Summary: 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!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, 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
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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!
