Summary: The market gave a big yes to the jobs data but focused investors on mega-caps and leaving small-caps behind. Volume was low, and trading was concentrated into big tech, sending the Technology sector higher. Three of the major indexes had record closes.
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 2, 2021
Facts: +0.81%, Volume lower, Closing range: 92% (w/gap), Body: 60%
Good: High closing range, large green body, higher high, higher low
Bad: Lower volume, low A/D ratio
Highs/Lows: Higher high, higher low
Candle: Gap up with higher high and higher low
Advanced/Decline: 0.39, five declining stocks for every two advancing stocks
Indexes: SPX (+0.75%), DJI (+0.44%), RUT (-1.01%), VIX (-2.52%)
Sectors: Technology (XLK +1.32) and Health (XLV +0.96) at the top. Financials (XLF -0.11%) and Energy (XLE -0.22%) were at the bottom.
Expectation: Sideways or Higher
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Market Overview
The market gave a big yes to the jobs data but focused investors on mega-caps and leaving small-caps behind. Volume was low, and trading was concentrated into big tech, sending the Technology sector higher. Three of the major indexes had record closes.
The Nasdaq closed at another all-time high with a +0.81% advance. The day was dominated by buyers, producing a 60% green body and 92% closing range with the gap at open. However, volume was lower than the previous day, and there were five declining stocks for every two advancing stocks.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) also had record-high closes, advancing +0.75% and +0.44%, respectively. Small-caps and the Russell 2000 (RUT) did not do so well, with the index declining -1.01% for the day.
The VIX volatility index declined -2.52%.
Technology (XLK +1.32) and Health (XLV +0.96) were the top sectors for the day. Financials (XLF -0.11%) and Energy (XLE -0.22%) were the only two declining sectors.
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Economic Indicators
The US Dollar (DXY) declined -0.31% for the day.
The US 30y, 10y, and 2y Treasury yields all declined today.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) rose +0.74%. Ethereum (ETHUSD) advanced +2.24%.
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Investor Sentiment
The put/call ratio rose to 0.617. 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 on the fear side, close to neutral.
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Market Leaders
The four largest mega-caps all had considerable gains. Alphabet (GOOGL) gained +2.30%. Amazon (AMZN) rose +2.27%. Microsoft (MSFT) advanced +2.23%. Apple (AAPL) gained +1.96%.
It was a day for big tech, while most mega-caps gained for the day. Only Oracle (ORCL) topped the four largest mega-caps in daily gains, advancing +2.87%. Alibaba (BABA), Bank of America (BAC), JP Morgan (JPM), and Berkshire Hathaway (NRK) were at the bottom of the mega-cap list.
The daily update growth stock list was a mix of gainers and losers. Top gainers included Paycom (PAYC), Upwork (UPWK), DataDog (DDOG), and Enphase(ENPH). Digital Turbine (APPS), Lemonade (LMND), Fastly (FSLY), and UP Fintech (TIGR) were at the bottom.
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Looking ahead
Markets are closed on Monday for the July 4th holiday.
Tuesday will open the trading week with Purchasing Managers Index data for Services and Non-Manufacturing Employment.
There are no relevant earnings reports for the daily update next week. A quiet period before the Financial sector kicks off earnings season the following week.
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Trends, Support, and Resistance
The Nasdaq continued to push the ATH line higher, closing Friday near the mark.
The one-day trend line points to a +0.42% gain for Tuesday.
The five-day trend-line and trend-line from the 5/12 low leads to a -0.24% decline.
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Wrap-up
The jobs data put investors focus on the big mega-caps for Friday, advancing the largest cap stocks while rotating out of the smaller cap stocks. Lop-sided rotations are typically reversed in the following days, either by the rest of the market catching up or by the market pulling back some before advancing again.
Based on the chart, the expectation is for higher or sideways on Tuesday. However, the index may want to come back down to the 14,500 area, filling today's opening gap and building more support before moving up.
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=-
Friday, July 2, 2021
Facts: +0.81%, Volume lower, Closing range: 92% (w/gap), Body: 60%
Good: High closing range, large green body, higher high, higher low
Bad: Lower volume, low A/D ratio
Highs/Lows: Higher high, higher low
Candle: Gap up with higher high and higher low
Advanced/Decline: 0.39, five declining stocks for every two advancing stocks
Indexes: SPX (+0.75%), DJI (+0.44%), RUT (-1.01%), VIX (-2.52%)
Sectors: Technology (XLK +1.32) and Health (XLV +0.96) at the top. Financials (XLF -0.11%) and Energy (XLE -0.22%) were at the bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The market gave a big yes to the jobs data but focused investors on mega-caps and leaving small-caps behind. Volume was low, and trading was concentrated into big tech, sending the Technology sector higher. Three of the major indexes had record closes.
The Nasdaq closed at another all-time high with a +0.81% advance. The day was dominated by buyers, producing a 60% green body and 92% closing range with the gap at open. However, volume was lower than the previous day, and there were five declining stocks for every two advancing stocks.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) also had record-high closes, advancing +0.75% and +0.44%, respectively. Small-caps and the Russell 2000 (RUT) did not do so well, with the index declining -1.01% for the day.
The VIX volatility index declined -2.52%.
Technology (XLK +1.32) and Health (XLV +0.96) were the top sectors for the day. Financials (XLF -0.11%) and Energy (XLE -0.22%) were the only two declining sectors.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.31% for the day.
The US 30y, 10y, and 2y Treasury yields all declined today.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) rose +0.74%. Ethereum (ETHUSD) advanced +2.24%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.617. 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 on the fear side, close to neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The four largest mega-caps all had considerable gains. Alphabet (GOOGL) gained +2.30%. Amazon (AMZN) rose +2.27%. Microsoft (MSFT) advanced +2.23%. Apple (AAPL) gained +1.96%.
It was a day for big tech, while most mega-caps gained for the day. Only Oracle (ORCL) topped the four largest mega-caps in daily gains, advancing +2.87%. Alibaba (BABA), Bank of America (BAC), JP Morgan (JPM), and Berkshire Hathaway (NRK) were at the bottom of the mega-cap list.
The daily update growth stock list was a mix of gainers and losers. Top gainers included Paycom (PAYC), Upwork (UPWK), DataDog (DDOG), and Enphase(ENPH). Digital Turbine (APPS), Lemonade (LMND), Fastly (FSLY), and UP Fintech (TIGR) were at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Markets are closed on Monday for the July 4th holiday.
Tuesday will open the trading week with Purchasing Managers Index data for Services and Non-Manufacturing Employment.
There are no relevant earnings reports for the daily update next week. A quiet period before the Financial sector kicks off earnings season the following week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq continued to push the ATH line higher, closing Friday near the mark.
The one-day trend line points to a +0.42% gain for Tuesday.
The five-day trend-line and trend-line from the 5/12 low leads to a -0.24% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The jobs data put investors focus on the big mega-caps for Friday, advancing the largest cap stocks while rotating out of the smaller cap stocks. Lop-sided rotations are typically reversed in the following days, either by the rest of the market catching up or by the market pulling back some before advancing again.
Based on the chart, the expectation is for higher or sideways on Tuesday. However, the index may want to come back down to the 14,500 area, filling today's opening gap and building more support before moving up.
Stay healthy and trade safe!
