Summary: Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way.
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, August 3, 2021
Facts: ++0.55%, Volume higher, Closing range: 99%, Body: 26%
Good: High closing range, long lower wick as bulls come in after morning selling
Bad: Lower low, no support at 14,650
Highs/Lows: Lower high, lower low
Candle: Small green body above a long lower wick.
Advanced/Decline: 0.67, three declining stocks for every two advancing stocks
Indexes: SPX (+0.82%), DJI (+0.80%), RUT (+0.36%), VIX (-7.40%)
Sectors: Energy (XLE +1.71%) and Health (XLV +1.39%) at the top. Real Estate (XLRE +0.41%) and Communications (XLC -0.45%) at the bottom.
Expectation: Sideways or Higher
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Market Overview
Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way.
The Nasdaq closed with a +0.55% after testing its 21d EMA in the opening hour. The candle has a long lower wick from the dip, but the index rallied the rest of the day to end with a 99% closing range above a small green body. The candlestick's pattern is a hanging man within an uptrend. Despite the afternoon rally, there were three declining stocks for every two advancing stocks. The hanging man and low A/D show the sellers are present in the market even as the indexes rose.
The S&P 500 (SPX) climbed 0.82% to close at another record. The Dow Jones Industrial Average (DJI) rose +0.80%. The Russell 2000 (RUT) gained +0.36%.
The VIX volatility index declined -7.40%.
Energy (XLE +1.71%) and Health (XLV +1.39%) were top gainers for the day. Communications (XLC -0.45%) was the only losing sector for the day.
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Economic Indicators
Factory Orders data came in higher than expected, counter to the Manufacturing data that showed a slowdown.
The US Dollar (DXY) was about flat for the day.
The US 30y, 10y, and 2y Treasury yields all declined for the day.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) advanced, and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) advanced. Aluminum (ALI1!) had its first decline after several days of advance.
Bitcoin (BTCUSD) declined -2.52%. Ethereum (ETHUSD) declined 03.84%, its first significant decline in two weeks.
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Investor Sentiment
The put/call ratio declined to 0.610. 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 moved out of Extreme Fear, back into the Fear level.
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Market Leaders
All four largest mega-caps gained for the day, with Apple (AAPL) leading the way with a +1.26% gain. Amazon (AMZN) bounce off 3300 to end the day with a +1.04% gain. Microsoft (MSFT) advanced +0.81%. Alphabet (GOOGL) climbed by +0.58%.
Pfizer (PFE), Eli Lilly (LLY), Oracle (ORCL), and Toyota Motor (TM ) were the top gaining mega-caps today. At the bottom of the list were Visa (V), Alibaba (BABA), Walt Disney (DIS), and Mastercard (MA).
Solar Edge (SEDG) blew away the competition in the daily update growth list with a +16.33%. The other top growth stocks in the list were Snowflake (SNOW), Enphase (ENPH), and Pinterest (PINS). The Chinese stocks in the list found themselves at the bottom again, with NIO (NIO), FUTU Holdings (FUTU), UP Fintech (TIGR), and Ehang Holding (EH) losing between -2.8% and -5.8%.
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Looking ahead
Several economic indicators will get updates tomorrow. Mortgage data will be available early in the morning. Then Nonfarm Employment Change data will give an update on the labor market. Purchase Manager Index data for Services will show growth for the services sector, while Non-Manufacturing purchasing manager index data will provide a broader look at economic activity. Finally, Crude Oil Inventories get an update later in the morning.
Toyota Motor (TM ), Sony (SONY), CVS (CVS), Booking (BKNG), General Motors (GM), Uber (UBER), Roku (ROKU), Allstate (ALL), Etsy (ETSY), AMC Entertainment (AMC), Fastly (FSLY), Lemonade (LMND), and DermTech (DMTK) are some of the exciting earnings reports for Wednesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq tested the 21d exponential moving average during the morning dip. In that area, bulls came in to buy the index back up and close with a gain.
The one-day trend line leads to a +0.98% gain for tomorrow.
The trend-line from the 7/19 low ends with a +0.64% advance.
The five-day trend line points to a -0.58% loss.
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Wrap-up
Even the worsening COVID situation doesn't seem to dampen the spirits of investors this week. Much of the impact will come from how the government responds to the pandemic vs. the pandemic itself. After 18 months of dealing with the pandemic, the public has figured out how to continue operating, and the economy keeps going.
