Trend lines drawn from the 3/5 low (11d), 3/15 (5d) and today 3/19 (1d).
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, March 19, 2021
Facts: +0.76%, Volume higher, Closing range: 83%, Body: 45%
Good: Support at 13,000 to start morning rally
Bad: Rally lost steam in afternoon, lower high, lower low
Highs/Lows: Lower high, lower low
Candle: Thin green body with lower wick slightly longer than upper wick
Advance/Decline: One advancing stock for every declining stock
Indexes: SPX (-0.06%), DJI (-0.71%), RUT (+0.88%), VIX (-2.92%)
Sectors: Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The markets ended another choppy week with one more rotation as investors continue to adjust against what's happening in the bond market. Yesterday's sale of bonds settled down and investors moved back into some growth stocks. But it was not a broad rally, with the Dow Jones Industrial and S&P 500 ending the day with losses.
The Nasdaq gained +0.76% on higher volume, but made a new low compared to the previous day and didn’t manage a new high. The closing range of 83% with a 45% green body is from a bullish intraday that testing the 13,000 area and then rallied into the afternoon. The upper wick formed from a tapering in prices after the morning rally stalled. There were more advancing stocks than declining stocks.
The Russell 2000 (RUT) was the best performing index of the day with a +0.88% gain. That was not nearly enough to recover from yesterday's selling. The S&P 500 (SPX) declined -0.06% while the Dow Jones Industrial average (DJI) lost -0.71%.
The VIX volatility index declined -2.92%.
Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Technology (XLK) lost -0.30% which is a surprise considering the tech heavy Nasdaq had gains. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom.
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Economic Indicators
The US Dollar (DXY) gained +0.06%.
The US 30y treasury bond yield declined while the 10y and 2y treasury bond yields remained about even.
High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both advanced for the day.
Silver (SILVER) and Gold (GOLD) both gained for the day. Crude Oil (CRUDEOIL1!) was about even. Timber (WOOD) declined. Copper (COPPER1!) was about even while Aluminum (ALI1!) advanced.
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Investor Sentiment
The put/call ratio is at 0.696. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The CNN Fear & Greed index is moving back to neutral.
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Market Leaders
Keeping this update brief during vacation.
The majority of mega-caps did well for the day and growth stocks had a much better day than yesterday.
I'll return to more specific updates on market leaders next week.
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Looking ahead
Existing Homes Sales data will be released on Monday just after market open.
Tencent Music Entertainment (TME) will release earnings on Monday.
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Trends, Support and Resistance
The index remains below the 21d EMA and 50d MA, but tested and found support at the 13,000 area.
The trend line from the 3/5 bottom points to a +2.55% gain for tomorrow. The one-day trend line points to a -0.47%.
The five-day trend line points to a +2.20% gain.
The trend line from the 2/16 all-time high was removed last week, but the index has returned to the midpoint of that channel.
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Wrap-up
It was a nice upside reversal from yesterday's selling, but there still seems to be some weakness behind the move. The S&P 500 and Dow Jones Industrial both had declines. The Technology sector also declined, despite the Nasdaq having a gain.
Homework for the weekend should be to look at the stocks in your portfolio and watchlist. Because of the choppiness the last few weeks, you can learn a lot about what other investors, especially institutional investors, believe about your picks.
Look for strength against the indexes and against their sector. Pay close attention to volume on up days and down days. Is there more volume during selling or buying? How are they performing on the weekly chart vs the daily chart? Are they holding above key moving average lines (21d EMA, 50d MA, 200d MA, etc)?
Stay healthy and trade safe!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, March 19, 2021
Facts: +0.76%, Volume higher, Closing range: 83%, Body: 45%
Good: Support at 13,000 to start morning rally
Bad: Rally lost steam in afternoon, lower high, lower low
Highs/Lows: Lower high, lower low
Candle: Thin green body with lower wick slightly longer than upper wick
Advance/Decline: One advancing stock for every declining stock
Indexes: SPX (-0.06%), DJI (-0.71%), RUT (+0.88%), VIX (-2.92%)
Sectors: Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The markets ended another choppy week with one more rotation as investors continue to adjust against what's happening in the bond market. Yesterday's sale of bonds settled down and investors moved back into some growth stocks. But it was not a broad rally, with the Dow Jones Industrial and S&P 500 ending the day with losses.
The Nasdaq gained +0.76% on higher volume, but made a new low compared to the previous day and didn’t manage a new high. The closing range of 83% with a 45% green body is from a bullish intraday that testing the 13,000 area and then rallied into the afternoon. The upper wick formed from a tapering in prices after the morning rally stalled. There were more advancing stocks than declining stocks.
The Russell 2000 (RUT) was the best performing index of the day with a +0.88% gain. That was not nearly enough to recover from yesterday's selling. The S&P 500 (SPX) declined -0.06% while the Dow Jones Industrial average (DJI) lost -0.71%.
The VIX volatility index declined -2.92%.
Communications (XLC +0.87%) and Consumer Discretionary (XLY +0.60%) were top sectors. Technology (XLK) lost -0.30% which is a surprise considering the tech heavy Nasdaq had gains. Financials (XLF -1.16%) and Real Estate (XLRE -1.33%) were bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) gained +0.06%.
The US 30y treasury bond yield declined while the 10y and 2y treasury bond yields remained about even.
High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both advanced for the day.
Silver (SILVER) and Gold (GOLD) both gained for the day. Crude Oil (CRUDEOIL1!) was about even. Timber (WOOD) declined. Copper (COPPER1!) was about even while Aluminum (ALI1!) advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio is at 0.696. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The CNN Fear & Greed index is moving back to neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Keeping this update brief during vacation.
The majority of mega-caps did well for the day and growth stocks had a much better day than yesterday.
I'll return to more specific updates on market leaders next week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Existing Homes Sales data will be released on Monday just after market open.
Tencent Music Entertainment (TME) will release earnings on Monday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index remains below the 21d EMA and 50d MA, but tested and found support at the 13,000 area.
The trend line from the 3/5 bottom points to a +2.55% gain for tomorrow. The one-day trend line points to a -0.47%.
The five-day trend line points to a +2.20% gain.
The trend line from the 2/16 all-time high was removed last week, but the index has returned to the midpoint of that channel.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It was a nice upside reversal from yesterday's selling, but there still seems to be some weakness behind the move. The S&P 500 and Dow Jones Industrial both had declines. The Technology sector also declined, despite the Nasdaq having a gain.
Homework for the weekend should be to look at the stocks in your portfolio and watchlist. Because of the choppiness the last few weeks, you can learn a lot about what other investors, especially institutional investors, believe about your picks.
Look for strength against the indexes and against their sector. Pay close attention to volume on up days and down days. Is there more volume during selling or buying? How are they performing on the weekly chart vs the daily chart? Are they holding above key moving average lines (21d EMA, 50d MA, 200d MA, etc)?
Stay healthy and trade safe!
