Summary: Another sideways move for the indexes while investors remained on the sidelines waiting for the economic data coming over the next two days. To pass the boredom, investors watched, or maybe even gambled with meme stocks that had another day of huge swings.
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, June 2, 2021
Facts: +0.14%, Volume higher, Closing range: 77%, Body: 15%
Good: Gain on higher volume, high closing range, support at 13,700
Bad: Lower high, thin green body
Highs/Lows: Higher high, lower low
Candle: Outside day, thick red body with a tiny upper wick and longer lower wick.
Advanced/Decline: 0.91, more decling stocks than advancing stocks.
Indexes: SPX (+0.14%), DJI (+0.07%), RUT (+0.13%), VIX (-2.24%)
Sectors: Energy (XLE +1.86%) and Real Estate (XLRE +1.39%) were top. Consumer Discretionary (XLY -0.46%) and Materials (XLB -0.84%) were bottom.
Expectation: Sideways or Higher
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Market Overview
Another sideways move for the indexes while investors remained on the sidelines waiting for the economic data coming over the next two days. To pass the boredom, investors watched, or maybe even gambled with meme stocks that had another day of huge swings.
The Nasdaq closed with a small +0.14% gain after dipping in the afternoon and finding support again at 13,700. Volume was higher, and the closing range of 77% is good with a thin green 15% body. The short upper wick was formed from gains in the morning, while the longer lower wick formed in selling at the start of the afternoon. There were more declining stocks than advancing stocks.
The Russell 2000 (RUT) was the only major index to get a higher high today but gained only +0.13% after a strong session the previous day. The S&P 500 (SPX) gained +0.14%, and the Dow Jones Industrial Average (DJI) gained +0.07%.
The VIX volatility index declined -2.24%.
Energy (XLE +1.86%) and Real Estate (XLRE +1.39%) continued their lead as the top sectors this week. Consumer Discretionary (XLY -0.46%) and Materials (XLB -0.84%) were the worst-performing today. It's worth noting that Utilities (XLU +0.53%) and Consumer Staples (XLP +0.37%) also performed well today. Technology (XLK +0.69%) started the day as the top sector but faded to third place by afternoon.
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Economic Indicators
The US Dollar (DXY) declined -0.02%.
The US 30y, 10y, and 2y Treasury yields all declined.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) advanced.
Timber (WOOD) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) advanced +2.44%. Ethereum (ETHUSD) advanced +2.78%.
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Investor Sentiment
The put/call ratio rose to 0.534. 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 moving toward neutral, but still just on the fear side.
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Market Leaders
Apple (APPL) and Amazon (AMZN) climbed +0.63% and +0.48% today but are still below their 21d EMA and 50d MA lines. Microsoft (MSFT) declined just -0.04% after hitting resistance at the 21d EMA. Alphabet (GOOGL) fell -0.44% but is still trading within a base forming above its 21d EMA and 50d MA.
There were more gainers than losers in the mega-cap list. Nvidia (NVDA), Toyota Motor (TM ), Mastercard (MC), and Chevron (CVX) were the top mega-caps for the day. Tesla (TSLA), Walt Disney (DIS), Home Depot (HD), and Salesforce.com (CRM) were the worst-performing mega-caps.
The daily update growth list is a bit more, even with gainers and losers. At the top of the list is Beyond Meat (BYND), gaining over 10% for the day. Lemonade (LMND), Etsy (ETSY), and Palantir (PLTR) were also in the top four. At the bottom of the list were NIO (NIO), FUTU Holding (FUTU), Digital Turbine (APPS), and UP Fintech (TIGR).
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Looking ahead
More employment data is coming on Thursday with Nonfarm Employment Change, Initial Jobless Claims, Productivity, and Labor Costs. Services PMI is a leading indicator of demand for services such as hotels, restaurants, and others. Crude Oil Inventories will be available late in the morning. Fed members are scheduled to speak in the afternoon.
Thursday's earnings reports include Broadcom (AVGO), Crowdstrike (CRWD), Lululemon (LULU), DocuSign (DOCU), Slack (WORK), MongoDB (MDB), Five Below (FIVE), Pagerduty (PD), and Sumo Logic (SUMO).
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Trends, Support, and Resistance
The index continues to hold above the 13,600 - 13,700 area after testing the area in the afternoon dip.
The trend-line from the low on 5/13 points to a +1.12% gain on Thursday.
Following the five-day trend-line would result in a -0.04% lateral move.
The one-day trend line points to a -0.59% decline.
Following the trend-line from the 4/2 high would result in a -1.55% decline for tomorrow.
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Wrap-up
It's been almost two weeks of sideways move for the Nasdaq after it popped above the 21-day Exponential Moving Average and the 50-day Simple Moving Average, two lines that I like to track on index and stock charts along with the 200-day Simple Moving Average. The slow move can be a good thing as we build a base, making the support area from 13,600-13,700 stronger and allowing the moving average lines to catch up.
