Nasdaq Composite Index CFD
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD, USOIL - December 8Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
It started with the gap (3162.58-3156.48) falling and closed at -0.14%.
We have to see if we can ascend above the 3176.40 point quickly.
If it falls this way, it is expected to hit the 3104.0 point.
In the CCI-RC indicator, there have been 3 attempts for the CCI line to break above the EMA line, all of which failed.
So, if you get support at 3104.0 and do not rise above the 3294.62 point, it is expected to fall below the 3008.91 point.
If it rises by breaking above the downtrend lines (2) and (3), an uptrend to renew the New High is expected.
---------------------------------
(DJI 1D chart)
It started with the gap (30218.3-30233.0) rising and closed at -0.49%.
It remains to be seen if the index will remain above the 29467.9 point.
----------------------------
(IXIC 1D chart)
It started with the fall of the gap (12464.2-12399.3) and closed at 0.70%.
It remains to be seen if the index will hold above the uptrend line (2).
------------------------------
(SPX 1D chart)
It started with the fall of the gap (3699.1-3694.7) and closed at -0.19%.
It remains to be seen whether the index will hold between the uptrend line (3)-(4), the uptrend channel.
-------------------------------
(XAUUSD 1D chart)
It rose to the 1855.500-1871.828 range.
It remains to be seen if any attempts can be made to break above this critical interval and break the downtrend line (5)-(6).
If it falls from the 1855.500 point, it is a short-term Stop Loss.
If you touch the 1899.330 point and fall, I think it's good to realize profits.
However, a decision that fits the flow of the chart and your strategy is the best choice.
----------------------------------------
(USOIL 1D chart)
We have to see if we can get support at 45.76 and break above 49.17.
If it falls, we need to make sure it is supported at 42.76.
If it doesn't fall below the uptrend line (2), I think the decline might look better.
I think more force is needed to break above the uptrend line (1).
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You should trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they do not trade 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Daily Market Update for 12/7Trend lines drawn from the 10/30 bottom (26d), 12/1 (5d), and today 12/7 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Monday, December 7, 2020
Run for your life with me
Facts: +0.45%, Volume lower, Closing range: 78%, Body: 78%
Good: Higher high, higher low, closing range
Bad: Lower volume
Highs/Lows: Higher high, Higher low
Candle: No lower wick, small upper wick, green body
Advance/Decline: 0.91, slightly more declining stocks then advancing stocks
Sectors: Communications (XLC +0.63%) and Utilities (XLU +0.56%) were the leading sectors. Energy (XLE -2.34%) was the worst performing sector.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
It was a good start to the week for the Nasdaq. The only problem, it was only the Nasdaq. The other major indexes had decidedly different days while the Nasdaq made a new all-time high. The index ended the day with a +0.45% gain on lower volume. The closing range of 78% and green body of 78% represent a day with no lower wick where the morning open was the low and the index never revisited that spot. There were two pullbacks in the afternoon that brought the index to the middle of the range, but both were bought back. The second pull back around 3:30p followed Consumer Credit data that was half of expectation. There were slightly more declining stocks than advancing stocks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
Results were not as good for the other major indexes. The S&P 500 (SPX -0.19%), Dow Jones Industrial average (DJI -0.49%), and the Russell 2000 (RUT -0.06%) all closed the day with losses. The S&P 500 chart shows a bearish harami candle. The Dow Jones Industrial shows a bearish reversal that opened at an all-time high but closed below the mid-range of the previous day. The Russell 2000 candle is an indecisive spinning top. Although the expectation for the Nasdaq chart would be sideways or higher, the rest of the indexes are not providing such a positive outlook.
Communications (XLC +0.63%) and Technology (XLK +0.29%) were in the top three sectors. The Nasdaq has many stocks who are in these sectors. The surprise sector in the top three is Utilities (XLU +0.56%), a defensive play for investors, showing a bit of nervousness. Utilities peaked in the morning as the top sector but fell back to second place behind Communications. Energy (XLE -2.34%) is back at the bottom of the sector list on heightened concerns around the pandemic and new lockdowns in California.
The VIX volatility index rose by +2.45% and broke through the upper line of a downward channel for the past three weeks. That is a trend to watch closely as an indicator of investor nervousness.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields dropped for the day and the spreads between long term and short-term bonds tightened. Yields rise when investors sell bonds and yields lower when investors buy bonds. The yields are still within an upward channel, but it is something to watch this week.
Corporate Bond yields rose slightly for the day while short term treasury bond yields dropped. The tightening spread between the two bond types shows a little hesitation of investors but is not significant yet.
The US dollar (DXY +0.10%) rose for the day. It is reversing off a low not seen since April 2018.
Silver (SILVER +1.11%) and Gold (GOLD +0.07%) are continuing to climb from early December pivots. Crude Oil (CRUDEOIL1! +0.56%) is up despite a lowered outlook for Energy on pandemic worries. Timber (WOOD -0.04%) was about even on the day. Copper (COPPER1! -0.34%) had its first decline after a seven-day run. Aluminum (ALI1! -1.26%) is forming a downward trend, pivoting off last week’s high.
The put/call ratio dropped to 0.480, still showing overly bullish sentiment. 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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Of the four big mega-caps, only Apple (AAPL +1.23%) closed the day with gains, outperforming the Nasdaq. Microsoft (MSFT -0.03%) dipped below the key moving average lines, the 21d EMA and the 50d MA. Amazon (AMZN -0.14%) closed below the two support/resistance lines. Alphabet (GOOGL -0.37%) closed with a loss but is still trading well above the moving average lines.
Just over half of mega-caps closed the day with losses. Tesla (TSLA +7.13%) closed at a new all-time high after a short pullback. Netflix (NFLX +3.51%) finally broke above its 50d MA on higher volume. Taiwan Semiconductor (TSM +2.56%) and Pfizer (PFE +2.26%) round out the top four mega-cap gains for the day. Intel (INTC -3.43%) pivoted down after nine consecutive days of gains.
If was a good day for growth stocks. Cloudflare (NET +5.96%), NIO (NIO +4.81%), Moderna (MRNA +4.59%) and Pinterest (PINS +4.46%) were some of the leading gainers for the day. Fastly (FSLY -3.65%) returned to its 50d MA after acquisition rumors yesterday sent the stock on a round trip. Coupa Software (COUP +1.82%) is up 4.34% post-market upon beating expectations on earnings. Sumo Logic (SUMO -18.10%) surprised investors by releasing its first earnings report mid-day. The stock tumbled but is now up 5% after hours.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
The EIA Short-Term Energy Outlook and API Weekly Crude Oil Stock numbers will be released tomorrow. In addition, Nonfarm Productivity and Unit Labor Costs data for Q3 will be released.
Retail stock Chewy (CHWY -0.21%) will announce earnings tomorrow after market close. MongoDb (MDB +1.02%) will be one of the few tech stocks to announce earnings.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line and longer trend line from the 10/30 bottom are pointing to a +0.23% gain.
The one-day trend line points to a small loss of 0.29%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Just looking at the Nasdaq chart, it looks like we had a very bullish Monday. But looking at the limited breadth of gainers/losers, the mix of Utilities as a defensive play and the slight drop in treasury bond yields, it’s not a surprise to see a much more bearish look on the other major index charts. And yet, the contrarian indicator put/call ratio moved even lower as investors seem bullish, possibly overly bullish to be good.
Any bad news on the pandemic, vaccines or stimulus could be a catalyst for a pullback or even correction. Watch your favorite stocks for signs of trouble, failed breakouts, or unexpected reversals off uptrends. Keep engaged as a stimulus could send the market to new heights but do have a plan if the market pulls back significantly.
Take care!
NAS100 Analysis Hi Guys. So last week was great, we broke through previous highs to make new highs and it moves with some very good momentum. However after it made new high it has been consolidating and doesn't really know what to do. Its been a great battle between the bears and bulls- a lot of long wicks everywhere stopping traders out the trades.
Im hoping to see some good stability in the market this week. Currently the market is still consolidating and we can see a triangle has been formed aswell. For the bears it is pretty simple, a break of 12442 and we can seen as come down to anywhere between 12377- 12227. If we manage to break this channel down and we get confirmation it has broken then we may see some bearish trends. As for the bulls we can see 12537 has been a very strong area of resistance however it may eventually break pushing price to 12657 - 12750
Advice for this week: Have a plan- a fool with a plan can beat a genius with no plan. It is very important to know where the market is going and be ready to execute with the correct calculated risk. To be a wealthy trader, you must learn first to love the money you have. If you have no care or love for the capital you have then you can never succeed to make more money. Protect the capital, and that capital will one day make you a millionaire!!!.
