) tested its 200d simple moving average line today and ended the day with a -0.86% decline.
Wells Fargo (WFC), Home Depot (HD), Bank of America (BAC), and JP Morgan Chase (JPM) were the top mega-cap gainers today. Pfizer (PFE) declined -3.90% after data showed its vaccine might be less effective against the Delta variant of the COVID virus. Other mega-caps at the bottom of the list include Nvidia (NVDA), Visa (V), and Eli Lilly (LLY).
The daily update growth list did a little better than yesterday but was still primarily decliners today. Etsy (ETSY), D.R Horton (DHI), DataDog (DDOG), and RH (RH) were the top four gainers on the list. At the bottom of the list are FUTU Holding (FUTU), Crowdstrike (CRWD), Robinhood (HOOD), and Cloudflare (NET).
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Investor Sentiment
The put/call ratio advanced to 0.749. 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 is in the middle of the Fear range, moving toward neutral.
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Looking ahead
The Produce Price Index data publishes on Thursday. We'll also get an update of Jobless Claims data that surprised investors last week.
Wednesday's earnings reports include Walt Disney (DIS), Airbnb (BNB), DoorDash (DAH), Baidu (BIDU), Palantir (PLTR), Xpeng (XPEV), and LifeMD (LFMD).
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq got support at the 21d EMA today before recovering some of the morning losses.
The trend from the 7/19 low points to a +1.00% gain for Thursday.
The five-day and one-day trend lines end with a -0.22% decline.
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Wrap-up
There are no surprises today as the Infrastructure Bill moves investors back into recovery and value stocks, focused on those stocks likely to benefit from the spending bill. The Nasdaq declined for a second day as the rotation pulled people away from growth stocks that make up the index.
There were many bullish indicators in the market today. Inflation is not out of control. Earnings reports continue to be strong, with positive outlooks. Demand for 10y Treasury notes remains high. Commodities advanced. Major indexes set record closes.
Based on the chart, the Nasdaq got support at the 21d EMA today but is trending downward and may continue moving sideways or lower over the next few days as the current rotation completes.
Stay healthy and trade safe!
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.
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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
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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.
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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)
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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.
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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.
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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.
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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.
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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 8/10Summary: Value stocks were in the spotlight today after the passing of the infrastructure bill in the Senate initiated a rotation into cyclical sectors. The result was new record closes for the Dow Jones and S&P 500.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Tuesday, August 10, 2021
Facts: -0.49%, Volume lower, Closing range: 24%, Body: 71%
Good: Higher high, lower volume on decline
Bad: Lower low, low closing range
Highs/Lows: Higher high, lower low
Candle: Outside day made of mostly selling after the morning high.
Advanced/Decline: 0.66, three declining stocks for every advancing stock
Indexes: SPX (+0.10%), DJI (+0.46%), RUT (+0.20%), VIX (+0.42%)
Sectors: Energy (XLE +1.76%) and Materials (XLB +1.51%) at the top. Technology (XLK -0.72%) and Real Estate (XLRE -1.07%) at the bottom.
Expectation: Sideways or Lower
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Market Overview
Value stocks were in the spotlight today after the passing of the infrastructure bill in the Senate initiated a rotation into cyclical sectors. The result was new record closes for the Dow Jones and S&P 500.
The Nasdaq closed with a -0.49% loss for the day. Volume was lower than the previous day. Three stocks declined for every two advancing stocks. The index attempted a rally in the morning but sold off quickly, resulting in a 71% red body and 24% closing range. The lower wick is longer than the upper wick. The higher high and lower low create an outside day following two inside days.
The Dow Jones Industrial Average (DJI) advanced +0.46%, and the S&P 500 (SPX) rose +0.10%. Both closed at new records. The Russell 2000 (RUT) also closed the day with a gain, advancing +0.20%.
The VIX volatility index advanced +0.42%.
The four cyclical sectors led the sector list, with Energy (XLE +1.76%) and Materials (XLB +1.51%) topping the list. Only three sectors declined for the day. Technology (XLK -0.72%) and Real Estate (XLRE -1.07%) were the worst-performing sectors of the day.
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Economic Indicators
Nonfarm Productivity for Q2 as well as Unit Labor Costs was lower than expected. API Weekly Crude Oil stock showed lower than expected demand. The Senate passed the Infrastructure Bill, which had the most significant influence on today's market.
