Trend lines drawn from the 10/13 pivot day (27d), 10/30 bottom (13d), 11/11 (5d), and today 11/17 (1d).
I am making some changes to the chart presentation and renaming the series to reflect the other data points I am including. Still based out of the Nasdaq composite.
I do occasionally have some errors or typos and will correct them in my blog or in the comments on TradingView. I do not have an editor and do this in my free time.
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Tuesday, November 17, 2020
When I’m without it
The more that I want it
Facts: -0.21% lower, Volume lower, Closing range: 48%, Body: 14%
Good: Higher high, Higher low trend continues
Bad: Resistance, Could not break into 12,000
Highs/Lows: Higher high, higher low
Candle: Indecision candle with open and close in a tight range
Advance/Decline: 1.09, just slightly more advancing stocks
Sectors: Energy (XLE +1.02%) and Real Estate (XLRE +0.05% at the top. Utilities (XLU -1.96%) is the worst performing.
Expectation: Sideways
A note on Expectation: Avoid reading expectation as a prediction or guide for investment. I try to have an expectation for the market based on the technical and fundamental data available. Then if the market does something different, it compels me to ask why and understand if something is fundamentally changing or if its normal action.
Today is a good example. My expectation was Higher (see yesterday’s update), but we had a sideways to lower result. You can see there is an indecision candle for the Nasdaq, which also shows a possible character change. I will set an expectation for Sideways tomorrow, and if the market goes up or down that becomes more signal on overall direction.
There is no reliable way to predict what the market will do each day. The best I have done in a computer algorithm analyzing candlestick charts is 50.01% accuracy. A coin flip.
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Market Overview
Today the Nasdaq had a lot of back and forth but within a tight trading range. After shaking off lower than expected retail sales growth, the index grew to a higher high than the previous day. But later in the day sold off perhaps due to dire economic outlooks from FOMC members and the Fed’s Jerome Powell. At the end of the day, the index closed at a -0.21% loss with a small 14% red body and a closing range of 48%. Even though volume was lower than the previous day, its higher than the recent average and shows the undecided outcome between bulls and bears for the day. The index was unable to approach the 10/12 pivot-day high and resistance point, something that needs to happen to keep the rally alive.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The Russell 2000 (RUT +0.37%) continued to shine, turning in the only positive result among our indexes. The S&P 500 (SPX -0.48%) and Dow Jones Industrials (DJI -0.56%) both ended with losses and very thin-body candles. Small-caps continue to get the attention in this market.
Given the makeup of the indexes, it was a bit surprising to see Energy (XLE +1.02%) still outperform the other sectors. But keep in mind that XLE represents the smallest percentage of total market value in the SPX. Real Estate (XLRE +0.05%) was the only other sector to end the day in the positive. Utilities (XLU -1.96%) led the sectors in the morning but sold off to end the day with the worst performance.
The VIX volatility index increased slightly by 1.16%.
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Bonds, Greenback and Commodities
Treasury Bond yields decreased for the day, but still within a tight range for the previous several days. The 10Y-2Y spread also decreased slightly as well. Corporate to Treasury Bonds spread remained the same.
The US dollar (DXY -0.22%) weakened further.
Silver (SILVER -0.98%) and Gold (GOLD -0.47%) both decreased for the day. Timber (WOOD +0.16%) started to slow down from recent accelerated growth. Aluminum Futures (ALI1! +1.11%) continues to climb on demand from manufacturing and beverage industries.
Crude Oil futures (CRUDEOIL -0.81%) dropped but is still up over 16% since the end of October.
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Market Leaders
Apple (AAPL -0.76%), Microsoft (MSFT -1.28%) and Alphabet (GOOG -0.63%) were all down for the day, with Microsoft testing the 21d EMA but staying above. Amazon (AMZN +0.15%) rose above the 21d EMA and 50d EMA but ended the day below these keys moving average lines. Tesla (TSLA +8.21%) got a boost from the announcement it will be included in the S&P 500 index. Only a handful of other mega-caps ended the day with gains. Walmart (WMT -2.01%) lossed for the day after beating expectations in earnings and revenue, but possibly disappointing on outlook. Kohls (KSS +11.59%) also beat earnings expectations the stock price rose, but the stock has traded mostly sideways since March lows.
Growth stocks seemed to have a better day. Square (SQ +4.88%), Fastly (FSLY +3.49%), Etsy (ETSY +2.55%) were among stocks that have sold off recently but had significant gains on Tuesday. That makes sense given the RUT and Nasdaq outperformed the S&P 500 and DJI. Sea Limited (SE -4.26%) turned in losses for the day after showing a slowdown in business via its earnings report. Moderna (MRNA -4.90%) pulled back after making a new all-time high the previous day.
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Looking ahead
Tomorrow will bring updates on Housing Starts and Building Permits which could impact Real Estate and Materials sectors as well as be another indicator economic health. Crude Oil Inventories will also be announced.
Target (TGT -1.30%), TJX Companies (TJX +0.08%), Lowe’s (LOW -1.26%), and Limited Brands (LB +1.99%) will continue the stream of retail earnings reports tomorrow.
NVIDIA (NVDA -0.69%) will also report earnings, one of the few big tech companies to report this week.
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Trends, Support and Resistance
The trend line from the 10/30 bottom is still pointing to a new all-time high. That would be a +2.11% gain from today’s close. The five-day trend and one-day trend line is pointing to a +0.52% gain, just at the 10/12 pivot high.
The trend line from the 10/12 pivot day is pointing to a -2.23% loss which would be just above the 21d EMA.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
After mixed signals from economic news and earnings reports, the market turned in an indecisive day that follows the trend from the middle of last week. Tomorrow should bring some confirmation of direction higher or lower. Be prepared and have a plan for both.
