Trend lines drawn from the 10/13 pivot day (29d), 10/30 bottom (15d), 11/13 (5d), and today 11/19 (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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Thursday, November 19, 2020
'Cause I try and I try and I try and I try
Facts: +0.87% higher, Volume higher, Closing range: 95%, Body: 83%
Good: Bullish all day, close at top of range
Bad: Did not beat yesterday’s high
Highs/Lows: Lower low, lower high
Candle: Very tiny wicks, thick green bullish day
Advance/Decline: 1.86, almost 2 advancing stocks for every declining stock
Sectors: Energy (XLE +1.64%) and Technology (XLK +0.81%) were top performing. Utilities (XLU -1.00%) was worst performing.
Expectation: Sideways or Higher
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Market Overview
After yesterday’s late afternoon change in character, the market reversed back to the behavior from the previous several days: modest gains, small-caps, energy as the leading sector and rising breadth across advancing stocks. The only thing that did not occur is a higher high and higher low, something to look for on Friday. The Nasdaq closed Thursday with a +0.87% gain and a 95% closing range. The 83% green body and +12.7% increase in volume represented the very bullish day after a small dip at market open. There were just under 2 advancing stocks for every declining stock.
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Indexes and Sectors
All the indices closed with gains while the Nasdaq led the day. The S&P 500 (SPX +0.39%), Dow Jones Industrial average (+0.15%) and the Russell 2000 (+0.84%) recovered some of yesterday’s losses. None of them made it back to yesterday’s highs. The RUT, just slightly behind the Nasdaq, showed energy in small-cap stocks again.
The leading sector of the day was Energy (XLE +1.64%). After dipping below the market performance in the morning, it was bought back in the afternoon to finish ahead of the other sectors. Technology (XLK +0.81%) and Communications (XLC +0.61%) were in second and third place. Utilities (XLU -1.00%) was the worst performing sector as investors are exiting this safer equities bet for more growth opportunities in other sectors.
The VIX volatility index decreased by -3.08%.
-=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 Indicators
US 30-year and 10-year Treasury bond yields decreased for the day and the spreads tightened for an additional day. The difference between Corporate and Treasury Bonds yields increased.
The US dollar (DXY +0.03%) briefly strengthened during the day, but is currently at a similar value to yesterday.
Silver (SILVER -1.23%) and Gold (GOLD -0.36%) both decreased for the day. Timber (WOOD -0.44%) finally pulled back from recent gains. Aluminum Futures (ALI1! -0.67%) also saw its first decline in recent weeks.
Crude Oil futures (CRUDEOIL1! -1.47%) pulled back possibly due to new lock downs and jobless claims data showing possible weaker demand for holidays.
Adding the Put/Call ratio to the daily indicators. It is currently around 0.635. A contrarian indictor that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 and below, watch for a reversal in the market. It’s currently at 0.635 and trending down.
-=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 +0.52%) dipped below its 21d EMA in the morning but closed well above it by the end of the day. Microsoft (MSFT +0.63%) traded below its 50d MA but closed above yet remained below its 21d EMA. Amazon (AMZN +0.37%) remans below both key moving averages. Alphabet (GOOG +0.98%) continues to trade well above both lines. The rest of the mega-caps followed performance of the sectors.
Limited Brands (LB +17.67%) soared to new highs after wowing investors by smashing expectations and reporting a 28% in comparable store sales. Ross Stores (ROST -0.99%) is up after hours after topping estimates. BJ’s Wholesale Club (BJ +3.60%) was down after hours despite beating expectations. Macy’s (M +2.11%) announced an earnings beat before open and was up on the day, but has retreated after hours. Overall it seems to be a good week for retail earnings reports.
Growth stocks generally had a good day. Chinese EV Car company NIO (NIO +7.52%) resumed its rise with a big gain. ETSY (ETSY +5.90%), SolarEdge (SEDG +4.82%), SNAP (SNAP +4.09%) and SQ (SQ +3.30%) were among several of the top winners on the day. Fastly (FSLY -0.99%) and Fiverr (FVRR -1.62%) were among a handful of pullbacks after several days of gains. Zoom Video (ZM -0.18%) fell back slightly after yesterday’s gain on pandemic lockdown fears.
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Looking ahead
Tomorrow will bring an update FOMC member Kaplan, which will likely echo the sentiment from FOMC comments earlier this week. In addition, the Treasury Department reports out to congress.
Foot Locker (FL +3.48%) will be among a few retailers and other stocks that will closing the week with earnings reports before market open.
-=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 index is closing in on new highs but still needs to get past the 10/12 pivot day high that has provided resistance the past week. The trend line from the 10/30 bottom is pointing to a +2.10% gain. The one-day and five-day point to either side of the 10/12 pivot high. They both would be under a +1.00% gain.
The trend line from the 10/12 pivot day is pointing to a -1.69%. If the index can close above the 10/12 pivot day high, then I’d remove this trend line moving forward.
-=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
There are two tests for the index on Friday. First is to make a higher high than today and ideally a higher low as well. The second would be to close above the 10/12 pivot day. A new all-time high would be great but could wait for next week if the index passed those two tests. There is still quite a lot of resistance to overcome with new pandemic lockdowns and the treasury not extending emergency lending programs. Keep an eye out for how these impact the markets tomorrow.