The US Dollar (DXY) advanced +0.11%.
The US 30y, 10y, and 2y Treasury yields advanced for the day. The yield curve continues to steepen.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -1.43%. Ethereum (ETHUSD) declined -0.79%. (Time of writing)
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Investor Sentiment
The put/call ratio declined to 0.557. 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 is in the middle of the Fear range, moving toward neutral.
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Market Leaders
All four largest mega-caps declined for the day, weighed down by the strengthening US dollar and rising Treasury yields. Alphabet (GOOGL) declined -0.08% after closing at a new high yesterday. Apple (AAPL) dropped -0.34% while Microsoft (MSFT) lost -0.66%. Both tested their 21d exponential moving average lines and found support. Amazon (AMN) declined -0.63% and continues to trade around its 200d simple moving average.
Pfizer (PFE) topped the mega-cap list today as the COVID resurgence continues to grow, prompting more demand for vaccines. Walmart (WMT), Wells-Fargo (WFC), and Bank of America (BAC) filled out the top four mega-caps for the day. Salesforce.com (CRM), Nvidia (NVDA), Taiwan Semiconductor (TSM), and PayPal (PYPL) were the worst-performing mega-cap stocks for the day.
The daily update growth list had mostly losses today. Top gainers included RH (RH), DoorDash (DASH), Etsy (ETSY), and Cloudflare (NET). At the bottom of the list are MongoDB (MDB), Roku (ROKU), RobinHood (HOOD), and Digital Turbine (APPS).
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Looking ahead
We'll get another look at inflation data on Wednesday with an update to the Consumer Price Index data in the morning. Crude Oil Inventories will come after the market opens. There is a 10y Treasury Note auction in the afternoon.
Nio (NIO), eBay (EBAY), Opendoor (OPEN), Bumble (BMBL), Wendy's (WEN), and Lordstown Motors (RIDE) release earnings on Wednesday.
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq faded after a quick rally after the market open.
The trend from the 7/19 low points to a +0.91% gain for Wednesday.
The five-day trend line ends with a +0.37% gain.
The one-day trend would put the index just above the 21d EMA with a -0.57% decline.
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Wrap-up
Infrastructure FTW. Today's passing of the infrastructure bill had investors rotating into value stocks that are sensitive to economic cycles. Tomorrow we'll get new inflation data that may shift investor sentiment further into value or swing them back toward growth.
Based on the outside day with a sizeable red body, the expectation for tomorrow is Sideways or Lower.
Stay healthy and trade safe!
Daily Market Update for 8/9Summary: It was another inside day for the Nasdaq as the market entered the week with caution. The Delta variant of the virus continues to rise while positive employment data is turning the Fed toward more tapering discussion. The combination drove the dollar higher and Treasury prices lower.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Monday, August 9, 2021
Facts: +0.16%, Volume lower, Closing range: 71%, Body: 5%
Good: Higher low, small gain on otherwise cautious day
Bad: Lower high, indecisive day
Highs/Lows: Lower high, higher low
Candle: Another inside day, indecisive candle with thin body in the upper half
Advanced/Decline: 0.67, three declining stocks for every advancing stock
Indexes: SPX (-0.09%), DJI (-0.30%), RUT (-0.58%), VIX (+3.53%)
Sectors: Health (XLV +0.38%) and Consumer Staples (XLP +0.37%) at the top. Real Estate (XLRE -0.45%) and Energy (XLY -1.41%) at the bottom.
Expectation: Sideways
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Market Overview
It was another inside day for the Nasdaq as the market entered the week with caution. The Delta variant of the virus continues to rise while positive employment data is turning the Fed toward more tapering discussion. The combination drove the dollar higher and Treasury prices lower.
The Nasdaq ended the day with a small advance, gaining +0.16%. The thin 5% body is in the upper half of the candle, which has a lower high and higher high than the previous day. That's the second inside day in a row as the market consolidates before choosing a direction. The closing range of 71% is a positive signal, but there were three declining stocks for every two advancing stocks.
The S&P 500 (SPX) declined -0.09%. The Dow Jones Industrial Average (DJI) fell -0.30%. Both closed at record highs on Friday. The Russell 2000 (RUT) lost -0.58%.