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD, USOIL - December 5Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
It started with the gap (3186.73-3198.21) rising and closed at -0.76%.
We'll have to see if we can quickly ascend above 3176.40 points.
It remains to be seen if the volatility around December 8th causes any movement outside the 3104.0-3176.40 range.
If you touch the 3008.91 point, there may be further declines, so you need to trade carefully.
--------------------------
(DJI 1D chart)
It started with the gap (29969.5-29989.6) rising and closed at 0.83%.
--------------------------
(IXIC 1D chart)
It started with the gap (12377.2-12399.3) rising and closed at 0.70%.
---------------------------
(SPX 1D chart)
It started with the gap (3666.7-3670.9) rising and closed at 0.88%.
---------------------------------
(XAUUSD 1D chart)
An attempt to break above the downtrend line (5)-(6) is expected if it rises to the 1855.500-1871.828 range and gains support.
If you fall at the uptrend line (4), you can touch the 1803.382 point, so you need to trade carefully.
----------------------------------
(USOIL 1D chart)
We'll see if we can get support at 45.76 and climb above 49.17.
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You should trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they do not trade 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Market Week In Review - 11/30/2020 - 12/4/2020The Market Week in Review is my weekend homework where I look over what happened in the previous week and what might come in the next week. It helps me evaluate my observations, recognize new data points, and create a plan for possible scenarios in the future.
I am making some changes to the chart presentation and renaming the series to reflect the other data points I'm 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.
If you find this helpful, please let me know in the comments. I am also more than happy to add new perspectives and data points if you have ideas.
The structure is the following:
A recap of the daily updates that I do here on TradingView.
The Meaning of Life, a view on the past week
What's coming in the next week
The Bullish View, The Bearish View
Key index levels to watch out for
Wrap-up
If you have been following my daily updates, you can skip down to the “The Meaning of Life”. If not, then this first part is a great play-by-play recap for the week. Click the original charts for more detail each day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, November 30, 2020
Takin’ everythin’ in my stride
Facts: -0.06% lower, Volume higher, Closing range: 79%, Body: 12%
Good: Long lower shadow, filled gap but held support at 12,000
Bad: Dip in morning after a new all-time high
Highs/Lows: Higher high, Lower low
Candle: Outside day, 12% red body with long lower wick.
Advance/Decline: 0.58, about three declining for every advancing stock
Sectors: Technology (XLK +0.67%) and Health (XLV +0.27) were the only gaining sectors. Energy (XLE -5.53%) was the worst preforming.
Expectation: Higher
Gap filled. 12,000 support held. New Intraday all-time high. The Nasdaq held a volatile session today that started with a new all-time high in the morning, but quickly turned down to fill the gap from Friday’s open and test the 12,000 support area. The good news is that it successfully held the support and closed not too far from the day’s highs. The bad news is it caused a lot of churn in many portfolios as there were 3 declining stocks for every 2 advancing stocks. The index closed with a small -0.06% loss, a sideways move that is not unexpected after last weeks gains. The closing range is 79% with a 12% body and a long lower wick that shows the bears ruled the morning, but the bulls saved the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, December 1, 2020
I was shaking at the knees
Facts: +1.28% higher, Volume lower, Closing range: 64%, Body: 29%
Good: New all-time high, afternoon dip stayed in upper half of range
Bad: Gap up with lower volume
Highs/Lows: Higher high, Higher low
Candle: Spinning top, longer upper/lower wicks than body.
Advance/Decline: 0.88, more declining stocks than advancing stocks
Sectors: Communications (XLC +1.83%) and Financials (XLF +1.54%) top. Industrials (XLI -0.25%) only losing sector.
Expectation: Sideways
The Nasdaq opened the first session of December on a gap up and further strengthened during the morning on news that a bi-partisan group of senators put a fresh stimulus plan back on the table for negotiation. The gains took the index to a new all-time high before reversing course in the afternoon and closing in the middle of the trading range. The Nasdaq closed with a +1.28% gain on lower volume. The closing range was at 64% with a 29% green body. The spinning top candlestick has upper and lower wicks longer than the body, indicating indecision, which could represent some doubt on whether the new stimulus will pass through the political hoops and become real. The gains on the Nasdaq were not broad across the stocks, with more declining stocks than advancing stocks for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, December 2, 2020
Running out of chips, you got no line in an 8-bit town
Facts: -0.05% lower, Volume lower, Closing range: 93%, Body: 45%
Good: Filled the gap, but closed near the high
Bad: Did not reach yesterday's high
Highs/Lows: Lower high, Lower low
Candle: Longer lower wick similar to Mon
Advance/Decline: 1.21, more advancing stocks than declining stocks
Sectors: Energy (XLE +3.25%) and Financials (XLF +1.10%) were the leading sectors. Materials (XLB -1.28%) was the bottom sector.
Expectation: Higher
The Nasdaq started the day with a pullback, dropping more than a percentage point off Tuesday’s close. Disappointing employment data added to recent sober outlook on economic recovery. Despite that, by 10am the market made a turn for the better and had steady gains with a little back and forth in the afternoon. The index closed with a small -0.05% loss, but with a closing range of 93% and a green 45% body in the upper half of the candle. The day looks very similar to Monday with a dip in the morning led by the bears, but strength in the afternoon as the bulls came back into the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, December 3, 2020
We ain't no legend, ain't no cause
We're just livin' for today
Facts: +0.23%, Volume higher, Closing range: 25%, Body: 10%
Good: New all-time high, higher low
Bad: Closing range below 40%, sell-off before close
Highs/Lows: Higher high, Higher low
Candle: Shooting star, long upper wick, tiny body
Advance/Decline: 1.54, more advancing stocks than declining stocks
Sectors: Energy (XLE +1.05%) and Real Estate (XLRE +0.74%) were the leading sectors. Utilities (XLU -1.04%) was the bottom sector.
Expectation: Lower
The Nasdaq soared to new highs today after slightly better employment data than expected. The session was already choppy before a selloff in the afternoon caused by disappointing news about supply chain issues impacting the ability to produce vaccines. The result is a shooting star candlestick that prompts a cautious outlook for the next session. The index closed with +0.23% gain on higher volume. The closing range was 23% with a thin body of 10% at the bottom of the candlestick. There were about 3 advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, December 4, 2020
So look at me now
I'm just makin' my play
Facts: +0.70%, Volume lower, Closing range: 100%, Body: 74%
Good: Close at 100% CR with new all-time high
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: No upper wick, tiny lower wick
Advance/Decline: 2.31, more than two advancing stocks for every declining stocks
Sectors: Energy (XLE +5.45%) and Materials (XLB +2.02%) were the leading sectors. Utilities (XLU -1.00%) was the only sector with losses.
Expectation: Higher
What is a great way to end a week? Closing at the top of the trading range with a new all-time high. The Nasdaq opened and climbed throughout the morning, shrugging off bad news on employment numbers and rising on hopes for a completed stimulus bill. There was a small pullback in the afternoon but nothing could hold the index back as it climbed to a new all-time high. The index closed with a +0.70% gain on lower volume. The 100% closing range with a 74% green body represents a very bullish day. It was also broad with two advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Meaning of Life (View on the Week)
The Nasdaq gained 2.15% this week, ending the week with a 100% closing range, meaning the index closed at the high for the week. That high was also a new all-time high. The index is now up 38.17% for the year and up 87.96% from the March bottom. Weekly volume for the Nasdaq was 54% higher than the 10w average.
The S&P 500 was up +1.67% for the week and the Dow Jones Industrial was up +1.03%. The Russell 2000 closed with a +2.37% weekly gain. That is the fifth week in a row that the RUT finished with gains. It is also the fifth week in a row to outperform the other major indexes. Small-caps FTW.
The week began with a new all-time high on Monday that turned into a sell-off which tested the 12,000 area. The support held and the index recovered, closing the day with a small loss. That test proved to be a character builder for a week that would bring quite a few challenges. The first challenge started on Monday when OPEC leaders seemed to be at an impasse on oil production. That debate would take all week, not resolving until Friday morning.
