Summary: 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!
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=-
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
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
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!