The VIX volatility index advanced +3.53%.
Only three sectors had gains today, with defensive sectors leading the list. Health (XLV +0.38%) and Consumer Staples (XLP +0.37%) were the top two sectors. Both sectors got a boost from fears of rising cases of COVID around the world. Financials (XLF +0.26%) was third in the list, benefiting from higher yields on Treasuries. Real Estate (XLRE -0.45%) and Energy (XLY -1.41%) were at the bottom of the sector list.
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Economic Indicators
The JOLTs Job Openings report for June came in higher than expected, reinforcing the robust employment data last week.
The US Dollar (DXY) advanced +0.20%.
The US 30y, 10y, and 2y Treasury yields advanced for the day.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) advanced +5.33%. Ethereum (ETHUSD) advanced +3.95%. (Time of writing)
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Investor Sentiment
The put/call ratio declined to 0.644. 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 is in the middle of the Fear range.
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Market Leaders
Only Alphabet (GOOGL) gained for the day, advancing +0.87%. Microsoft (MSFT) and Apple (AAPL) lost -0.39% and -0.03% but remained above their 21d exponential moving average lines. Amazon (AMZN) declined -0.09% and remained below the 21d EMA line and the 50d simple moving average line.
Tesla (TSLA), Pfizer (PFE), Eli Lilly (LLY), and Bank of America (BAC) were the top four mega-caps for the day. Accenture (ACN), United Health (UNG), Mastercard (MA), and Exxon Mobil (XOM) were the worst-performing mega-caps today.
FUTU Holdings (FUTU), Fastly (FSLY), UP Fintech (TIGR), and Fiverr (FVRR) were the top stocks of the day in the daily update growth list. At the bottom of the list is Workday (WDAY), Penn National Gaming (PENN), DataDog (DDOG), and Digital Turbine (APPS).
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Looking ahead
Nonfarm Productivity and Unit Labor Costs data will be available Tuesday morning, while Weekly Crude Oil Stock will get an update after the market closes.
Earnings reports for Tuesday include Coinbase (COIN), Unity Software (U), Upstart (UPST), and Open Lending (LPRO).
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq had its second inside day in a row as it consolidates before choosing a direction.
All three trend lines point to a gain for tomorrow in the range from +0.36% for the one-day trend line to a +0.55% gain for the five-day trend line.
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Wrap-up
The market continues to toil with worries of the Delta variant of COVID while data shows a solid economic recovery, especially in the labor market. The rising number of COVID cases raises fears around new lockdowns that could impact the global economic recovery. On the other hand, the recovery in the labor market is a positive sign for the economy. However, it raises concerns around when the Fed will start tapering fiscal support, a topic that is becoming increasingly political.
Investors are also watching closely the infrastructure bill, which could reach a vote in the Senate early in the week. Progress on the bill will finally take away some questions around government investment, but then attention will turn toward the $3.5 trillion reconciliation.
Today's candle on the Nasdaq chart signals indecision for investors. So an expectation of Sideways tomorrow could turn into a higher or lower move.
Stay healthy and trade safe!
Market Week in Review - 8/2/2021 - 8/6/2021Summary: Where does the market want to go next? That is the question to be answered after a week of mixed economic news met with COVID fears and uncertainty around what's happening with the infrastructure bill and government debt. Equity markets set new record highs as Treasury yields rose, setting up a possible pivot for next week.
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.
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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
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.
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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
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.
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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
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.
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Thursday, August 5, 2021
Facts: +0.78%, Volume lower, Closing range: 99%, Body: 84%
Good: Large green body, high closing range with good A/D ratio
Bad: Lower volume
Highs/Lows: Higher high, higher low
Candle: Large green body over a small lower wick, no upper wick
Advanced/Decline: 1.73, more than three advancing stocks for every declining stock
Indexes: SPX (+0.60%), DJI (+0.78%), RUT (+1.81%), VIX (-3.84%)
Sectors: Financials (XLF +1.31%) and Energy (XLE +1.13%) at the top. Materials (XLB -0.14%) and Health (XLV -0.41%) at the bottom.
Expectation: Sideways or Higher
The indexes set records again today after the morning jobless report came in better than expected. The anticipation of more positive news in Friday's employment data sent Treasury Yields and US equities higher.