Tuesday brought another rotation that produced a back-and-forth on the sector leader charts throughout the day. Mid-cap growth stocks again took the brunt of the rotation, with more money flowing to small-caps and large-caps. Nonetheless, the index had a good gain on the day. Wednesday brought another morning dip after disappointing employment data showed the recovery may be stalling. However, the index was able to recover for a small loss, following an apparent agreement between the Fed and Treasury that more stimulus was needed.
Thursday seemed to be going well. An expected gain in the index was supported by positive Initial Jobless Claims data in the morning. That sent the index to an all-time high, but then Pfizer announced supply chain issues would impact their original plans for scaling vaccine production. The index had a sharp sell-off in the afternoon but somehow was able to close with +0.23% gain. On Friday, the market was ready to shrug off any bad news and finally turn in a big gain to close the week. Ending the week at a 100% closing range with a solid gain, sets up the market for a bullish outlook for Monday.
There have been ups and downs on the Nasdaq the last five weeks, but overall, the market has been bullish. Every week has a higher high and a higher low. The average closing range for each week is at 79.8%, meaning even on down weeks, the bulls bought up any sales that the bears created. Not including the short week for Thanksgiving, the past two full weeks have seen an increase in trading volume included with the gains.
Energy (XLE) is now in its fourth week of leading the sectors list. It did not look that way at the beginning of the week when it sold off sharply amongst disagreements between OPEC members on future oil production. It rose back to the lead as those talks began getting better on Wednesday and OPEC finally had agreement on Friday.
Technology (XLK) and Health Services (XLV) nearly tied for second. They shared the lead on Tuesday. Health Services had a huge boost after the UK announced approval of the Pfizer vaccine. Both Health Services and Technology did not move much after the progress on Tuesday, but it was enough to keep them in position for a solid tying 2nd place ending.
Communications (XLC) led for two days, before being overtaken by the top three and ending the week in fourth place.
Utilities (XLU) was the loser of the week. The defensive play was not needed by investors who seemed optimistic about vaccines, stimulus talks and oil agreements. That was enough optimism to ignore the unemployment data signaling trouble for the economy.
US Treasury Bond Yields rose to their highest point since February with both the US30Y-US10Y and US10Y-US02Y spreads widening. The sell-off of bonds coincides with a drop in the US Dollar and signals two things that could be happening. First, investors are continuing to stay with riskier assets in the US equity markets since bonds will not keep up with expected inflation at the current rates. Second, global investors are moving investments to countries that are more quickly emerging from the pandemic and will have economies recover faster. Many countries in Asia have had the pandemic well under control and aggressive lock downs in European countries have now resulted in better recovery data than the US.
The U.S. Dollar (DXY) lost -1.19% for the week, continuing a slide that puts the dollar at its lowest level since April 2018. The weaker dollar is coming as disappointing employment data signals a slower economic recover than originally anticipated. Some weakening of the dollar is expected given current fiscal policy and a weakened dollar can bring eventual inflation that the Fed wants to see. But at some point, other countries will respond with their own fiscal policy to keep currencies from creating unbalanced competition for imports/exports.
Corporate Bond yields continue to drop (prices in the chart rise, yields drop) while short term Treasury Bond yields rose. The tightening spread (bottom chart) between the two types of bonds shows optimism on US corporations’ ability to pay back debts and survive economic challenges.
The put/call ratio (PCCE) ended the week at the low level of 0.500, showing overly bullish sentiment in the market. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment which typically proceeds a pullback in the market. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction.
Silver (SLIVER) was up +6.63% for the week and Gold (GOLD) was flat at +0.02% for the week. Crude Oil was up +1.28% as demand continues to increase from summer lows. Timber (WOOD) is still in strong demand gaining another +2.54%. Soybean Futures dropped back -2.41% from its highest point since 2016.
Apple (AAPL) and Alphabet (GOOGL) finished the week with gains. Apple broke out of a price consolidation that had progressed over the previous 12 weeks. Alphabet set a new all-time high and is leading the big four mega-caps in performance for the last eight weeks. Microsoft (MSFT) closed the week with a loss but above the 21d EMA and 50d MA lines which were tested three times during the week. Amazon (AMZN) closed the week below the two moving average lines which often act as price support or price resistance areas.
Snowflake (SNOW) which had a massive IPO in September, released its first quarterly earnings report on Wednesday after market close. It put in two days of huge gains on Thursday and Friday.
In addition to Snowflake, there were other growth stocks with huge gains after earnings this week. Zscaler (ZS) rose 26% after earnings, Crowdstrike (CRWD) was up 14%, DocuSign (DOCU) lifted 11% before falling back to a 5% gain, and Cloudera (CLDR) closed up 7% after earnings.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Week Ahead
The week will start off without much scheduled news on Monday. Tuesday will bring the EIA Short-Term Energy Outlook which provides a near-term perspective on energy markets. On Wednesday, Job Openings data will be shared that could shed some more light on employment outlook. Crude Oil Inventories will also be released. Initial Jobless Claims comes on Thursday.
Two key price indexes will be released on Thursday and Friday. The consumer price index will provide a view on purchasing trends and inflation. The producer price index will give a better indication of how prices are moving and whether higher prices for producers will be passed on to consumers and result in inflation.
Interesting earnings reports for next week include Cintas Corp (CTAS) on Monday. Fedex (FDX) results will be watched, but guidance on Q4 could have some signals in it about how the retail holiday season is going. Carnival (CCL) will report on Friday. Carnival has steadily gained in value since the vaccine was announced. Also, Nike (NKE) will report on Friday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bullish Side
The most bullish sign for the market right now is the progress of a bi-partisan stimulus bill that seems to be moving along smoothly. The new bill comes after a multiple-day testimony from the Fed’s Jerome Powell to congress. Also, the Treasury’s Steven Mnuchin agreed with Powell’s recommendations, a reversal from the disagreement they had weeks earlier. Continued QE from the Fed and additional stimulus will give a boost to the market.
The last five weeks show a strong uptrend with the bulls in control. Any sales in equities were quickly met with purchasing by bulls. Even this past week, Monday and Wednesday began with morning dips that were bought back up by the afternoon. The weekly closing range of the index is high but the gains have not been so super-charged to cause worry.
The dollar is continuing to slide. There must be a point where this hurts more than it helps. However, in the short-term a weaker dollar can be in favor for US-based multinational companies. The US Dollar makes exports cheaper and more competitive in international markets. It also increases the value of foreign subsidiary revenues when the revenue is repatriated to the US.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bearish Side
Employment data this week continued to be bleak, a result of more lockdowns and further impact on companies that cannot afford to keep staff on the payroll. This is causing investors to look at the foreign currencies and markets of countries whose economies will more quickly recover from the pandemic. This seems to be isolated to liquidation of US bonds and currencies, but it may extend to the equity markets at some point.
The Put/Call ratio is a contrarian indicator that shows overly bullish or overly bearish sentiment. It typically will be at the extreme bullish side before a market pullback, or the extreme bearish side before a market rally. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction. The indicator is currently at 0.500. This is also confirmed by the CNN Fear & Greed contrarian indicator which shows an extremely high greed rating of 89.
The US Dollar is still well-above lows from 2018 and earlier lows from 2004-2014. However, the continued slide could indicate investors are nervous about the US economy and want to exchange US Dollar investments for other foreign currencies. That bearish sentiment can extend to other US markets.
The markets may continue to go up, despite several signals of fragility. But that fragility could come to a test with any bad news over the next few weeks. Bad news could be vaccine delays, new lockdowns, US-China tensions, or the failure of congress to pass a new stimulus bill. Right now, the markets are looking to the future, but the wrong news may bring investors focus quickly to the short-term.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Key Nasdaq Levels to Watch
There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side:
Look for the Nasdaq to keep near or above the all-time high set this week of 12,464.23.
The next round-number resistance could come at 12,500 or 13,000. Round-number resistance is caused by traders’ tendency to put in sell orders at round numbers.
On the downside, there are several key levels to raise caution flags:
There was some resistance/support visible in intraday trading around the 12,250 area. That has been noted on the chart. If there is a pullback, hopefully the index stays above that area.
The 21d EMA is at 12,006.42. The index has closed above this moving average line for 22 trading days.
November support area is at 12,000 and a round-number point. A move back to this line would be a 4% loss and it is critical the index stay above it to keep the rally going.
