Summary: After higher than expected producer price index data this morning, investors prepared themselves for the Fed comments scheduled on Wednesday. Major indices fell on the fear that Fed officials will start to push for earlier interest rate hikes and tapering of asset purchase programs.
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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Tuesday, June 15, 2021
Facts: -0.71%, Volume higher, Closing range: 17%, Body: 79%
Good: Held above 14,000 support area
Bad: Selling most of the day. Lower high and lower low.
Highs/Lows: Lower high, lower low
Candle: Thick red body with small upper and lower wicks.
Advanced/Decline: 0.42, Two declining stocks for every advancing stock
Indexes: SPX (-0.20%), DJI (-0.27%), RUT (-0.26%), VIX (+3.72%)
Sectors: Energy (XLE +1.90%) and Industrials (XLI +0.43%) were top. Technology (XLK -0.61%) and Real Estate (XLRE -0.92%) were bottom.
Expectation: Sideways or Lower
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Market Overview
After higher than expected producer price index data this morning, investors prepared themselves for the Fed comments scheduled on Wednesday. Major indices fell on the fear that Fed officials will start to push for earlier interest rate hikes and tapering of asset purchase programs.
The Nasdaq closed with a -0.71% loss for the day, on higher volume. The candle is predominantly a red body and represents selling throughout the day as the bears stepped in. The closing range of 17% is above a small lower wick formed from a small rally into the close. There were two declining stocks for every advancing stock.
The tech-heavy Nasdaq had the worst losses for the day. The S&P 500 (SPX) declined -0.20%. The Dow Jones Industrial Average (DJI) lost -0.27%. The Russell 2000 (RUT) fell -0.26%.
The VIX volatility index rose +3.72%.
Energy (XLE +1.90%) and Industrials (XLI +0.43%) were the top gaining sectors for the day. Technology (XLK -0.61%) and Real Estate (XLRE -0.92%) were at the bottom of the list.
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Economic Indicators
The US Dollar (DXY) was flat with only a +0.01% advance.
The US 30y and 10y Treasury yields remained about the same while the 2y yield dropped.
High Yield Corporate Bond (HYG) prices declined while Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -0.89%. Ethereum (ETHUSD) declined -1.49%.
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Investor Sentiment
The put/call ratio rose to 0.541. 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. Below that level is overly bullish.
The CNN Fear & Greed index is at neutral.
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Market Leaders
All four largest mega-caps declined today, but all remain above their key 50 day moving average and 21d exponential moving average lines. Alphabet (GOOGL) declined -0.84%, Apple (AAPL) dropped -0.64%. Microsoft (MSFT) declined -0.59%. Amazon (AMZN) lost just -0.02%. All of these declines were on lighter volume.
Exxon Mobile (XOM) and Chevron (CVX) topped the mega-cap list with 3.6% and 2.2% gains. Toyota Motor (TM ) and AT&T (T) were the next two best-performing mega-caps. At the bottom of the list were Adobe (ADBE), Netflix (NFLX), Alibaba (BABA), and Tesla (TSLA).
Only Pinterest (PINS) and D.R. Horton (DHI) gained for the day in the daily update growth stock list. The worst losers were Up Fintech (TIGR), with a -16.3% loss, Lemonade (LMND), Roku (ROKU), and GrowGeneration (GRWG).
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Looking ahead
Build Permits and Housing Starts data will be released in the morning on Wednesday. Crude Oil Inventories get an update after the market opens.
The most important event for the week will come in the afternoon. The Fed will release Meeting Minutes and a Fed Interest Rate Decision at 2:00 pm. The Fed Economic Projections will follow that. Investors will watch these updates from the Fed very closely, and the reactions could be oversized in either direction.
There are no significant earnings releases for this daily update on Wednesday.
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Trends, Support, and Resistance
The index remained above the 14,000 support area throughout the day.
The five-day trend-line and the trend-line from the 5/12 low points to a +067% advance for Wednesday.
The one-day trend-line points to a -0.58% decline for tomorrow.