The Nasdaq closed at a new record high with a +0.78% gain today. Volume was lower than the previous day. After breaking into a new record level, the index moved sideways for the afternoon before a rally into the close that left the candlestick with an 84% green body and 99% closing range. There were more than three stocks that advanced for every two stocks that declined.
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Friday, August 6, 2021
Facts: -0.4%, Volume higher, Closing range: 46%, Body: 28%
Good: Higher low, support after morning rotation dip
Bad: Higher volume pullback from all time high
Highs/Lows: Lower high, higher low
Candle: Inside day with small red body in upper half of candle
Advanced/Decline: 0.84, more declining stocks than advancing stocks
Indexes: SPX (+0.17%), DJI (+0.41%), RUT (+0.53%), VIX (-6.54%)
Sectors: Financials (XLF +2.02%) and Materials (XLE +1.45%) at the top. Real Estate (XLRE -0.17%) and Consumer Discretionary (XLY -0.68%) at the bottom.
Expectation: Sideways or Higher
The S&P 500 and Dow Jones closed at new record highs while the Nasdaq pulled back in a rotation from growth to cyclical sectors. Positive employment data in the morning added to the possibility of agreement on a $1 trillion infrastructure bill that pushed investors towards the cyclical sectors.
The Nasdaq declined -0.4% for the day on higher volume than the previous day. The 28% red body is high in the candle, with a longer lower wick than the upper wick, creating a 46% closing range. The lower high and higher low make an inside day. There were more declining stocks than advancing stocks on the Nasdaq, but more broadly, gaining stocks outnumbered losing stocks in the NYSE.
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View on the Week
Where does the market want to go next? That is the question to be answered after a week of mixed economic news met with COVID fears and uncertainty around what's happening with the infrastructure bill and government debt. Equity markets set new record highs as Treasury yields rose, setting up a possible pivot for next week.
The week began with manufacturing data that showed a slowing economic recovery. While the markets opened with gains, the gains were given back throughout a day of selling. It didn't help that the Delta variant of COVID continues to grow wildly as local governments begin enforcing new rules to help deal with the resurgence in the pandemic.
Nonfarm Employment data from ADP on Wednesday came in lower than expected, adding to the worries. That sent yields lower on treasuries and sent indexes lower, although the Nasdaq held onto a gain for the day. That all changed over the next two days.
Thursday's weekly continuing jobless claims showed a change in the employment trend, surprising investors and setting up for more positive employment news on Friday. Treasury yields moved higher while the gap between long-term and short-term treasuries widened significantly, bringing back worries from February of a steepening yield curve. The result was a reversal of the big tech and growth trade back into cyclical stocks on Friday. The Nasdaq dropped while the other indexes moved higher, setting more records.
Adding to the momentum for cyclicals, the infrastructure bill is making progress in Congress and could see a vote as early as this weekend. There are still hurdles to overcome for the bill, and the government is still dealing with a possibly long fight over the debt ceiling.
Investors showed caution throughout the week, and reactions to earnings reports were massive. Solar Edge (SEDG) and DataDog (DDOG) had gains of over 15% following their positive earnings reports and improved guidance. On the other hand, Roku (ROKU) declined -10%, Lemonade (LMND) dropped -13%, Zynga lost -20%, and Fastly fell a massive -25%, after signaling caution for the remainder of the year in their earnings calls.
Robinhood (HOOD) hit the headlines as a new meme-stock with huge swings throughout the week. At one point, the recent IPO stock was up 140% for the week. It gave back a lot of those gains but still ended up 56% for the week.
The Nasdaq advanced +1.11% for the week, setting a new all-time high on Thursday. The higher high and higher low, as well as the 81% closing range, is a bullish week. However, the long lower wick shows that sellers were still present. On the daily chart, a rising wedge will meet up with additional resistance at 15,000 that may cause a pullback before moving higher. Volume was higher than the previous week.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) closed the week at new records with +0.94% and +0.78% gains. The Russell 2000 (RUT) gained +0.97% for the week.
The VIX volatility declined -11.35% for the week.
Several sectors rallied into the lead throughout the week, but Financials ( XLF ) came from behind to end the week as the top sector. On Friday, the sector added 2% on top of gains earlier in the week. The rally came as employment data was better than expected, sending Treasury yields higher and brightening the prospects for big bank performance tied to the yields.