The 50d MA is at 11,625.88.
The low of Thursday, Nov 4 is at 11,394.21. There is a gap to fill below that line.
September Support line is at 11,300. Dropping to this level would be a sure sign of correction.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The market has had a strong five-week rally from the 10/30 bottom, but it has not been an easy journey. The path has been full of rotations often caused by unexpected news around vaccines, politics, or the oil industry. For investors, it’s been a time of searching for new leading sectors and new market leaders that stick. It is not easy to find them.
As we get closer to the holidays, the economic factors are beginning to evolve. The US Dollar is sliding at an accelerating rate. We are learning more about president-elect Biden’s pick for key positions in leadership for the economy. That is giving hints to what fiscal policies may be put in place. And we can see the light at the end of the tunnel for the pandemic, but that means companies who performed well during the pandemic are changing guidance for future quarters.
Nonetheless, we must follow price or miss out on growth opportunities. It is important to have a risk management plan in place. If the market changes course, know what you will do, whether sell or hold, for each of the investments in your portfolio.
Good luck, stay healthy and trade safe!
Daily Market Update for 12/4Trend lines drawn from the 10/30 bottom (25d), 11/30 (5d), and today 12/3 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Friday, December 4, 2020
So look at me now
I'm just makin' my play
Facts: +0.70%, Volume lower, Closing range: 100%, Body: 74%
Good: Close at 100% CR with new all-time high
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: No upper wick, tiny lower wick
Advance/Decline: 2.31, more than two advancing stocks for every declining stocks
Sectors: Energy (XLE +5.45%) and Materials (XLB +2.02%) were the leading sectors. Utilities (XLU -1.00%) was the only sector with losses.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
What is a great way to end a week? Closing at the top of the trading range with a new all-time high. The Nasdaq opened and climbed throughout the morning, shrugging off bad news on employment numbers and rising on hopes for a completed stimulus bill. There was a small pullback in the afternoon but nothing could hold the index back as it climbed to a new all-time high. The index closed with a +0.70% gain on lower volume. The 100% closing range with a 74% green body represents a very bullish day. It was also broad with two advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The Russell 2000 (RUT +2.37%) had the best showing of the day while the S&P 500 (+0.88%) and Dow Jones Industrial (DJI +0.83%) also had very bullish days. All three of these indexes have candles with 100% body, no upper or lower wicks.
Energy (XLE +5.45%) soared on news that OPEC finally came to an agreement on oil production after many days of discussion. Materials (XLB +2.02%) was the next highest performing sector for the day. All sectors except Utilities (XLU -1.00%) had gains for the day. XLU tends to be a defensive play for investors and it did see a slight uptick at the end of the day as money moved into the safer bet for the weekend.
The VIX volatility index dropped by -2.30%, reversing a previous three-day climb. Yesterday, it had touched the top line of a downward channel that is nearly three weeks long.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields rose for the day and the US30Y-US10Y and US10Y-US02Y spreads both widened. Yields rise when investors exit bonds, signaling optimism for riskier markets.
Corporate Bond yields dropped while short term treasury bond yields rose for another day. The tightening spread between these bond types show investors are comfortable with corporations being able to survive any economic challenges and pay back debts in the future.
The US dollar (DXY +0.13%) rose for the day. It is currently at a level not seen since April 2018.
Silver (SILVER +0.65%) rose while Gold (GOLD -0.11%) fell back for the day. Crude Oil Futures (CRUDEOIL1! +0.77%) rose for the day, putting in three consecutive days of gains. Timber (WOOD +1.33%) rose for the day. Aluminum (ALI1! +0.98%) rebounded from yesterdays loss.
The put/call ratio remained at 0.500, still showing overly bullish sentiment. 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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The big four mega-caps underperformed the market for the day with Microsoft (MSFT +0.6%) and Alphabet (+0.11%) ending the day with modest gains. Apple (AAPL -0.56%) and Amazon (AMZN -0.76%) ended the day with losses. Microsoft dropped below its 21d EMA to test the 50d MA once again but recovered and closed above the 21d EMA. Amazon closed below both key moving average lines that typically show support or resistance on price movement. Apple and Google are trading well above these lines.
Most mega-caps ended the day with gains. Taiwan Semiconductor (TSM +4.25%) was the top performing mega-cap with Mastercard (MA +2.75%) and Visa (+2.23%) following behind in 2nd and 3rd place. Salesforce (CRM +2.21%) is attempting a recovery from losses earlier in the week after their earnings release.
Popular growth stocks had a mixed day with top gainers offsetting those with losses. PagerDuty (PD +26.21%) had a huge gain after an earnings beat. Snowflake (SNOW +14.07%) put in another huge gain after yesterday’s 16% gain. DocuSign (DOCU +5.29%) and Cloudera (+7.17%) also had gains for the day after their earnings and outlook topped analyst expectations. Marvell (MRVL -4.70%) disappointed investors with their earnings release.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
There are no major economic news events scheduled for Monday.
Coupa Software (COUP -0.32%) will announce earnings after market close.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line is pointing to a +070% gain. The one-day trend line and longer trend line from the 10/30 bottom are both pointing to a +0.22% gain.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The market did not seem concerned with the declining pace of new jobs being added to the market, although it was all over the headlines. Perhaps it is the confidence that a stimulus will soon be here to help with unemployment. Or it could be the OPEC agreement and boost to Energy had a momentum impact on the other sectors. Or it could just be the market being the market.
Have a great weekend and take care!
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD, USOIL - December 4Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
We have to see if we can get support at 3176.40.
If you go down at 3176.40, you can touch 3104.0 or less, so you need to trade carefully.
It is expected that an attempt will be made to break through the downtrend line (2)-(3), and if the breakthrough fails, there is a possibility of falling below the 3008.91 point.
In order to attempt to break through the downtrend line (2)-(3), we need to make sure we are getting support at 3176.40.
-----------------------------
(DJI 1D chart)
It started with an increase in the gap (29883.8-29920.8) and closed at 0.29%.
-----------------------------
(IXIC 1D chart)
It started with the gap (12349.4-12369.3) rising and closed at 0.23%.
-----------------------------
(SPX 1D chart)
It started with the gap (3669.0-2668.3) falling and closed at -0.06%.
----------------------------
(XAUUSD 1D chart)
We have to see if we can ascend above 1855.500 points.
You may find resistance and decline in the 1855.500-1871.828 range, so you need to see how you are gaining support.
------------------------------------
(USOIL 1D chart)
We'll see if we can get support at 45.76 and climb above 49.17.
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You should trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they do not trade 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Daily Market Update for 12/3Trend lines drawn from the 10/30 bottom (24d), 11/26 (5d), and today 12/3 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Thursday, December 3, 2020
We ain't no legend, ain't no cause
We're just livin' for today
Facts: +0.23%, Volume higher, Closing range: 25%, Body: 10%
Good: New all-time high, higher low
Bad: Closing range below 40%, sell-off before close
Highs/Lows: Higher high, Higher low
Candle: Shooting star, long upper wick, tiny body
Advance/Decline: 1.54, more advancing stocks than declining stocks
Sectors: Energy (XLE +1.05%) and Real Estate (XLRE +0.74%) were the leading sectors. Utilities (XLU -1.04%) was the bottom sector.
Expectation: Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Nasdaq soared to new highs today after slightly better employment data than expected. The session was already choppy before a selloff in the afternoon caused by disappointing news about supply chain issues impacting the ability to produce vaccines. The result is a shooting star candlestick that prompts a cautious outlook for the next session. The index closed with +0.23% gain on higher volume. The closing range was 23% with a thin body of 10% at the bottom of the candlestick. There were about 3 advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The Dow Jones Industrial (DJI +0.29%) and Russell 2000 (RUT +0.58%) both outperformed the Nasdaq. The S&P 500 (SPX -0.06%) ended the day with losses.
Energy (XLE +1.05%) was the leading sector with Real Estate (XLRE +0.74%) coming in second. Utilities (XLU -1.04%) was the worst performing sector of the day. Technology (XLK -0.06%) finished even with the S&P 500.
The VIX volatility index rose for the third day in a row ending the day with a +0.52% gain. It is still on a downward trending channel.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields fell for the day while the spreads tightened slightly.
Corporate Bond yields dropped while short term treasury bond yields rose for another day. Investors continue moving to riskier assets signaling at least some confidence in the economic recovery.