The hanging man candlestick in an uptrend is a signal of a growing number of sellers. The expectation for tomorrow is sideways or 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=-
Tuesday, August 3, 2021
Facts: ++0.55%, Volume higher, Closing range: 99%, Body: 26%
Good: High closing range, long lower wick as bulls come in after morning selling
Bad: Lower low, no support at 14,650
Highs/Lows: Lower high, lower low
Candle: Small green body above a long lower wick.
Advanced/Decline: 0.67, three declining stocks for every two advancing stocks
Indexes: SPX (+0.82%), DJI (+0.80%), RUT (+0.36%), VIX (-7.40%)
Sectors: Energy (XLE +1.71%) and Health (XLV +1.39%) at the top. Real Estate (XLRE +0.41%) and Communications (XLC -0.45%) at the bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way.
The Nasdaq closed with a +0.55% after testing its 21d EMA in the opening hour. The candle has a long lower wick from the dip, but the index rallied the rest of the day to end with a 99% closing range above a small green body. The candlestick's pattern is a hanging man within an uptrend. Despite the afternoon rally, there were three declining stocks for every two advancing stocks. The hanging man and low A/D show the sellers are present in the market even as the indexes rose.
The S&P 500 (SPX) climbed 0.82% to close at another record. The Dow Jones Industrial Average (DJI) rose +0.80%. The Russell 2000 (RUT) gained +0.36%.
The VIX volatility index declined -7.40%.
Energy (XLE +1.71%) and Health (XLV +1.39%) were top gainers for the day. Communications (XLC -0.45%) was the only losing sector for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
Factory Orders data came in higher than expected, counter to the Manufacturing data that showed a slowdown.
The US Dollar (DXY) was about flat for the day.
The US 30y, 10y, and 2y Treasury yields all declined for the day.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) advanced, and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) advanced.
Copper (COPPER1!) advanced. Aluminum (ALI1!) had its first decline after several days of advance.
Bitcoin (BTCUSD) declined -2.52%. Ethereum (ETHUSD) declined 03.84%, its first significant decline in two weeks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.610. 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 moved out of Extreme Fear, back into the Fear level.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps gained for the day, with Apple (AAPL) leading the way with a +1.26% gain. Amazon (AMZN) bounce off 3300 to end the day with a +1.04% gain. Microsoft (MSFT) advanced +0.81%. Alphabet (GOOGL) climbed by +0.58%.
Pfizer (PFE), Eli Lilly (LLY), Oracle (ORCL), and Toyota Motor (TM ) were the top gaining mega-caps today. At the bottom of the list were Visa (V), Alibaba (BABA), Walt Disney (DIS), and Mastercard (MA).
Solar Edge (SEDG) blew away the competition in the daily update growth list with a +16.33%. The other top growth stocks in the list were Snowflake (SNOW), Enphase (ENPH), and Pinterest (PINS). The Chinese stocks in the list found themselves at the bottom again, with NIO (NIO), FUTU Holdings (FUTU), UP Fintech (TIGR), and Ehang Holding (EH) losing between -2.8% and -5.8%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Several economic indicators will get updates tomorrow. Mortgage data will be available early in the morning. Then Nonfarm Employment Change data will give an update on the labor market. Purchase Manager Index data for Services will show growth for the services sector, while Non-Manufacturing purchasing manager index data will provide a broader look at economic activity. Finally, Crude Oil Inventories get an update later in the morning.
Toyota Motor (TM ), Sony (SONY), CVS (CVS), Booking (BKNG), General Motors (GM), Uber (UBER), Roku (ROKU), Allstate (ALL), Etsy (ETSY), AMC Entertainment (AMC), Fastly (FSLY), Lemonade (LMND), and DermTech (DMTK) are some of the exciting earnings reports for Wednesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq tested the 21d exponential moving average during the morning dip. In that area, bulls came in to buy the index back up and close with a gain.
The one-day trend line leads to a +0.98% gain for tomorrow.
The trend-line from the 7/19 low ends with a +0.64% advance.
The five-day trend line points to a -0.58% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Even the worsening COVID situation doesn't seem to dampen the spirits of investors this week. Much of the impact will come from how the government responds to the pandemic vs. the pandemic itself. After 18 months of dealing with the pandemic, the public has figured out how to continue operating, and the economy keeps going.
The hanging man candlestick in an uptrend is a signal of a growing number of sellers. The expectation for tomorrow is sideways or higher.
Stay healthy and trade safe!