Utilities ( XLU ) enjoyed the top spot on Monday and early Tuesday, rallied again on Thursday, but fell to second place on Friday. The defensive sector shows investors were cautious throughout the week as indexes set new records amidst worries the rising Delta variant might pull back the economic recovery.
Health Services ( XLV ) took the lead spot on Wednesday, likely on the view that there will be an increased demand for vaccines and therapies that can handle the resurgence of the pandemic.
Consumer Staples ( XLP ) was the only sector to decline this week, putting it at the bottom of the sector list.
Yields for the US 30y, 10y, and 2y Treasuries all rose for the week. The yield curve steepened for the week, reversing a trend of a tightening gap between long-term and short-term yields.
Both High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices declined. The gap between junk bonds and treasury yields widened.
The US Dollar (DXY) advanced +0.75% for the week. Much of that gain came on Friday as investors reacted to solid employment data.
Silver (SILVER) declined -4.49%, and Gold (GOLD) declined -2.84%.
Crude Oil (CRUDEOIL1!) declined -7.63%.
Timber (WOOD) declined -0.39%.
Copper (COPPER1!) declined -2.55%.
Aluminum (ALI1!) declined -0.88% but remains near record highs.
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Big Four Mega-caps
Microsoft (MSFT) had the biggest gain this week, advancing +1.60% as it nears a new all-time high. Alphabet (GOOGL) closed the week with a +0.75%, its highest weekly close on record. Amazon (AMZN) gained +0.52%, recovering some from last week's massive drop. Apple (AAPL) gained +0.19%. Only Amazon is trading below the 10w moving average.
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The Four Recovery Stocks
I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Three of the four had gains this week. Carnival Cruise Lines (CCL) soared +6.61% for the week, although it is still well below the 10w and 40w moving average lines. Delta Airlines (DAL) gained +1.05%. Exxon Mobil (XOM) climbed by +0.50%. Marriott (MAR) dropped -3.01% for the week but closed above both moving average lines.
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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).
Ethereum (ETHUSD) continues to outperform the other three with a +22.00% gain this week. Bitcoin (BTCUSD) gained +10.76%. Litecoin (LTCUSD) and Bitcoin Cash (BCHUSD) are still trading near or below moving averages despite gaining +9.25% and +8.94% this week.
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Investor Sentiment
The put/call ratio (PCCE) ended the week at 0.713.
The CNN Fear & Greed Index ended the week in the middle of the Fear range after dipping into Extreme Fear earlier in the week.
The NAAIM money manager exposure index rose to 97.72.
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The Week Ahead
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
Next week will open with the JOLTs Job Openings data on Monday morning.
BioNTech (BNTX), Trade Desk (TTD), Tyson Foods (TSN), AMC Entertainment (AMC), Chegg (CHGG), Cable One (CABO), Curaleaf (CURLF), Tilray (TLRY), Xpel (XPEL), Rocket Pharma (RCKT), SUMO Logic (SUMO), and Vuzix (VUZI) are some of the companies opening up another busy earnings week with reports on Monday.
Tuesday
Nonfarm Productivity and Unit Labor Costs data will be available Tuesday morning, while Weekly Crude Oil Stock will get an update after the market closes.
Earnings reports for Tuesday include Coinbase (COIN), Unity Software (U), Upstart (UPST), and Open Lending (LPRO).
Wednesday
We'll get another look at inflation data on Wednesday with an update to the Consumer Price Index data in the morning. Crude Oil Inventories will come after the market opens. There is a 10y Treasury Note auction in the afternoon.
Nio (NIO), eBay (EBAY), Opendoor (OPEN), Bumble (BMBL), Wendy's (WEN), and Lordstown Motors (RIDE) release earnings on Wednesday.
Thursday
The Produce Price Index data publishes on Thursday. We'll also get an update of Jobless Claims data that surprised investors last week.
Wednesday's earnings reports include Walt Disney (DIS), Airbnb (BNB), DoorDash (DAH), Baidu (BIDU), Palantir (PLTR), Xpeng (XPEV), and LifeMD (LFMD).
Friday
Export and Import Price index data will wrap up the week's inflation data, while Consumer Sentiment data will give a reading on how consumers are weathering the resurging pandemic.
There are no interesting earnings reports for the daily update on Friday.
