Summary: The market shrugged off worries about the Fed tapering of economic support to rally higher today. While the indexes were still below recent highs, the day was an excellent structural day, with gains shared broadly across the market.
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, August 20, 2021
Facts: +1.19%, Volume lower, Closing Range: 95%, Body: 95% Green
Good: All green body, high advance/decline ratio
Bad: Lower volume
Highs/Lows: Higher high, Higher low
Candle: Mostly green body with a tiny upper wick, low above yesterday's close
Advance/Decline: 1.68, three advancing stocks for every two declining stocks
Indexes: SPX (+0.81%), DJIA (+0.65%), RUT (+1.65%), VIX (-14.35%)
Sector List: Technology (XLK +1.29%) and Utilities (XLU +1.25%) at the top. Energy (XLE +0.22%) and Consumer Staples (XLP +0.17%) at the bottom.
Expectation: Higher
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Market Overview
The market shrugged off worries about the Fed tapering of economic support to rally higher today. While the indexes were still below recent highs, the day was an excellent structural day, with gains shared broadly across the market.
The Nasdaq closed +1.19% higher. Volume was lower than the previous day. The candle is almost entirely green body, with a short upper wick. The closing range of 95% and 95% body creates the second candle in a row with no lower wick. The index closed back above its 21d EMA as three stocks advanced for every two that declined.
The Russell 2000 (RUT) led the indexes with a +1.65% gain. The S&P 500 (SPX) gained +0.81%, while the Dow Jones Industrial Average (DJIA) gained +0.65%.
The VIX volatility index fell -14.35%.
All sectors gained today. Technology (XLK +1.29%) and Utilities (XLU +1.25%) topped the sector list, giving us another day of mixed growth and defensive sectors at the top of the sector list. Energy (XLE +0.22%) had a slight gain to end a week of huge losses. Consumer Staples (XLP +0.17%) was at the bottom of the sector list.
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Economic Indicators
The Fed's Kaplan, who has been a proponent of an early reduction in economic support, stated this morning that he might need to change his view based on the growing concerns around the Delta variant.
The US Dollar (DXY) declined -0.11%.
The US 30y Treasury Yield declined while the 10y and 2y Treasury Yields advanced.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) declined while and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +5.11%. Ethereum (ETHUSD) advanced +2.58%. (Time of writing)
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Market Leaders
Microsoft (MSFT) topped the largest four mega-caps with a gap up and huge +2.56% gain today that took the stock past 300 for the first time. Apple (AAPL) gained +1.02%. Alphabet (GOOGL) rose +1.29%. Both are riding support from their 21d EMA. Amazon (AMZN) advanced +0.38% but remained below its 200d MA as the 50d MA starts to turn over to a decline.
Nvidia (NVDA) topped the mega-cap list with a 5.14% gain. The company was followed by Microsoft, Home Depot (HD), and Cisco (CSCO) to round out the top four. At the bottom of the list were Toyota Motor, Taiwan Semiconductor (TSM), Alibaba (BABA), and Intel (INTC).
Growth stocks were back in action today. Top performers in the daily update growth list included Ehang Holding (EH), Nvidia, FUTU Holding (FUTU), and Fastly (FSLY), all gaining more than 4%. There were a handful of losers, with Chewy (CHWY), Sea Limited (SE), Snowflake (SNOW), and Robinhood (HOOD) all declining more than 3%.
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Investor Sentiment
The put/call ratio dropped to 0.740. 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 remained in extreme fear.
The NAAIM money manager exposure index dropped to 70.57 this week.
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Looking ahead
Manufacturing and Services Purchasing Managers Index data will be available on Monday, just after the market opens. Existing Home Sales data will also be available.
JD.com (JD) releases earnings on Monday.
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Trends, Support, and Resistance
The Nasdaq closed back above the 21d EMA today.
The one-day trend line points to a +0.46% gain for Monday.
The five-day trend line ends with a -0.97% decline.
The trend line from the 8/5 high points to a -0.97% decline.
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Wrap-up
It was a solid green day with broad gains shared across the market and small-caps leading the way higher. That all feels bullish. The only thing missing from today was higher volume. As Microsoft (MSFT) made new all-time highs, helping the Technology sector lead for the day, investors also became cautious, turning to the Utilities (XLU) sector for defense.
