Summary: The market attempted to rally a few times today but came back to rest at intraday lows. The good news is those lows seemed to be support areas that the bears could not bust below. The two intraday rallies came in the morning and afternoon, the first possibly on earnings reactions and the second on no surprises from the FOMC press conference.
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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Wednesday, April 28, 2021
Facts: -0.28%, Volume lower, Closing range: 17%, Body: 32%
Good: Lower volume, sideways movement, with support above 14,000
Bad: Lower high and lower low with a low closing range
Highs/Lows: Lower high, lower low
Candle: Long upper wick above a small red body and low closing range
Advance/Decline: Just slightly more declining stocks than advancing stocks
Indexes: SPX (-0.08%), DJI (-0.48%), RUT (+0.13%), VIX (-1.59%)
Sectors: Energy (XLE +3.45%) and Communications (XLC +0.92%) were top. Real Estate (XLRE -0.35%) and Technology (XLK -0.93%)
Expectation: Sideways or Higher
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Market Overview
The market attempted to rally a few times today but came back to rest at intraday lows. The good news is those lows seemed to be support areas that the bears could not bust below. The two intraday rallies came in the morning and afternoon, the first possibly on earnings reactions and the second on no surprises from the FOMC press conference.
The Nasdaq closed with a -0.28% loss in a day after testing and getting support around 14,050 three times. The long upper wick was formed from the morning and afternoon rally. The small 32% red body rests in the bottom of the candle above a 17% closing range and a small lower wick. Volume was lower for the day and there were just slightly more declining stocks than advancing stocks.
The Russell 2000 (RUT) continues to outperform with a +0.13% advance today. The S&P 500 (SPX) declined -0.08% while the Dow Jones Industrial average (DJI) declined -0.48%.
The VIX volatility index declined -1.59%. The combination of low volatility, along with low volume decline, plus the support at intraday lows is a good signal.
Energy (XLE +1.21%) and Communications (XLC +0.92%) were the top sectors of the day. Energy was buoyed by positive data on oil demand. Communications rose on excitement over Alphabet's surprise beat on earnings. Real Estate (XLRE -0.35%) and Technology (XLK -0.93%) were the bottom performers for the day.
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Economic Indicators
The US Dollar (DXY) had declined -0.32%.
The US 30y treasury bond yield remained flat. The US 10y and 2y treasury note yields both declined.
High Yield Corporate Bond (HYG) prices rose while the Investment Grade Corporate Bond (LQD) prices stayed flat.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) declined slightly. Copper (COPPER1!) and Aluminum (ALI1!) also had small declines.
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Investor Sentiment
The put/call ratio rose to 0.602. 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 remains just on the greed side of the neutral area.
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Market Leaders
Alphabet (GOOGL) and Microsoft (MSFT) had opposite reactions to positive earnings reports, likely based on investor reaction to guidance given during the releases. Alphabet gapped higher with a +2.97% gain for the day. Microsoft (MSFT) gapped lower with a -2.83% loss for the day. Both break out in opposite directions from their respective bases. Microsoft's base broke downward but did get support at the 21d EMA line. Amazon (AMZN) continues a breakout from earlier this week with a +1.20% gain today. Apple (AAPL) moved lower with a -0.60% loss, but remains within its base.
Exxon Mobile (XOM), Mastercard (MA) and Visa (V) join Alphabet as the top four mega-caps for the day. Microsoft (MSFT), Tesla (TSLA), Taiwan Semiconductor (TSM) and ASML Holdings (ASML) were the bottom four.
UP Fintech (TIGR), FUTU Holdings (FUTU), SNAP (SNAP) and Etsy (ETSY) topped the daily update growth stock list. At the bottom of the list were Enphase (ENPH) and Pinterest (PINS) with big -14% losses.
AMD had a very positive post market reaction from yesterday's earnings report, but couldn't hold the gains and ended the day with a -1.40% loss.
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Looking ahead
On Thursday, new GDP data will be released which is expected to be 6.5%. Initial Jobless Claims data will hopefully continue to fall. Pending Home Sales data will be released after market open.
We will also get any reaction from Biden's remarks to congress which are expected to have updates on economic support as well as taxes to pay for infrastructure plans.
Earnings reports have been mostly positive this week, but reactions have been mixed. On Thursday, reports include Amazon (AMZN), Mastercard (MA), Comcast (CMCSA), Thermo Fisher Scientific (TMO), McDonald's (MCD), Baidu (BIDU), Atlassian (TEAM), Twitter (TWTR), Fortinet (FTNT), Royal Caribbean (RCL), and Logitech (LOGI).
Be sure to check your portfolio for earnings reports so you are not surprised.
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Trends, Support and Resistance
The index declined today but stayed about the 14,000 support area.
The trend line from the 3/5 low, points to a +0.99% advance. The five-day trend line results in a +0.71% gain. Despite the lower close, the one-day trend line points to a +0.20% for tomorrow.
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Wrap-up
A few positive earnings reports weren't enough to give the markets the lift they needed, although the bulls certainly made attempts during the day. Nervousness remained over additional earnings reports coming later today and this week. And investors await remarks from Biden that will include proposals around new taxes. The capital gains tax would seem to be priced in by now, but any further surprises from the President's speech could have a negative reaction.