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The Bullish Side
Economic data this week suggested businesses are pushing forward with the recovery despite a resurgence in COVID cases due to the Delta variant. That suggests we're learning to deal with the rise in cases through new protocols that allow businesses to stay open and consumers to continue spending. Unemployment is dropping as companies hire back workers to meet demand. An increase in both business and leisure travel is putting a strain on recovering airlines. Consumer debt is growing again.
The One Trillion Dollar Infrastructure Bill is making good progress in Congress with just a few issues remaining before it goes to a vote, possibly this weekend or early next week. The passage of the bill will boost several sectors, including renewable energy, communications, materials, and industrials.
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The Bearish Side
The sudden rise in Treasury yields on Thursday and Friday steepened the yield curve once again. The curve was steadily flattening since hitting its sharpest level in March. While some increase in Treasury Yields is maybe ok, a rapid increase like we saw earlier this year, as Biden took over, would bring back yield curve fears that drove corrections for the Nasdaq in February and April.
The rising yields come as the government is beginning a long fight over the government debt ceiling. If the ceiling is met, the government will need to partially or wholly shut down and not issue new treasuries. The result will be volatility in the Treasuries market that will extend to equities that are so stretched at all-time highs that the impact could be a significant correction.
Expect lots of caution among investors as the drama plays out in Washington.
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Key Nasdaq Levels to Watch
The Nasdaq set another all-time high this week but dipped below the 21d EMA in the process. There is a rising wedge pattern that will meet up with expected resistance at 15,000. Watch for a breakout from the wedge in either direction.
On the positive side, the levels are:
The high of this past week was a new all-time high at 14,896.47.
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 14,766.86.
The 21d EMA is at 14,673.64.
14,584.09 is the low of the past week.
14,500 support area was tested this past week and held.
The 50d MA is at 14,379.94.
14,200 remains a critical level that would signal a bearish double top.
14,000 has been an area of support/resistance.
There is a pivot at 13,903.73, which would be a technical support area if a correction is in order.
A further pullback would likely hit the 200d moving average at 13,361.02. The index hasn't approached this line since rising above it in April 2020.
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Wrap-up
We continue to see these mini-cycles play out where the market rotates through cyclicals, growth, and defensive sectors while it tries to navigate an unchartered recovery from the worst global economic disaster in history.
To get an idea of investments moving around, you can look at the sector rotations. I'll also leave with two charts.
The first compares Growth to Value performance. It's easy to see the cycles play out here in January, May, and this Summer. As treasury yields move higher, we may see another move toward value investments.
The second chart is Small-cap vs. Large-cap stocks. Here, you can see the considerable outperformance of small-caps in the last part of 2020, which played out until Treasury Yields started coming back down in March. With the possibility of more volatility in Treasuries, we may see another base in this chart, if not a turn back to the outperformance of small caps.
There are no predictions here. Just observations, watching and learning.
Good luck, stay healthy, and trade safe!
Daily Market Update for 8/6Summary: The S&P 500 and Dow Jones closed at new record highs while the Nasdaq pulled back in a rotation from growth to cyclical sectors. Positive employment data in the morning added to the possibility of agreement on a $1 trillion infrastructure bill that pushed investors towards the cyclical sectors.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Friday, August 6, 2021
Facts: -0.4%, Volume higher, Closing range: 46%, Body: 28%
Good: Higher low, support after morning rotation dip
Bad: Higher volume pullback from all time high
Highs/Lows: Lower high, higher low
Candle: Inside day with small red body in upper half of candle
Advanced/Decline: 0.84, more declining stocks than advancing stocks
Indexes: SPX (+0.17%), DJI (+0.41%), RUT (+0.53%), VIX (-6.54%)
Sectors: Financials (XLF +2.02%) and Materials (XLE +1.45%) at the top. Real Estate (XLRE -0.17%) and Consumer Discretionary (XLY -0.68%) at the bottom.
Expectation: Sideways or Higher
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Market Overview
The S&P 500 and Dow Jones closed at new record highs while the Nasdaq pulled back in a rotation from growth to cyclical sectors. Positive employment data in the morning added to the possibility of agreement on a $1 trillion infrastructure bill that pushed investors towards the cyclical sectors.