Based on the low that's above yesterday's close, the expectation is for Higher on Monday.
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.
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Friday, August 20, 2021
Facts: +1.19%, Volume lower, Closing Range: 95%, Body: 95% Green
Good: All green body, high advance/decline ratio
Bad: Lower volume
Highs/Lows: Higher high, Higher low
Candle: Mostly green body with a tiny upper wick, low above yesterday's close
Advance/Decline: 1.68, three advancing stocks for every two declining stocks
Indexes: SPX (+0.81%), DJIA (+0.65%), RUT (+1.65%), VIX (-14.35%)
Sector List: Technology (XLK +1.29%) and Utilities (XLU +1.25%) at the top. Energy (XLE +0.22%) and Consumer Staples (XLP +0.17%) at the bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The market shrugged off worries about the Fed tapering of economic support to rally higher today. While the indexes were still below recent highs, the day was an excellent structural day, with gains shared broadly across the market.
The Nasdaq closed +1.19% higher. Volume was lower than the previous day. The candle is almost entirely green body, with a short upper wick. The closing range of 95% and 95% body creates the second candle in a row with no lower wick. The index closed back above its 21d EMA as three stocks advanced for every two that declined.
The Russell 2000 (RUT) led the indexes with a +1.65% gain. The S&P 500 (SPX) gained +0.81%, while the Dow Jones Industrial Average (DJIA) gained +0.65%.
The VIX volatility index fell -14.35%.
All sectors gained today. Technology (XLK +1.29%) and Utilities (XLU +1.25%) topped the sector list, giving us another day of mixed growth and defensive sectors at the top of the sector list. Energy (XLE +0.22%) had a slight gain to end a week of huge losses. Consumer Staples (XLP +0.17%) was at the bottom of the sector list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The Fed's Kaplan, who has been a proponent of an early reduction in economic support, stated this morning that he might need to change his view based on the growing concerns around the Delta variant.
The US Dollar (DXY) declined -0.11%.
The US 30y Treasury Yield declined while the 10y and 2y Treasury Yields advanced.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) declined while and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) advanced +5.11%. Ethereum (ETHUSD) advanced +2.58%. (Time of writing)
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Market Leaders
Microsoft (MSFT) topped the largest four mega-caps with a gap up and huge +2.56% gain today that took the stock past 300 for the first time. Apple (AAPL) gained +1.02%. Alphabet (GOOGL) rose +1.29%. Both are riding support from their 21d EMA. Amazon (AMZN) advanced +0.38% but remained below its 200d MA as the 50d MA starts to turn over to a decline.
Nvidia (NVDA) topped the mega-cap list with a 5.14% gain. The company was followed by Microsoft, Home Depot (HD), and Cisco (CSCO) to round out the top four. At the bottom of the list were Toyota Motor, Taiwan Semiconductor (TSM), Alibaba (BABA), and Intel (INTC).
Growth stocks were back in action today. Top performers in the daily update growth list included Ehang Holding (EH), Nvidia, FUTU Holding (FUTU), and Fastly (FSLY), all gaining more than 4%. There were a handful of losers, with Chewy (CHWY), Sea Limited (SE), Snowflake (SNOW), and Robinhood (HOOD) all declining more than 3%.
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Investor Sentiment
The put/call ratio dropped to 0.740. 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 remained in extreme fear.
The NAAIM money manager exposure index dropped to 70.57 this week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Manufacturing and Services Purchasing Managers Index data will be available on Monday, just after the market opens. Existing Home Sales data will also be available.
JD.com (JD) releases earnings on Monday.
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Trends, Support, and Resistance
The Nasdaq closed back above the 21d EMA today.
The one-day trend line points to a +0.46% gain for Monday.
The five-day trend line ends with a -0.97% decline.
The trend line from the 8/5 high points to a -0.97% decline.
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Wrap-up
It was a solid green day with broad gains shared across the market and small-caps leading the way higher. That all feels bullish. The only thing missing from today was higher volume. As Microsoft (MSFT) made new all-time highs, helping the Technology sector lead for the day, investors also became cautious, turning to the Utilities (XLU) sector for defense.
Based on the low that's above yesterday's close, the expectation is for Higher on Monday.
Stay healthy and trade safe!