If the 21d EMA can move above the 50d MA, that will be a good confirmation of the uptrend and potentially the start of a move higher. In the meantime, if you want excitement, keep your eyes on the meme stocks that are going crazy again. To the moon. Ugh.
Stay healthy and trade safe!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, June 2, 2021
Facts: +0.14%, Volume higher, Closing range: 77%, Body: 15%
Good: Gain on higher volume, high closing range, support at 13,700
Bad: Lower high, thin green body
Highs/Lows: Higher high, lower low
Candle: Outside day, thick red body with a tiny upper wick and longer lower wick.
Advanced/Decline: 0.91, more decling stocks than advancing stocks.
Indexes: SPX (+0.14%), DJI (+0.07%), RUT (+0.13%), VIX (-2.24%)
Sectors: Energy (XLE +1.86%) and Real Estate (XLRE +1.39%) were top. Consumer Discretionary (XLY -0.46%) and Materials (XLB -0.84%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Another sideways move for the indexes while investors remained on the sidelines waiting for the economic data coming over the next two days. To pass the boredom, investors watched, or maybe even gambled with meme stocks that had another day of huge swings.
The Nasdaq closed with a small +0.14% gain after dipping in the afternoon and finding support again at 13,700. Volume was higher, and the closing range of 77% is good with a thin green 15% body. The short upper wick was formed from gains in the morning, while the longer lower wick formed in selling at the start of the afternoon. There were more declining stocks than advancing stocks.
The Russell 2000 (RUT) was the only major index to get a higher high today but gained only +0.13% after a strong session the previous day. The S&P 500 (SPX) gained +0.14%, and the Dow Jones Industrial Average (DJI) gained +0.07%.
The VIX volatility index declined -2.24%.
Energy (XLE +1.86%) and Real Estate (XLRE +1.39%) continued their lead as the top sectors this week. Consumer Discretionary (XLY -0.46%) and Materials (XLB -0.84%) were the worst-performing today. It's worth noting that Utilities (XLU +0.53%) and Consumer Staples (XLP +0.37%) also performed well today. Technology (XLK +0.69%) started the day as the top sector but faded to third place by afternoon.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.02%.
The US 30y, 10y, and 2y Treasury yields all declined.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) advanced.
Timber (WOOD) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) advanced +2.44%. Ethereum (ETHUSD) advanced +2.78%.
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Investor Sentiment
The put/call ratio rose to 0.534. 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 moving toward neutral, but still just on the fear side.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (APPL) and Amazon (AMZN) climbed +0.63% and +0.48% today but are still below their 21d EMA and 50d MA lines. Microsoft (MSFT) declined just -0.04% after hitting resistance at the 21d EMA. Alphabet (GOOGL) fell -0.44% but is still trading within a base forming above its 21d EMA and 50d MA.
There were more gainers than losers in the mega-cap list. Nvidia (NVDA), Toyota Motor (TM ), Mastercard (MC), and Chevron (CVX) were the top mega-caps for the day. Tesla (TSLA), Walt Disney (DIS), Home Depot (HD), and Salesforce.com (CRM) were the worst-performing mega-caps.
The daily update growth list is a bit more, even with gainers and losers. At the top of the list is Beyond Meat (BYND), gaining over 10% for the day. Lemonade (LMND), Etsy (ETSY), and Palantir (PLTR) were also in the top four. At the bottom of the list were NIO (NIO), FUTU Holding (FUTU), Digital Turbine (APPS), and UP Fintech (TIGR).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
More employment data is coming on Thursday with Nonfarm Employment Change, Initial Jobless Claims, Productivity, and Labor Costs. Services PMI is a leading indicator of demand for services such as hotels, restaurants, and others. Crude Oil Inventories will be available late in the morning. Fed members are scheduled to speak in the afternoon.
Thursday's earnings reports include Broadcom (AVGO), Crowdstrike (CRWD), Lululemon (LULU), DocuSign (DOCU), Slack (WORK), MongoDB (MDB), Five Below (FIVE), Pagerduty (PD), and Sumo Logic (SUMO).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index continues to hold above the 13,600 - 13,700 area after testing the area in the afternoon dip.
The trend-line from the low on 5/13 points to a +1.12% gain on Thursday.
Following the five-day trend-line would result in a -0.04% lateral move.
The one-day trend line points to a -0.59% decline.
Following the trend-line from the 4/2 high would result in a -1.55% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It's been almost two weeks of sideways move for the Nasdaq after it popped above the 21-day Exponential Moving Average and the 50-day Simple Moving Average, two lines that I like to track on index and stock charts along with the 200-day Simple Moving Average. The slow move can be a good thing as we build a base, making the support area from 13,600-13,700 stronger and allowing the moving average lines to catch up.
If the 21d EMA can move above the 50d MA, that will be a good confirmation of the uptrend and potentially the start of a move higher. In the meantime, if you want excitement, keep your eyes on the meme stocks that are going crazy again. To the moon. Ugh.
Stay healthy and trade safe!