The US dollar (DXY -0.44%) continues to slide. It is currently at a level not seen since April 2018.
Silver (SILVER -0.26%) fell back while Gold (GOLD +0.57%) gained for the day. Crude Oil Futures (CRUDEOIL1! +0.77%) rose for a second day. Timber (WOOD +0.27%) rose for the day. Aluminum (ALI1! -1.69%) fell back from recent gains.
The put/call ratio dropped to 0.500, and still showing overly bullish sentiment. 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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Each of the big four mega-caps were showing gains intraday but closed the day with losses. Apple (AAPL -0.11%) and Alphabet (GOOGL -0.17%) are trading well-above their key 21d EMA and 50d MA lines. Microsoft (MSFT -0.52%) and Amazon (AMZN -0.52%) ended with equal losses. Microsoft tested its 21d EMA but found support. Amazon tested its 50d MA and found support. Other mega-caps were about split on gainers and losers. Tesla (TSLA +4.32%) was the top mega-cap performer of the day as it approaches the date to be added to the S&P500. Intel (INTC +2.18%) has had a continuous gains over the last eight days.
Growth stocks had a great day after several companies exceed expectations on earnings announcements yesterday. Zscaler (ZS +26.45%), CrowdStrike (CRWD +13.64%), ESTC (ESTC +12.59%), and Snowflake (+16.13%) all soared today following their announcements. Splunk (SPLK -23.25%) had the opposite reaction after incurring a loss in quarterly earnings.
Cloudera (CLDR +3.39%) and DocuSign (DOCU +6.11%) released earnings after market close and are up 8% and 3% in afterhours trading, respectively. Marvell (MRVL -0.22%) is down 6% after hours on a disappointing outlook in their earnings report.
Waddell & Reed (WDR +50.44%) had a huge gain after Macquarie (MIC -0.12%) announced they will acquire the wealth management company. Michaels (MIK +20.29%) retailer rose on strong earnings. Insurance company Lemonade (LMND +20.23%) popped after getting a recommend from Tom Gardner of The Motley Fool.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tomorrow will bring more employment data including average hourly earnings, nonfarm payrolls and the unemployment rate. Analysts are expecting the change in nonfarm payrolls for November to continue downward but at a lower rate. As a result, the Unemployment Rate would be slightly better. A negative expectation breaker could further slide the US Dollar.
Big Lots (BIG +0.76%) will announce earnings before market open.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line is pointing to a +0.93% while the one-day trend line is pointing to a +0.22% gain. The longer trend line from the 10/30 bottom splits the two possibilities.
Although the trendlines point to gains, the bearish end to the day today indicates the possibility of a further loss tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The day started with positive news that Initial Jobless Claims were less than expected, a good sign for a recovering economy. That trend needs to be supported by more progress toward vaccine availability to end the pandemic restrictions and lockdowns. When Pfizer announced supply chain issues in producing the vaccine, it had an immediate reaction from the market in late afternoon trading. Now that the market is closed, the news can be absorbed, and we can hope for a reduced concern as the market opens tomorrow.
Take care!
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD - December 3Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
It started with the gap (3220.08-3221.65) rising and closed at -0.51%.
If you fail to break above the downtrend line (2) and fall below the 3176.40 point, it is a short-term stop loss.
If the CCI-RC indicator does not show that the CCI line breaks above the EMA line, it is expected to fall eventually.
Accordingly, I think it is good to set Stop Loss to preserve profit and loss.
----------------------------
(DJI 1D chart)
It started with a decline in the gap (29823.9-29695.1) and closed at 0.20%.
It remains to be seen if the index can be maintained above the 29467.9 point.
----------------------------
(IXIC 1D chart)
It started with the gap (12355.1-12285.7) falling and closed at -0.05%.
--------------------------------
(SPX 1D chart)
It started with a drop in the gap (3662.5-3653.8) and closed at 0.18%.
---------------------------------
(XAUUSD 1D chart)
It remains to be seen if it can rise along the uptrend line (4) and rise above the 1855.500 point.
------------------------------------
(USOIL 1D chart)
It remains to be seen if the volatility around December 7th will cause any movement outside the 42.76-49.17 range.
If you don't climb above 45.76 points, you're expected to eventually touch below 42.76 points.
If it rises above the 49.17 point, an attempt is expected to break above the downtrend line (1).
-------------------------------------
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You must trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they do not trade 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Daily Market Update for 12/2Trend lines drawn from the 10/30 bottom (23d), 11/25 (5d), and today 12/2 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Wednesday, December 2, 2020
Running out of chips, you got no line in an 8-bit town
Facts: -0.05% lower, Volume lower, Closing range: 93%, Body: 45%
Good: Filled the gap, but closed near the high
Bad: Did not reach yesterday's high
Highs/Lows: Lower high, Lower low
Candle: Longer lower wick similar to Wed
Advance/Decline: 1.21, more advancing stocks than declining stocks
Sectors: Energy (XLE +3.25%) and Financials (XLF +1.10%) were the leading sectors. Materials (XLB -1.28%) was the bottom sector.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Nasdaq started the day with a pullback, dropping more than a percentage point off Tuesday’s close. Disappointing employment data added to recent sober outlook on economic recovery. Despite that, by 10am the market made a turn for the better and had steady gains with a little back and forth in the afternoon. The index closed with a small -0.05% loss, but with a closing range of 93% and a green 45% body in the upper half of the candle. The day looks very similar to Monday with a dip in the morning led by the bears, but strength in the afternoon as the bulls came back into the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
All the major indexes ended the day with gains. The S&P 500 (SPX +1.13%) finished with gains just behind the Nasdaq. The gains for the Dow Jones Industrial average (DJI +0.63%) and Russell 2000 (RUT +0.89%) were not as high. The DJI closed in the lower part of the trading range.
There was much more focus between the sectors than yesterday with Energy (XLE +3.25%) leading for the day. Financials (XLF +1.10%) and Communications (XLC +0.93%) were the next two sectors. Energy and Financials leading has been the theme of the past few weeks. Materials (XLB -1.28%) was the worst performing sector of the day. Technology (XLK -0.15%) started the morning as the worst sector, but recovered and ended the day just underperforming the SPX index.
The VIX volatility index rose slightly by +1.93%. It is still on a downward trending channel.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields rose for the second day and spreads widened slightly again.
Corporate Bond yields dropped for the day while short term treasury bond yields rose. The tightening spread shows investors moving to riskier assets signaling some confidence in the economy.
The US dollar (DXY -0.1%) continues to slide. It is currently at a level not seen since April 2018.
Silver (SILVER +0.50%) and Gold (GOLD +0.83%) gained for a second day in a row. Crude Oil Futures (CRUDEOIL1! +2.19%) rose on news that a vaccine has been approved in the UK. Timber (WOOD -0.98%) pulled back a bit from yesterday’s gain. Aluminum (ALI1! +0.28%) continued to climb higher.
The put/call ratio rose slightly to 0.514, but still showing overly bullish optimism. 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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (APPL +0.29%) and Alphabet (GOOGL +1.65%) both had gains for the day and are showing momentum. Microsoft (MSFT -0.39%) dipped below the 21d EMA to test the 50d MA but closed above both lines with a loss for the day. Amazon (AMZN -0.51%) also tested its 50d MA and then was bought back to close well above the line. Those tests are uncomfortable but show bullish support as investors buy the dip at a commonly used indicator value. Most mega-caps ended the day with gains. Pfizer (PFE +3.53%) got a boost from the vaccine approval in the UK. Walt Disney (DIS +2.79%) continued its recent climb while JP Morgan Chase (JPM +1.92%) and United Health Group (UNH +1.87%) round out the top performing mega-caps for the day.
Growth stocks had a mixed day. SNAP (SNAP +6.72%) and NIO (NIO +5.78%) had significant gains. Crowdstrike (CRWD -3.84%) and ZScaler (ZS -3.22%) both dipped heading into earnings but are up 12% after hours with an expectation beat. Snowflake (SNOW -4.24%) disappointed investors with a net loss higher than expected by analysts.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tomorrow will bring more employment data with the Initial Jobless Claims. The news is not expected to be great but a surprise in one direction or another would impact the US Dollar.