The Nasdaq declined -0.4% for the day on higher volume than the previous day. The 28% red body is high in the candle, with a longer lower wick than the upper wick, creating a 46% closing range. The lower high and higher low make an inside day. There were more declining stocks than advancing stocks on the Nasdaq, but more broadly, gaining stocks outnumbered losing stocks in the NYSE.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) set new record closes with +0.17% and +0.41% gains. Small caps in the Russell 2000 (RUT) outperformed again, adding +0.53% to the index.
The VIX volatility index declined -6.54%.
Only the four cyclical sectors gained today, with Financials (XLF +2.02%) and Materials (XLE +1.45%) at the top of the list. Real Estate (XLRE -0.17%) and Consumer Discretionary (XLY -0.68%) were at the bottom.
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Economic Indicators
Employment data was positive today, with Hourly Earnings, Nonfarm Payrolls, and the Unemployment rate coming in better than expected. Consumer Credit was also higher than expected for June, signaling consumer confidence and spending by the public.
The US Dollar (DXY) advanced to +0.57% on the solid economic data.
The US 30y, 10y, and 2y Treasury yields advanced for the day while the gap between long-term and short-term yields widened.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) declined.
Copper (COPPER1!) advanced, and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) advanced +4.80%. Ethereum (ETHUSD) advanced +2.21%.
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Investor Sentiment
The put/call ratio rose to 0.714. 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 is in the middle of the Fear range.
The NAAIM money manager exposure index rose to 97.72.
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Market Leaders
All four largest mega-caps declined today. Microsoft (MSFT) declined -0.02% but shows a bullish inside day candle. Alphabet (GOOGL) lost -0.38%. Apple (AAPL) fell -0.63%. Amazon (AMZN) lost -0.92% and is the only of the four to be trading below the 21d exponential and 50d simply moving average lines.
Financial companies dominated the top of the mega-cap list, with Wells Fargo (WFC), Bank of America (BAC), JP Morgan (JPM), and Berkshire Hathaway (BRK.A) leading the day with gains. At the bottom of the list are ASML Holding (ASML), Alibaba (BABA), Tesla (TSLA), and Novo Nordisk (NVO).
Robinhood (HOOD) ended a volatile first week with an 8% gain to top the daily update growth list today. Fastly (FSLY), Solar Edge (SEDG), and UP Fintech (TIGR) were the other top growth stocks on the list. NIO (NIO), Okta (OKTA), Peloton (PTON), and Zynga (ZNGA) were at the bottom of the list, with Zynga losing almost 20% on a disappointing outlook after beating earnings.
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Looking ahead
Next week will open with the JOLTs Jon Openings data on Monday morning.
BioNTech (BNTX), Trade Desk (TTD), Tyson Foods (TSN), AMC Entertainment (AMC), Chegg (CHGG), Cable One (CABO), Curaleaf (CURLF), Tilray (TLRY), Xpel (XPEL), Rocket Pharma (RCKT), and Vuzix (VUZI) are some of the companies opening up another busy earnings week with reports on Monday.
There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq set a new record today and closed near the high.
The five-day trend line and the trend-line from the 7/19 low point to a +0.52% gain for Monday.
The one-day trend line leads to a -0.24% loss.
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Wrap-up
This morning's positive employment data seems to have kicked off another mini-cycle, with the cyclical sectors gaining while growth stocks either paused or pulled back. The rotation could get a further catalyst if the infrastructure bill moves forward over the weekend.
The inside day for the Nasdaq is within an uptrend and could result in a continuation of the trend. Expectation for Monday is sideways or higher.
Stay healthy and trade safe!
Daily Market Update for 8/5Summary: The indexes set records again today after the morning jobless report came in better than expected. The anticipation of more positive news in Friday's employment data sent Treasury Yields and US equities higher.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Thursday, August 5, 2021
Facts: +0.78%, Volume lower, Closing range: 99%, Body: 84%
Good: Large green body, high closing range with good A/D ratio
Bad: Lower volume
Highs/Lows: Higher high, higher low
Candle: Large green body over a small lower wick, no upper wick
Advanced/Decline: 1.73, more than three advancing stocks for every declining stock
Indexes: SPX (+0.60%), DJI (+0.78%), RUT (+1.81%), VIX (-3.84%)
Sectors: Financials (XLF +1.31%) and Energy (XLE +1.13%) at the top. Materials (XLB -0.14%) and Health (XLV -0.41%) at the bottom.
