Trend lines drawn the 10/12 pivot day (16d), 10/27 (5d), and today 11/2 (1d).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, November 2, 2020 R.O.C.K in the U.S.A.
Facts: +0.42% higher, Volume lower, Closing range: 53%, Red Body: 22% Good: Stayed above Friday’s low, late day uptrend Bad: Indecision/continuation candle Highs/Lows: Higher low, lower high Candle: Inside day, with a short body, longer lower wick than upper wick Advance/Decline: 2.05, 2 advancers for every decliner Sectors: Energy (XLE +3.41%), Materials (XLB +3.32%) were top, Communications (XLC -0.05%) was bottom. Expectation: Lower
The first day of November starts off with some more choppy market action as the Nasdaq started in the positive, went negative and then back to positive by the end of the day. It was good that the index came up off afternoon lows, but it could just barely get back to the midpoint of the morning highs. The index ended up +0.42% on lower volume. The candle is an inside day with a thin 22% body and 53% closing range, not providing a clear winner of bulls or bears. There were 2 advancing stocks for every declining stock, which underperformed the broader market which had a 3:1 ratio.
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The S&P 500 (SPX +1.23%), Dow Jones Industrial (DJI +1.60%) and Russell 2000 (RUT +1.96%) had much more positive days. However, they are all still trading within the highs and lows of the final three days of last week. Energy (XLK +3.41%) and Materials (XLB +3.32%) led the mostly positive day for sectors. Energy was lowest at open, but quickly moved to the top. Communications (XLC -0.05%) and Technology (XLK +0.25%) were at the bottom of the list, continuing to cool off from gains in recent months.
The VIX volatility index decreased -2.34% but still closing near the highs of September.
Mega-caps had mixed results. The big four ended the day with losses, except for Google (GOOG +0.31%). Apple (AAPL -0.08%) and Microsoft (MSFT -0.07%) had minor losses while the Amazon (AMZN -1.04%) loss was a little more severe. Only Google is trading above the key 21d EMA and 50d MA lines. Facebook (FB -0.67%) had a wild day, bouncing off the 100d MA which is where it maintained support in September. Beyond the mega-caps, there is still some rotation among growth stocks. Pinterest (PINS -0.97%) is down, Snap (SNAP +3.55%) is up. DataDog (DDOG -2.67%) and ServiceNow (NOW-4.34%) are down while FVRR (+3.38%) and Fastly (FSLY +2.52%) are up.
Solar Edge (SEDG +3.89%) is down 20% after hours on lower-than-expected sales results. PayPal (PYPL +0.88%) is down 6% after hours on a poor fourth quarter outlook, despite beating expectations for third quarter. Jazz Pharmaceuticals (JAZZ +2.19%) is up 10% after hours after beating expectations.
Tomorrow is the big election day. It could be a very choppy back and forth day as early news, true, false or otherwise is broadcast. There are quite a few earnings reports that will be released prior to the market opening including Wayfair (W +3.07%), Johnson Controls (JCI +4.10%), and Fox Corp (FOXA +3.32%). Fewer after market due to the election.
There is not much economic news on the calendar for tomorrow other than the Presidential Election.
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The three trend lines I’m using are all pointing to losses for tomorrow. The better of the two is the trend line from the 10/12 pivot day which points to a -0.35% loss. The five day and one day trend both point to about the same spot at -2.18% loss. That’s just above the July support area and just narrowly below a parallel channel drawn from 10/12. Breaking through this July support area would be dangerous as there is not much trading activity in the second half of the year in between that line and the June support area of 10,000. I have added back the future possibility of reaching the June support area, a -7.55% loss from today’s close. This downward trend seems to be how the market is heading into the election on Tuesday. Following tomorrow, we could finally see a turn for the better.
All ideas are for information purposes only. I may or may not invest in the stocks discussed. Before investing in any stock, do your research and trade using your rules.
All ideas are for information purposes only. I may or may not invest in the stocks discussed. Before investing in any stock, do your research and trade using your rules.
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