However, given the support the index got at intraday lows above 14,000 and the positive earnings reports in after hours, it's reasonable to expect the markets to move higher tomorrow. At a minimum they should move sideways. If they move lower, then that should be a red flag that something else is going on.
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=-
Wednesday, April 28, 2021
Facts: -0.28%, Volume lower, Closing range: 17%, Body: 32%
Good: Lower volume, sideways movement, with support above 14,000
Bad: Lower high and lower low with a low closing range
Highs/Lows: Lower high, lower low
Candle: Long upper wick above a small red body and low closing range
Advance/Decline: Just slightly more declining stocks than advancing stocks
Indexes: SPX (-0.08%), DJI (-0.48%), RUT (+0.13%), VIX (-1.59%)
Sectors: Energy (XLE +3.45%) and Communications (XLC +0.92%) were top. Real Estate (XLRE -0.35%) and Technology (XLK -0.93%)
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The market attempted to rally a few times today but came back to rest at intraday lows. The good news is those lows seemed to be support areas that the bears could not bust below. The two intraday rallies came in the morning and afternoon, the first possibly on earnings reactions and the second on no surprises from the FOMC press conference.
The Nasdaq closed with a -0.28% loss in a day after testing and getting support around 14,050 three times. The long upper wick was formed from the morning and afternoon rally. The small 32% red body rests in the bottom of the candle above a 17% closing range and a small lower wick. Volume was lower for the day and there were just slightly more declining stocks than advancing stocks.
The Russell 2000 (RUT) continues to outperform with a +0.13% advance today. The S&P 500 (SPX) declined -0.08% while the Dow Jones Industrial average (DJI) declined -0.48%.
The VIX volatility index declined -1.59%. The combination of low volatility, along with low volume decline, plus the support at intraday lows is a good signal.
Energy (XLE +1.21%) and Communications (XLC +0.92%) were the top sectors of the day. Energy was buoyed by positive data on oil demand. Communications rose on excitement over Alphabet's surprise beat on earnings. Real Estate (XLRE -0.35%) and Technology (XLK -0.93%) were the bottom performers for the day.
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Economic Indicators
The US Dollar (DXY) had declined -0.32%.
The US 30y treasury bond yield remained flat. The US 10y and 2y treasury note yields both declined.
High Yield Corporate Bond (HYG) prices rose while the Investment Grade Corporate Bond (LQD) prices stayed flat.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) declined slightly. Copper (COPPER1!) and Aluminum (ALI1!) also had small declines.
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Investor Sentiment
The put/call ratio rose to 0.602. 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 remains just on the greed side of the neutral area.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Alphabet (GOOGL) and Microsoft (MSFT) had opposite reactions to positive earnings reports, likely based on investor reaction to guidance given during the releases. Alphabet gapped higher with a +2.97% gain for the day. Microsoft (MSFT) gapped lower with a -2.83% loss for the day. Both break out in opposite directions from their respective bases. Microsoft's base broke downward but did get support at the 21d EMA line. Amazon (AMZN) continues a breakout from earlier this week with a +1.20% gain today. Apple (AAPL) moved lower with a -0.60% loss, but remains within its base.
Exxon Mobile (XOM), Mastercard (MA) and Visa (V) join Alphabet as the top four mega-caps for the day. Microsoft (MSFT), Tesla (TSLA), Taiwan Semiconductor (TSM) and ASML Holdings (ASML) were the bottom four.
UP Fintech (TIGR), FUTU Holdings (FUTU), SNAP (SNAP) and Etsy (ETSY) topped the daily update growth stock list. At the bottom of the list were Enphase (ENPH) and Pinterest (PINS) with big -14% losses.
AMD had a very positive post market reaction from yesterday's earnings report, but couldn't hold the gains and ended the day with a -1.40% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
On Thursday, new GDP data will be released which is expected to be 6.5%. Initial Jobless Claims data will hopefully continue to fall. Pending Home Sales data will be released after market open.
We will also get any reaction from Biden's remarks to congress which are expected to have updates on economic support as well as taxes to pay for infrastructure plans.
Earnings reports have been mostly positive this week, but reactions have been mixed. On Thursday, reports include Amazon (AMZN), Mastercard (MA), Comcast (CMCSA), Thermo Fisher Scientific (TMO), McDonald's (MCD), Baidu (BIDU), Atlassian (TEAM), Twitter (TWTR), Fortinet (FTNT), Royal Caribbean (RCL), and Logitech (LOGI).
Be sure to check your portfolio for earnings reports so you are not surprised.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index declined today but stayed about the 14,000 support area.
The trend line from the 3/5 low, points to a +0.99% advance. The five-day trend line results in a +0.71% gain. Despite the lower close, the one-day trend line points to a +0.20% for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
A few positive earnings reports weren't enough to give the markets the lift they needed, although the bulls certainly made attempts during the day. Nervousness remained over additional earnings reports coming later today and this week. And investors await remarks from Biden that will include proposals around new taxes. The capital gains tax would seem to be priced in by now, but any further surprises from the President's speech could have a negative reaction.
However, given the support the index got at intraday lows above 14,000 and the positive earnings reports in after hours, it's reasonable to expect the markets to move higher tomorrow. At a minimum they should move sideways. If they move lower, then that should be a red flag that something else is going on.
Stay healthy and trade safe!