Non-manufacturing Purchasing Managers Index data for November will be released and show whether non-manufacturing sectors are expanding or contracting. Expectation is for a 56. Anything over 50 is expanding. A surprise higher value would be a positive sign.
A few notable earnings releases tomorrow include Ollie’s Bargain Outlet (OLLI -1.75%), Kroger (KR -2.18%) and Lands End (LE +1.46%), and Dollar General (DG -1.05%) are among retail companies reporting. Cloudera (CLDR -1.15%), DocuSign (DOCU +0.92%), Marvell (MRVL -2.19%) and PagerDuty (PD -1.44%) are some of the tech growth stocks reporting.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
All the trend lines are pointing to positive gains for tomorrow. There is a range from +0.28% for the long-term trend line from the 10/30 bottom to +1.01% for the five-day trend line.
There may be a support/resistance area forming at the 12,230 area. It acted as resistance on Friday and Monday, and then was tested as support in this mornings trading.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Yesterday, I set an expectation for a “sideways” move today. Don’t consider it a prediction that I got right, since predictions are more often wrong. The point is to have an expectation that when confirmed, it can tell us the market is acting normally (or at least what I view as normal).
I have an expectation for "higher" tomorrow. It is also not a prediction. The market will do whatever it decides to do. But if the market does not move higher, it could be a cause for concern, especially with the contrarian indicators at concerning levels. Assuming a support area at 12,230 is forming I would want to see that hold. I also would want to see the momentum of the big four mega-caps continue upwards, and that would almost certainly draw up the indexes. That seems very possible as the US Dollar weakens and benefits those large multi-nationals.
Jerome Powell finished is comments in front of congress today and asked for more stimulus for the economy. And unlike a few weeks ago, the Treasury’s Steven Mnuchin agrees. That’s good news for continued liquidity in the market. The only question then becomes where the liquidity goes, which cap sectors, which industrial groups, which market leaders.
Take care!
Daily Market Update for 12/1Trend lines drawn from the 10/30 bottom (22d), 11/24 (5d), and today 11/30 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Tuesday, December 1, 2020
I was shaking at the knees
Facts: +1.28% higher, Volume lower, Closing range: 64%, Body: 29%
Good: New all-time high, afternoon dip stayed in upper half of range
Bad: Gap up with lower volume
Highs/Lows: Higher high, Higher low
Candle: Spinning top, longer upper/lower wicks than body.
Advance/Decline: 0.88, more declining stocks than advancing stocks
Sectors: Communications (XLC +1.83%) and Financials (XLF +1.54%) top. Industrials (XLI -0.25%) only losing sector.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Nasdaq opened the first session of December on a gap up and further strengthened during the morning on news that a bi-partisan group of senators put a fresh stimulus plan back on the table for negotiation. The gains took the index to a new all-time high before reversing course in the afternoon and closing in the middle of the trading range. The Nasdaq closed with a +1.28% gain on lower volume. The closing range was at 64% with a 29% green body. The spinning top candlestick has upper and lower wicks longer than the body, indicating indecision, which could represent some doubt on whether the new stimulus will pass through the political hoops and become real. The gains on the Nasdaq were not broad across the stocks, with more declining stocks than advancing stocks for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
All the major indexes ended the day with gains. The S&P 500 (SPX +1.13%) finished with gains just behind the Nasdaq. The gains for the Dow Jones Industrial average (DJI +0.63%) and Russell 2000 (RUT +0.89%) were not as high. The DJI closed in the lower part of the trading range.
There was some churn in the sectors throughout the day. Communications (XLC +1.83%) ended the day with the highest gains, followed by Financials (XLF +1.54%). Energy (XLE +0.46%) led the morning with a 3% gain but lost those gains after OPEC struggled to reach a consensus on production. Healthcare (XLV +0.84%) also started the day with gains but faded before the morning was over. The only losing sector for the day was Industrials (XLI -0.25%). Even Industrials did well in the morning before manufacturers purchasing data came in less than expected, signaling less future demand for the sector.
The VIX volatility index rose slightly by +0.97%, but is still in a downward trend.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields spiked on the stimulus news. US30Y-US10Y spread widened slightly while the US10Y-US02Y spreads widened by 11%.
Corporate Bond yields also rose for the day but not as must as Treasury bonds, tightening the spread between the two groups.
The US dollar (DXY -0.75%) had a sharp decline after the stimulus news.
Silver (SILVER +5.96%) and Gold (GOLD +2.14%) pivoted off yesterday’s low to make solid gains. Crude Oil Futures (CRUDEOIL1! -1.16%) continued to slide on indecision from OPEC. Timber (WOOD +2.85%) got a huge boost from the stimulus news. Aluminum (ALI1! +1.13%) is on the rise again after moving sideways for a few weeks.
The put/call ratio dipped to 0.508 showing overly bullish optimism. 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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All the big four mega-caps outperformed the index today. Apple (AAPL +3.08%) had the largest gain of the four as its breaking out of a consolidation pattern. Microsoft (MSFT +1.00%), Amazon (AMZN +1.64%), and Alphabet (GOOGL +2.33%) are all trading in an area of support above their 21d EMA and 50d MA lines. Apple, Microsoft, and Amazon all have overhead supply to clear that may provide resistance for more gains. Most mega-caps had gains on the day. Taiwan Semiconductor (TSM +3.96%) led semiconductors higher while Facebook (FB +3.46%) contributed to the Communications sector’s lead for the day.
Growth stocks did not benefit from the stimulus news and many had losses on the day. Zoom Video (ZM -15.06%) dropped back significantly after earnings. Although it beat expectations, outlook for customer churn after the pandemic caused some investor panic. NIO (NIO -10.23%) and Moderna (MRNA +7.68%) both gave up morning gains to finish the day with big losses. Docusign (DOCU -5.34%), Fastly (FSLY -3.62%), Datadog (DDOG -3.26%), Peloton (PTON -3.71%) and other pandemic growth stocks all seemed to be dragged down after Zoom Video’s earnings call.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Federal Reserve Chair Jerome Powell will continue his testimony in front of congress tomorrow. Updates on Nonfarm Employment Changes and Crude Oil Inventories will be released.
Several growth companies will release earnings tomorrow. Snowflake (SNOW ) will release its first earnings report after going public earlier this year. Crowdstrike (CRWD -3.77%), SPLK (SPLUNK +1.10%), ZScaler (ZS -2.61%), Okta (OKTA -3.29%) will also report after market close.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The one-day trend line and the five-day trend line both point to a +0.74% gain. That would be another all-time high and provide a positive signal after today’s indecisive day. Go bulls!
Or will it be the bears? The longer trend line from the 10/30 bottom points to a -0.30% loss. Not a huge loss and would likely involve filling today’s gap before regaining support.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The target keeps moving. Last Wednesday, there was a rotation out of mid-caps (especially popular growth stocks) to small and larger caps. That happened again today but not quite as severe. The stimulus, the weakening dollar, the end of the pandemic has investors searching for the next themes for their portfolios.
Many mid-caps will continue to grow after the pandemic but will not see the same levels of earnings acceleration in comparison to 2020. Multinational large cap and mega cap will benefit from the weakening dollar. Small caps look to grow after being impacted by the pandemic economy.
For now, we know investors are not looking outside the equity markets, except for possibly some commodities. Bond yields are too low and the weakening US dollar make them an even worse safe haven. Stimulus continues to offer liquidity in the markets. So, we can have some confidence in the markets continued strength, albeit their could be pullbacks. Look for news from the fed on continued stimulus since there is some disagreement on that today. Also watch out for positive/negative news on the new stimulus.
Take care!
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD - December 2Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
It started with the gap (3168.04-3188.50) rising and closed at 1.64%.
It remains to be seen if it can break above the downtrend lines (2) and (3).
If it falls at 3104.0, it is a short-term Stop Loss.
-----------------------------
(DJI 1D chart)
It started with the gap (29638.6-29797.5) rising and closed at 0.63%.
We have to see if we can keep the index above the 29467.9 point.
-----------------------------
(IXIC 1D chart)
It started with the gap (12198.7-12313.4) rising and closed at 1.28%.
We need to see if it can rise along the uptrend line (2).
-----------------------------
(SPX 1D chart)
It started with the gap (3621.6-3645.9) rising and closed at 1.13%.
We have to see if we can climb along the ascent channel.
-----------------------------
(XAUUSD 1D chart)
We must see if we can break above the uptrend line (4) and climb along the trend line.