Take care!
I am making some changes to the chart presentation and renaming the series to reflect the other data points I am including. Still based out of the Nasdaq composite.
I do occasionally have some errors or typos and will correct them in my blog or in the comments on TradingView. I do not have an editor and do this in my free time.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, November 17, 2020
When I’m without it
The more that I want it
Facts: -0.21% lower, Volume lower, Closing range: 48%, Body: 14%
Good: Higher high, Higher low trend continues
Bad: Resistance, Could not break into 12,000
Highs/Lows: Higher high, higher low
Candle: Indecision candle with open and close in a tight range
Advance/Decline: 1.09, just slightly more advancing stocks
Sectors: Energy (XLE +1.02%) and Real Estate (XLRE +0.05% at the top. Utilities (XLU -1.96%) is the worst performing.
Expectation: Sideways
A note on Expectation: Avoid reading expectation as a prediction or guide for investment. I try to have an expectation for the market based on the technical and fundamental data available. Then if the market does something different, it compels me to ask why and understand if something is fundamentally changing or if its normal action.
Today is a good example. My expectation was Higher (see yesterday’s update), but we had a sideways to lower result. You can see there is an indecision candle for the Nasdaq, which also shows a possible character change. I will set an expectation for Sideways tomorrow, and if the market goes up or down that becomes more signal on overall direction.
There is no reliable way to predict what the market will do each day. The best I have done in a computer algorithm analyzing candlestick charts is 50.01% accuracy. A coin flip.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Today the Nasdaq had a lot of back and forth but within a tight trading range. After shaking off lower than expected retail sales growth, the index grew to a higher high than the previous day. But later in the day sold off perhaps due to dire economic outlooks from FOMC members and the Fed’s Jerome Powell. At the end of the day, the index closed at a -0.21% loss with a small 14% red body and a closing range of 48%. Even though volume was lower than the previous day, its higher than the recent average and shows the undecided outcome between bulls and bears for the day. The index was unable to approach the 10/12 pivot-day high and resistance point, something that needs to happen to keep the rally alive.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The Russell 2000 (RUT +0.37%) continued to shine, turning in the only positive result among our indexes. The S&P 500 (SPX -0.48%) and Dow Jones Industrials (DJI -0.56%) both ended with losses and very thin-body candles. Small-caps continue to get the attention in this market.
Given the makeup of the indexes, it was a bit surprising to see Energy (XLE +1.02%) still outperform the other sectors. But keep in mind that XLE represents the smallest percentage of total market value in the SPX. Real Estate (XLRE +0.05%) was the only other sector to end the day in the positive. Utilities (XLU -1.96%) led the sectors in the morning but sold off to end the day with the worst performance.
The VIX volatility index increased slightly by 1.16%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Bonds, Greenback and Commodities
Treasury Bond yields decreased for the day, but still within a tight range for the previous several days. The 10Y-2Y spread also decreased slightly as well. Corporate to Treasury Bonds spread remained the same.
The US dollar (DXY -0.22%) weakened further.
Silver (SILVER -0.98%) and Gold (GOLD -0.47%) both decreased for the day. Timber (WOOD +0.16%) started to slow down from recent accelerated growth. Aluminum Futures (ALI1! +1.11%) continues to climb on demand from manufacturing and beverage industries.
Crude Oil futures (CRUDEOIL -0.81%) dropped but is still up over 16% since the end of October.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL -0.76%), Microsoft (MSFT -1.28%) and Alphabet (GOOG -0.63%) were all down for the day, with Microsoft testing the 21d EMA but staying above. Amazon (AMZN +0.15%) rose above the 21d EMA and 50d EMA but ended the day below these keys moving average lines. Tesla (TSLA +8.21%) got a boost from the announcement it will be included in the S&P 500 index. Only a handful of other mega-caps ended the day with gains. Walmart (WMT -2.01%) lossed for the day after beating expectations in earnings and revenue, but possibly disappointing on outlook. Kohls (KSS +11.59%) also beat earnings expectations the stock price rose, but the stock has traded mostly sideways since March lows.
Growth stocks seemed to have a better day. Square (SQ +4.88%), Fastly (FSLY +3.49%), Etsy (ETSY +2.55%) were among stocks that have sold off recently but had significant gains on Tuesday. That makes sense given the RUT and Nasdaq outperformed the S&P 500 and DJI. Sea Limited (SE -4.26%) turned in losses for the day after showing a slowdown in business via its earnings report. Moderna (MRNA -4.90%) pulled back after making a new all-time high the previous day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tomorrow will bring updates on Housing Starts and Building Permits which could impact Real Estate and Materials sectors as well as be another indicator economic health. Crude Oil Inventories will also be announced.
Target (TGT -1.30%), TJX Companies (TJX +0.08%), Lowe’s (LOW -1.26%), and Limited Brands (LB +1.99%) will continue the stream of retail earnings reports tomorrow.
NVIDIA (NVDA -0.69%) will also report earnings, one of the few big tech companies to report this week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The trend line from the 10/30 bottom is still pointing to a new all-time high. That would be a +2.11% gain from today’s close. The five-day trend and one-day trend line is pointing to a +0.52% gain, just at the 10/12 pivot high.
The trend line from the 10/12 pivot day is pointing to a -2.23% loss which would be just above the 21d EMA.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
After mixed signals from economic news and earnings reports, the market turned in an indecisive day that follows the trend from the middle of last week. Tomorrow should bring some confirmation of direction higher or lower. Be prepared and have a plan for both.
Take care!