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Wrap-up
I set the expectation for sideways yesterday, not sure which way the index would go based on several days of gains and resistance at the all-time high. Fear won out after the producer price index data was higher than expected. Based on the red candle, the expectation will be for Sideways or Lower, but the result really depends on the reaction to the Fed statements in the afternoon.
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=-
Tuesday, June 15, 2021
Facts: -0.71%, Volume higher, Closing range: 17%, Body: 79%
Good: Held above 14,000 support area
Bad: Selling most of the day. Lower high and lower low.
Highs/Lows: Lower high, lower low
Candle: Thick red body with small upper and lower wicks.
Advanced/Decline: 0.42, Two declining stocks for every advancing stock
Indexes: SPX (-0.20%), DJI (-0.27%), RUT (-0.26%), VIX (+3.72%)
Sectors: Energy (XLE +1.90%) and Industrials (XLI +0.43%) were top. Technology (XLK -0.61%) and Real Estate (XLRE -0.92%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
After higher than expected producer price index data this morning, investors prepared themselves for the Fed comments scheduled on Wednesday. Major indices fell on the fear that Fed officials will start to push for earlier interest rate hikes and tapering of asset purchase programs.
The Nasdaq closed with a -0.71% loss for the day, on higher volume. The candle is predominantly a red body and represents selling throughout the day as the bears stepped in. The closing range of 17% is above a small lower wick formed from a small rally into the close. There were two declining stocks for every advancing stock.
The tech-heavy Nasdaq had the worst losses for the day. The S&P 500 (SPX) declined -0.20%. The Dow Jones Industrial Average (DJI) lost -0.27%. The Russell 2000 (RUT) fell -0.26%.
The VIX volatility index rose +3.72%.
Energy (XLE +1.90%) and Industrials (XLI +0.43%) were the top gaining sectors for the day. Technology (XLK -0.61%) and Real Estate (XLRE -0.92%) were at the bottom of the list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) was flat with only a +0.01% advance.
The US 30y and 10y Treasury yields remained about the same while the 2y yield dropped.
High Yield Corporate Bond (HYG) prices declined while Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -0.89%. Ethereum (ETHUSD) declined -1.49%.
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Investor Sentiment
The put/call ratio rose to 0.541. 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. Below that level is overly bullish.
The CNN Fear & Greed index is at neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps declined today, but all remain above their key 50 day moving average and 21d exponential moving average lines. Alphabet (GOOGL) declined -0.84%, Apple (AAPL) dropped -0.64%. Microsoft (MSFT) declined -0.59%. Amazon (AMZN) lost just -0.02%. All of these declines were on lighter volume.
Exxon Mobile (XOM) and Chevron (CVX) topped the mega-cap list with 3.6% and 2.2% gains. Toyota Motor (TM ) and AT&T (T) were the next two best-performing mega-caps. At the bottom of the list were Adobe (ADBE), Netflix (NFLX), Alibaba (BABA), and Tesla (TSLA).
Only Pinterest (PINS) and D.R. Horton (DHI) gained for the day in the daily update growth stock list. The worst losers were Up Fintech (TIGR), with a -16.3% loss, Lemonade (LMND), Roku (ROKU), and GrowGeneration (GRWG).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Build Permits and Housing Starts data will be released in the morning on Wednesday. Crude Oil Inventories get an update after the market opens.
The most important event for the week will come in the afternoon. The Fed will release Meeting Minutes and a Fed Interest Rate Decision at 2:00 pm. The Fed Economic Projections will follow that. Investors will watch these updates from the Fed very closely, and the reactions could be oversized in either direction.
There are no significant earnings releases for this daily update on Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index remained above the 14,000 support area throughout the day.
The five-day trend-line and the trend-line from the 5/12 low points to a +067% advance for Wednesday.
The one-day trend-line points to a -0.58% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
I set the expectation for sideways yesterday, not sure which way the index would go based on several days of gains and resistance at the all-time high. Fear won out after the producer price index data was higher than expected. Based on the red candle, the expectation will be for Sideways or Lower, but the result really depends on the reaction to the Fed statements in the afternoon.
Stay healthy and trade safe!