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=-
Thursday, November 19, 2020
'Cause I try and I try and I try and I try
Facts: +0.87% higher, Volume higher, Closing range: 95%, Body: 83%
Good: Bullish all day, close at top of range
Bad: Did not beat yesterday’s high
Highs/Lows: Lower low, lower high
Candle: Very tiny wicks, thick green bullish day
Advance/Decline: 1.86, almost 2 advancing stocks for every declining stock
Sectors: Energy (XLE +1.64%) and Technology (XLK +0.81%) were top performing. Utilities (XLU -1.00%) was worst performing.
Expectation: Sideways or Higher
-=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
After yesterday’s late afternoon change in character, the market reversed back to the behavior from the previous several days: modest gains, small-caps, energy as the leading sector and rising breadth across advancing stocks. The only thing that did not occur is a higher high and higher low, something to look for on Friday. The Nasdaq closed Thursday with a +0.87% gain and a 95% closing range. The 83% green body and +12.7% increase in volume represented the very bullish day after a small dip at market open. There were just under 2 advancing stocks for every declining stock.
-=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
All the indices closed with gains while the Nasdaq led the day. The S&P 500 (SPX +0.39%), Dow Jones Industrial average (+0.15%) and the Russell 2000 (+0.84%) recovered some of yesterday’s losses. None of them made it back to yesterday’s highs. The RUT, just slightly behind the Nasdaq, showed energy in small-cap stocks again.
The leading sector of the day was Energy (XLE +1.64%). After dipping below the market performance in the morning, it was bought back in the afternoon to finish ahead of the other sectors. Technology (XLK +0.81%) and Communications (XLC +0.61%) were in second and third place. Utilities (XLU -1.00%) was the worst performing sector as investors are exiting this safer equities bet for more growth opportunities in other sectors.
The VIX volatility index decreased by -3.08%.
-=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 Indicators
US 30-year and 10-year Treasury bond yields decreased for the day and the spreads tightened for an additional day. The difference between Corporate and Treasury Bonds yields increased.
The US dollar (DXY +0.03%) briefly strengthened during the day, but is currently at a similar value to yesterday.
Silver (SILVER -1.23%) and Gold (GOLD -0.36%) both decreased for the day. Timber (WOOD -0.44%) finally pulled back from recent gains. Aluminum Futures (ALI1! -0.67%) also saw its first decline in recent weeks.
Crude Oil futures (CRUDEOIL1! -1.47%) pulled back possibly due to new lock downs and jobless claims data showing possible weaker demand for holidays.
Adding the Put/Call ratio to the daily indicators. It is currently around 0.635. A contrarian indictor that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 and below, watch for a reversal in the market. It’s currently at 0.635 and trending down.
-=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 +0.52%) dipped below its 21d EMA in the morning but closed well above it by the end of the day. Microsoft (MSFT +0.63%) traded below its 50d MA but closed above yet remained below its 21d EMA. Amazon (AMZN +0.37%) remans below both key moving averages. Alphabet (GOOG +0.98%) continues to trade well above both lines. The rest of the mega-caps followed performance of the sectors.
Limited Brands (LB +17.67%) soared to new highs after wowing investors by smashing expectations and reporting a 28% in comparable store sales. Ross Stores (ROST -0.99%) is up after hours after topping estimates. BJ’s Wholesale Club (BJ +3.60%) was down after hours despite beating expectations. Macy’s (M +2.11%) announced an earnings beat before open and was up on the day, but has retreated after hours. Overall it seems to be a good week for retail earnings reports.
Growth stocks generally had a good day. Chinese EV Car company NIO (NIO +7.52%) resumed its rise with a big gain. ETSY (ETSY +5.90%), SolarEdge (SEDG +4.82%), SNAP (SNAP +4.09%) and SQ (SQ +3.30%) were among several of the top winners on the day. Fastly (FSLY -0.99%) and Fiverr (FVRR -1.62%) were among a handful of pullbacks after several days of gains. Zoom Video (ZM -0.18%) fell back slightly after yesterday’s gain on pandemic lockdown fears.
-=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 an update FOMC member Kaplan, which will likely echo the sentiment from FOMC comments earlier this week. In addition, the Treasury Department reports out to congress.
Foot Locker (FL +3.48%) will be among a few retailers and other stocks that will closing the week with earnings reports before market open.
-=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 index is closing in on new highs but still needs to get past the 10/12 pivot day high that has provided resistance the past week. The trend line from the 10/30 bottom is pointing to a +2.10% gain. The one-day and five-day point to either side of the 10/12 pivot high. They both would be under a +1.00% gain.
The trend line from the 10/12 pivot day is pointing to a -1.69%. If the index can close above the 10/12 pivot day high, then I’d remove this trend line moving forward.
-=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
There are two tests for the index on Friday. First is to make a higher high than today and ideally a higher low as well. The second would be to close above the 10/12 pivot day. A new all-time high would be great but could wait for next week if the index passed those two tests. There is still quite a lot of resistance to overcome with new pandemic lockdowns and the treasury not extending emergency lending programs. Keep an eye out for how these impact the markets tomorrow.
Take care!