If your attempt to break the uptrend line (4) fails, you should see if you can get support at 1803.382.
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You should trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they are not trading 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD - December 1Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
It started with the gap (3195.34-3208.48) rising and closed at -0.85%.
We'll have to see if we can quickly ascend above 3176.40 points.
It remains to be seen if the volatility around December 4th could rise above the 3294.62 point.
Also, if you go down, you should also check if you get support at 3104.0.
------------------------------
(DJI 1D chart)
The gap (29910.4-29845.5) started lower and closed at -0.91%.
------------------------------
(IXIC 1D chart)
It started with the gap (12205.8-12224.2) rising and closed at -0.06%.
We need to see if it can rise along the uptrend line (2).
---------------------------------
(SPX 1D chart)
It started with the fall of the gap (3638.4-3634.2) and closed at -0.46%.
---------------------------------
(XAUUSD 1D chart)
You should check for any movement that deviates from the 1753.992-1803.382 section.
If it falls, you need to make sure you get support in the 1731.106-1753.992 range.
You need to trade carefully as you need to move above 1899.330 points to make a trend change.
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You should trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they do not trade 24 hours a day.
G1: closing price when closed
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Daily Market Update for 11/30Trend lines drawn from the 10/30 bottom (21d), 11/23 (5d), and today 11/30 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Monday, November 30, 2020
Takin’ everythin’ in my stride
Facts: -0.06% lower, Volume higher, Closing range: 79%, Body: 12%
Good: Long lower shadow, filled gap but held support at 12,000
Bad: Dip in morning after a new all-time high
Highs/Lows: Higher high, Lower low
Candle: Outside day, 12% red body with long lower wick.
Advance/Decline: 0.58, about three declining for every advancing stock
Sectors: Technology (XLK +0.67%) and Health (XLV +0.27) were the only gaining sectors. Energy (XLE -5.53%) was the worst preforming.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Gap filled. 12,000 support held. New Intraday all-time high. The Nasdaq held a volatile session today that started with a new all-time high in the morning, but quickly turned down to fill the gap from Friday’s open and test the 12,000 support area. The good news is that it successfully held the support and closed not too far from the day’s highs. The bad news is it caused a lot of churn in many portfolios as there were 3 declining stocks for every 2 advancing stocks. The index closed with a small -0.06% loss, a sideways move that is not unexpected after last weeks gains. The closing range is 79% with a 12% body and a long lower wick that shows the bears ruled the morning, but the bulls saved the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The S&P 500 (SPX -0.46%), Dow Jones Industrials (DJI -0.91%) both fell for the day, but it was the Russell 2000 (RUT -1.91%) that felt the most pain. The RUT ended the day with a thick red-body candle and a 15% closing range. The RUT is still above its 10d MA and was due a pullback after the incredible gains over the last three weeks.
Technology (XLK +0.67%) was the top sector of the day. Health (XLV +0.27%) led most of the day, but was passed by Technology in late afternoon trading. All other sectors had losses for the day. Energy (XLE -5.53%) fell back significantly after OPEC warned of immense challenges caused by the COVID-19 pandemic.
The VIX volatility index decreased by -1.30%, continuing a downward trend and closing at its lowest point since February.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields fell on Monday while the US30Y-US10Y and US10Y-US02Y spreads remained about the same.
Corporate Bond yields rose slightly for the day and the Corporate bonds to Treasury bonds spread remained about the same.
The US dollar (DXY +0.23%) gained back some of last week’s losses, but remains below a support area.
Silver (SILVER -0.25%) and Gold (GOLD -0.60%) continued a downward trend that started at the beginning of November. Crude Oil Futures (CRUDEOIL1! -1.13%) ended the day with losses. Timber (WOOD -0.94%) fell back just slightly.
The put/call ratio rose to 0.610 after hitting dangerous lows last week. The pullback in the market helped cool off some of the overly bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible reversal in the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL +2.11%) finally broke out above the 21d EMA and 50d MA lines, after a couple weeks of consolidation. Microsoft (MSFT -0.54%), Amazon (AMZN -0.85%) and Alphabet (GOOGL -1.83%) all had losses but are all trading at or above the key moving average lines. Microsoft had a dip below the 50d MA, but recovered and closed above both the 50d MA and the 21d EMA. Most mega-caps had losses on the day. Pfizer (PFE +2.90%), Roche Holding (RHHBF +2.17%) and Apple were the only mega-caps to close with more than 2% gains.
Growth stocks had a mix of results. Moderna (MRNA +20.24%) did not get the memo on the stock market pullback and shot up another 20%. Peloton (PTON +6.76%), Datadog (DDOG +2.59%) and Zoom Video (ZM +1.43%) were among pandemic stocks that had gains on the day. Zoom Video is down -5% after hours despite exceeding expectations in their earnings release.
Chinese stock Autohome (ATHM -10.83%) was down significantly after beating expectations but missing on revenue in their earnings release before market open. Also, Chinese stocks NIO (NIO -6.43%), Alibaba (BABA -4.75%) and JD.com (JD -4.54%) also sold off significantly today. It could be related to the semi-annual MSCI rebalance which would impact passively indexed ETFs. The rebalance reduced exposure to Hong Kong stocks to make room for an upgrade of status to Kuwait and increase in India’s weight. It is not clear if that's the entire reason for the declines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
All eyes will be on Federal Reserve Chair Jerome Powell as he testifies before congress on the state of the economy, scheduled to start at 10am. Manufacturing data will also be released tomorrow giving an update on economic activity.
There are no notable earnings reports tomorrow for this daily update.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
All three trend lines point to positive gains. The one-day trend points at the same point as the long-term trend from the 10/30 bottom. That would result in a +0.50% gain. The five-day trend is pointing to a +0.99% gain. Either result would be a new all-time high.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
There were three factors that impacted stocks today. First OPEC released comments from their meeting that said there were immense challenges on the horizon, impacting crude oil prices and the energy sector. The outlook and the rising challenges with the pandemic second wave also depressed travel, transportation, and leisure stocks.
Pending New Home Sales and Chicago Purchasing Manufacture’s Index were less than expected and seemed to add to an already declining market. The declines accelerated before reversing at 10:45am on the Nasdaq.
The final factor for today was the semi-annual index review of the MSCI which upgraded Kuwait to an emerging country and added to the weight of India. It seemed to have at least some impact on Chinese stocks as money rebalanced between the markets represented.
Overall, the Nasdaq gave some signs of strength even as it closed with a loss for the day. The drop to fill the gap from last Friday did not come as a big surprise. The further dip tested the 12,000 support area and the index rose from there to get back to the top of the daily trading range. That should give some optimism for the week ahead, but further economic news is on the way, including comments from the Fed during tomorrow's Joint Economic Committee meeting.
Take care!
Market Week In Review - 11/23/2020 - 11/27/2020The Market Week in Review is my weekend homework where I look over what happened in the previous week and what might come in the next week. It helps me evaluate my observations, recognize new data points, and create a plan for possible scenarios in the future.
I am making some changes to the chart presentation and renaming the series to reflect the other data points I'm 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.
If you find this helpful, please let me know in the comments. I am also more than happy to add new perspectives and data points if you have ideas.
The structure is the following:
A recap of the daily updates that I do here on TradingView.
The Meaning of Life, a view on the past week
What's coming in the next week
The Bullish View, The Bearish View
Key index levels to watch out for
Wrap-up
If you have been following my daily updates, you can skip down to the “The Meaning of Life”. If not, then this first part is a great play-by-play recap for the week. Click the original charts for more detail each day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, November 23, 2020
Now take it in but don't look down
Facts: +0.22% higher, Volume lower, Closing range: 55%, Body: 24%
Good: Body and close in upper half of range
Bad: Lower low after morning high
Highs/Lows: Higher high, Lower low
Candle: Body and close in upper half
Advance/Decline: 1.39, more advancing than declining stocks
Sectors: Energy (XLE +7.07%) was the top. Health (XLV -0.26%) and Real Estate (XLRE -0.32%) were at the bottom.
