Summary: Monday started with a dip, just like the past several Mondays. This week's difference is that the bulls entered in the afternoon, bringing the major indices back to near their open. Small Caps performed best on the day as inflation still weighed on big tech and mid-cap growth.
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, May 17, 2021
Facts: -0.38%, Volume lower, Closing range: 85%, Body: 8%
Good: Close in upper part of range, bulls took over in afternoon
Bad: Lower high, selling most of day
Highs/Lows: Lower high, higher low
Candle: Tiny thin body over a long lower wick.
Advanced/Decline: More declining stocks than advancing stocks
Indexes: SPX (-0.25%), DJI (-0.16%), RUT (+0.11%), VIX (+4.84%)
Sectors: Energy (XLE +2.32%) and Materials (XLB +0.88%) were top. Communications (XLC -0.79%) and Utilities (XLU -0.82%) were bottom.
Expectation: Sideways or Higher
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Market Overview
Monday started with a dip, just like the past several Mondays. This week's difference is that the bulls entered in the afternoon, bringing the major indices back to near their open. Small Caps performed best on the day as inflation still weighed on big tech and mid-cap growth.
The Nasdaq closed with a -0.38% loss on lower volume. The 85% closing range over an 8% green body is in the upper part of the candle over a long lower wick. The candle indicates the bulls weren't willing to let go, but still, there was indecision in the market. There were more declining stocks than advancing stocks.
The Russell 2000 (RUT) performed the best for the day, closing with a +0.11% gain. The S&P 500 (SPX) declined -0.25%, and the Dow Jones Industrial Average (DJI) lost -0.16%.
The VIX volatility index advanced +4.84%.
The Energy sector (XLE) led for another day, advancing +2.32%. Materials (XLB) was the second-best sector with a +0.88%. 7 of the 11 sectors declined, with Communications (XLC) and Utilities (XLU) at the bottom of the list with -0.79% and -0.82% declines.
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Economic Indicators
The US Dollar (DXY) declined -0.12%.
The US 30y, 10y, and 2y Treasury yields all advanced for the day.
Both High Yield Corporate Bond (HYG) prices and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) declined.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
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Investor Sentiment
The put/call ratio rose to 0.676. 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 still in the fear zone.
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Market Leaders
Amazon (AMZN) and Alphabet (GOOGL) advanced while Apple (AAPL) and Microsoft (MSFT) declined. Amazon rose +1.47% and closed above its 50d MA. Alphabet gained +0.46% and closed above its 21 EMA. Apple and Microsoft both closed below their 50d MA, with -0.93% and -1.20% declines.
The top mega-caps for the day were Exxon Mobil (XOM), Merck & Co (MRK), Toyota Motor (TM ), and Amazon. The majority of mega-caps were down, with Comcast (CMCSA), AT&T (T), Taiwan Semiconductor (TSM), and Tesla (TSLA) at the bottom of the list.
There were growth stocks that did well while others did not, perhaps depending on their sector. Lemonade (LMND), Chewy (CHWY), FUTU Holdings (FUTU), and Palantir (PLTR) were the top four. At the bottom of the list were Peloton (PTON), DraftKings (DKNG), RH (RH), and Square (SQ).
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Looking ahead
Building Permits and Housing Starts data will release on Tuesday. API Weekly Crude Oil Stock data will update after market close.
Earnings releases will include Walmart (WMT), Home Depot (HD), Sea (SE), Baidu (BIDU), Trip.com (TCOM), and Macy's (M).
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Trends, Support, and Resistance
The index remained in about the same spot, below the 21d EMA and 50d MA lines and above the 13,000 support area.
The five-day trend-line points to a -0.24% decline for tomorrow. The one-day trend line is just below that, showing a -0.62% declined.
The trend-line from the 4/2 high shows a -2.55% decline on Tuesday.
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Wrap-up
Tax day was mostly uneventful. The indexes dropped buy then caught support, and the bulls bought back stocks at a discount into the late afternoon. The indecisive inside day means we'll have to wait until tomorrow for confirmation on a direction. The expectation is for sideways or higher, but the market could decide to go lower before it goes 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=-
Monday, May 17, 2021
Facts: -0.38%, Volume lower, Closing range: 85%, Body: 8%
Good: Close in upper part of range, bulls took over in afternoon
Bad: Lower high, selling most of day
Highs/Lows: Lower high, higher low
Candle: Tiny thin body over a long lower wick.
Advanced/Decline: More declining stocks than advancing stocks
Indexes: SPX (-0.25%), DJI (-0.16%), RUT (+0.11%), VIX (+4.84%)
Sectors: Energy (XLE +2.32%) and Materials (XLB +0.88%) were top. Communications (XLC -0.79%) and Utilities (XLU -0.82%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Monday started with a dip, just like the past several Mondays. This week's difference is that the bulls entered in the afternoon, bringing the major indices back to near their open. Small Caps performed best on the day as inflation still weighed on big tech and mid-cap growth.
The Nasdaq closed with a -0.38% loss on lower volume. The 85% closing range over an 8% green body is in the upper part of the candle over a long lower wick. The candle indicates the bulls weren't willing to let go, but still, there was indecision in the market. There were more declining stocks than advancing stocks.
The Russell 2000 (RUT) performed the best for the day, closing with a +0.11% gain. The S&P 500 (SPX) declined -0.25%, and the Dow Jones Industrial Average (DJI) lost -0.16%.
The VIX volatility index advanced +4.84%.
The Energy sector (XLE) led for another day, advancing +2.32%. Materials (XLB) was the second-best sector with a +0.88%. 7 of the 11 sectors declined, with Communications (XLC) and Utilities (XLU) at the bottom of the list with -0.79% and -0.82% declines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.12%.
The US 30y, 10y, and 2y Treasury yields all advanced for the day.
Both High Yield Corporate Bond (HYG) prices and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) declined.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.676. 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 still in the fear zone.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN) and Alphabet (GOOGL) advanced while Apple (AAPL) and Microsoft (MSFT) declined. Amazon rose +1.47% and closed above its 50d MA. Alphabet gained +0.46% and closed above its 21 EMA. Apple and Microsoft both closed below their 50d MA, with -0.93% and -1.20% declines.
The top mega-caps for the day were Exxon Mobil (XOM), Merck & Co (MRK), Toyota Motor (TM ), and Amazon. The majority of mega-caps were down, with Comcast (CMCSA), AT&T (T), Taiwan Semiconductor (TSM), and Tesla (TSLA) at the bottom of the list.
There were growth stocks that did well while others did not, perhaps depending on their sector. Lemonade (LMND), Chewy (CHWY), FUTU Holdings (FUTU), and Palantir (PLTR) were the top four. At the bottom of the list were Peloton (PTON), DraftKings (DKNG), RH (RH), and Square (SQ).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Building Permits and Housing Starts data will release on Tuesday. API Weekly Crude Oil Stock data will update after market close.
Earnings releases will include Walmart (WMT), Home Depot (HD), Sea (SE), Baidu (BIDU), Trip.com (TCOM), and Macy's (M).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index remained in about the same spot, below the 21d EMA and 50d MA lines and above the 13,000 support area.
The five-day trend-line points to a -0.24% decline for tomorrow. The one-day trend line is just below that, showing a -0.62% declined.
The trend-line from the 4/2 high shows a -2.55% decline on Tuesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Tax day was mostly uneventful. The indexes dropped buy then caught support, and the bulls bought back stocks at a discount into the late afternoon. The indecisive inside day means we'll have to wait until tomorrow for confirmation on a direction. The expectation is for sideways or higher, but the market could decide to go lower before it goes higher.
Stay healthy and trade safe!