Expectation: Sideways or Higher
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Market Overview
The indexes set records again today after the morning jobless report came in better than expected. The anticipation of more positive news in Friday's employment data sent Treasury Yields and US equities higher.
The Nasdaq closed at a new record high with a +0.78% gain today. Volume was lower than the previous day. After breaking into a new record level, the index moved sideways for the afternoon before a rally into the close that left the candlestick with an 84% green body and 99% closing range. There were more than three stocks that advanced for every two stocks that declined.
The S&P 500 (SPX) also had a record close with a +0.60% advance. The Dow Jones Industrial Average (DJI) gained +0.78%. Small caps in the Russell 2000 (RUT) outperformed, contributing to a +1.81% gain for the index.
The VIX volatility index declined -3.84%.
Financials (XLF +1.31%) benefited from the rise in Treasury Yields, topping the sector list today. Energy (XLE +1.13%) was the second-best sector as the economic outlook brightened. Materials (XLB -0.14%) and Health (XLV -0.41%) were the only two sectors to lose today.
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Economic Indicators
Continuing Jobless Claims data was much better than expected, while Initial Jobless Claims were slightly higher than the forecast but in line with expectations. The Trade Balance grew higher than expected.
The US Dollar (DXY) declined -0.03%.
The US 30y, 10y, and 2y Treasury yields all advanced for the day.
High Yield Corporate Bond (HYG) prices advanced, and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices advanced.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +3.03%. Ethereum (ETHUSD) advanced +3.26%. (Time of writing)
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Investor Sentiment
The put/call ratio declined to 0.632. 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 and into the middle of the Fear range.
The NAAIM money manager exposure index rose to 97.72.
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Market Leaders
All four largest mega-caps advanced today. Microsoft (MSFT) climbed +1.05% as it nears another new all-time high. Alphabet (GOOGL) increased +0.83%. Apple (AAPL) gained +0.07%. Amazon (AMZN) remains the only of the largest four to trade under moving average lines, and it seems it will take some time to meet up with the averages after last week's gap-down on earnings. Amazon gained +0.63% today.
Novo Nordisk (NVO) led the mega-cap list again today. The relatively new mega-cap gained nearly 12% this week. Also at the top of the mega-cap list are Salesforce.com (CRM), Walt Disney (DIS), and Bank of America (BAC). The list is mostly gainers today. The worst performers were United Health (UNH), Alibaba (BABA), Oracle (ORCL), and Pfizer (PFE).
Datadog (DDOG) had a massive gain of +15.26% on a great earnings report today. Penn National Gaming (PENN) also pleased investors, gaining +9.09%. Square (SQ) continues the momentum from a recent acquisition announcement, gaining +5.78% today. MongoDB (MDB) rounds out the top four in the daily update growth list. The bottom of the list is quite painful. Fastly (FSLY) and Lemonade (LMND) declined more than 10%, and Fiverr (FVRR) declined 24% on disappointing guidance during earnings calls. Robinhood (HOOD) was at the bottom of the list with a -27.59% reversal from yesterday's huge gain.
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Looking ahead
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).
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq set a new record today and closed near the high.
The one-day trend line leads to a +0.36% gain for tomorrow..
The five-day trend line and trend-line from the 7/19 low point to a flat day of no gain or loss.
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Wrap-up
After the jobless report came in better than expected, investors turned back to small-cap growth and value stocks today. If employment data on Friday continues to show a better outlook for the economic recovery, expect additional gains in these stocks that tend to respond to the data.
Based on the candle, there is an expectation for higher tomorrow. However, the index has moved sideways or lower on most new record closes. So I'll set my expectation for Sideways or Higher.
Stay healthy and trade safe!
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.
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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
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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.
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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)
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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.
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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.
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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.
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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.
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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!
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.
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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
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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.
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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.
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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.
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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%.
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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.
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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.
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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!
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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.
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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
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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.
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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)
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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%.
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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.
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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.
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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.
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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.
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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).
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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.
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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?
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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.
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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.
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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
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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.
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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%.
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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.
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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.
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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.
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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.
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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.
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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
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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%).
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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)
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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.
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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.
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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.
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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.
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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.
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Thank you very much!