Expectation: Sideways
The Nasdaq continued its march sideways on Monday as the other indexes had gains and the Russell 2000 closed at another all-time high. Investors remain focused on small caps, energy, and industrials as a more positive outlook on the economy is supported by additional vaccine news to end the pandemic. The Nasdaq index closed up +0.22%, but still below 12,000, a resistance level it has been testing for over a week. Volume was just slightly lower than Friday. The outside day candlestick has a 24% negative body in the upper half of the range and a closing range of 55%. There were more advancing stocks than declining stocks as small caps in the index had gains while the larger caps weighed the index down.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, November 24, 2020
It's time to begin, isn't it?
Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52%
Good: Break through 12,000 on higher volume
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Thick green body in upper half over a long lower wick
Advance/Decline: 2.10, two advancing stock for every declining stock
Sectors: Energy (XLE +5.14%) and Financials (XLF +3.50%) were top. Real Estate (XLRE -0.05%) was the only losing sector.
Expectation: Higher
The Nasdaq finally blew through the 12,000 resistance level today while the other indexes set new highs. The Dow Jones Industrial closed above 30,000 for the first time in its long history. The buying was broad with two advancing stocks for every declining stocks and included some recovery of the mega-caps after so much recent focus on small-caps. The Nasdaq closed with a +1.31% gain on higher volume. The 52% green body in the upper half of the wick resulted in a 93% closing range after the index hit a morning low and never looked back.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, November 25, 2020
You made me a believer, believer
Facts: +0.48% higher, Volume lower, Closing range: 78%, Body: 43%
Good: A new all-time high
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Short candle, with even upper and lower wicks
Advance/Decline: 0.98, about the same number of advancing and declining stocks
Sectors: Utilities (XLU +0.26%) and Real Estate (XLRE +0.24%) were the top sectors. Energy (XLE -2.33%) was the worst performing.
Expectation: Sideways
After a long period of underperforming the other major Indexes, the Nasdaq finally had a day to shine. It closed at a new all-time high while the other indexes had inside days. Volume was lower and traders focused mostly on buying the pullbacks in mid-cap growth stocks. The index closed with a +0.48% gain with a closing range of 78% and most action contained within the middle of the candle. The 43% green body is surrounded by even length upper and lower wicks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, November 27, 2020
‘Cause you’re a natural, a beating heart of stone
Facts: +0.92% higher, Volume lower, Closing range: 63%, Body: 57%
Good: Did not revisit morning lows, high closing range.
Bad: Could not keep highs, after gap up opening
Highs/Lows: Higher high, Higher low
Candle: 43% upper wick on top of solid green body. No lower wick.
Advance/Decline: 1.84, almost two advancing stocks for each declining stock
Sectors: Health (XLV +0.92%) and Communications (XLC +0.64%) were top sectors. Energy (XLE -1.17%) was the worst preforming.
Expectation: Sideways
The short trading day after Thanksgiving brought a nice gain for the Nasdaq, but on lower volume. The index gapped up in the morning and had steady gains, until mid-morning brought some selling. It finally turned back to the positive just before close. The index finished up +0.92% with a closing range of 63% and a solid green body of 57%. There was no lower wick, but the 43% upper wick shows the selling that occurred after making a new all-time high.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Meaning of Life (View on the Week)
The short week of trading ended with a +2.96% gain for the Nasdaq (IXIC), outperforming the S&P 500 (SPX +2.27) and the Dow Jones Industrial (DJI +2.21%) average. The Russell 2000 (+3.92%) is still outperforming everything as investors focus on small-caps. The major indexes set new all-time highs this week. The Nasdaq closed the week with a 92% closing range, having a positive gain every day of the week. Volume was lower than the previous week, but still higher than the 10 week moving average. That’s despite only 3.5 days of open markets.
The week began with a focus on the surprise number of travelers at airports over the weekend. That gave a boost to Travel, Transportation, and Leisure stocks as well the Energy sector. American Airlines (AAL) gained 20% in two days. Carnival Corp (CCL) gained 17% in the same period. Marriott (MAR) gained 10%. Exxon Mobile (XOM) gained 13.5%.
On Tuesday, the Consumer Confidence numbers came in less than expected but did not seem to phase the equity markets. It did impact the US Dollar which began a steady decline for the next several days. The declining value of the US Dollar was good news for the stocks of large multi-national companies. That resulted in the mega-caps having a great day and helping the Nasdaq to finally break above 12,000. Tuesday was not so friendly for mid-cap stocks, including many growth stocks. Money rotated out of mid-caps and into small, large, and mega cap stocks.
Wednesday brought more bad news with the Initial Jobless Claims climbed higher than expected. The US Dollar dropped even more, hitting lows not seen since April 2018. However, growth stocks recovered from the previous day losses and the Nasdaq recorded a new all-time high. The other major indexes fell back a bit on Wednesday, having inside days. There was some movement to the Utilities sector at the end of the day to prepare for the market holiday.
The markets were closed on Thursday and reopened Friday for a shortened trading day. As would be expected, volume in the market was lower. The Nasdaq closed at another all-time high.
Energy (XLE) finished another week of huge gains and topped the other sectors for the past three weeks. The sector is up over 40% in the last three weeks. It did pull back a bit on Wednesday and Friday after Exxon Mobile put out a more pessimistic view on future demand. Financials (XLF) also sticks out as a winner for the week, far above the rest of the sectors. The worst performing sectors were Real Estate (XLRE) and Utilities (XLU). Utilities briefly emerged as a leader for Wednesday afternoon as investors parked money in the safe haven sector for the holiday.
Technology (XLK) underperformed the S&P 500 index for a third week, which is odd in a week that the Nasdaq outperformed the S&P 500.
US Treasury Bond Yields finished the week higher than the previous week but did take a step back in Friday trading. The yield spreads for the US30Y-US20Y and US10Y-US02Y both tightened. The longer term trend is still showing investors are more interested in riskier assets than parking money in low yield bonds.
Investors did buy into Corporate Bonds this past week while short-term Treasury Bonds remained flat. The spread between these two widened, signaling optimism in the ability for businesses to pay back debts despite economic headwinds.
The put/call ratio (PCCE) ended the week at an alarming level of 0.505, showing overly bullish sentiment in the market. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment which typically proceeds a pullback in the market. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction.
The U.S. Dollar (DXY) lost -0.62% and closed the week below a support area after disappointing Consumer Confidence numbers and higher than expected Initial Jobless Claims. The weaker dollar gave a boost to large multi-national companies who can benefit from stronger performance in exports as well as more value in revenues being repatriated from foreign currencies.
Silver (SLIVER) was down -6% for the week and Gold (GOLD) was down -4% for the week, impacted by the devalued dollar. Crude Oil was up +7.51% as demand continues to increase from summer lows. Timber (WOOD) is still in strong demand gaining another +2.64%. Soybean Futures is at its highest since 2016.
Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN) finished the week with gains. Apple (AAPL) finished the week with a loss. Microsoft, Alphabet and Amazon continue to move sideways since making new highs in August. Weekly volume is still higher on down weeks than it is on up weeks. Alphabet is acting very differently than the other three, with higher volume weeks on gains and lower volume weeks as it has moved sideways the past two weeks. This could be a consolidation before another move higher. I like to keep an eye on the behavior of these four because of their significant influence over the broader indexes.
What is the impact of a weakening dollar on these four mega-caps? For Microsoft and Google, it should give them a boost given how much of their business is in software and services that will not be impacted by increased costs in imports but will benefit from improved value in repatriated revenue. Amazon could be impacted by increased costs of foreign made products, but that may be offset by higher demand for domestic products. Apple seems to be the one that would be most negatively impacted by the weakening dollar, causing the costs of products manufactured overseas to increase in cost and reduce margins.
Slack (WORK) gained almost 40% on Wednesday when Salesforce (CRM) announced they are exploring an acquisition of the popular office messaging app. That would create significant competition for Microsoft and other competitors.
Delta (DAL) had a positive week after surprisingly high travel for Thanksgiving holidays. They also announced a deal with worker unions to reduce pay in exchange for job security through 2022.
Tesla (TSLA) continues to rip upward in anticipation of being added to the S&P 500 on December 21st. The company has moved up five positions in the list of largest public companies by market cap. It is now the eighth largest company.
After two days of significant gains, Exxon Mobil (XOM) pulled back after internal documents showed a pessimistic outlook for future oil demand and prices.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Week Ahead
The week will begin with OPEC meetings that could have an impact on Crude Oil prices and the Energy sector.
Pending Home Sales data for October will be released on Monday. A disappointing result could put further downward pressure on the US Dollar.
Manufacturing data released on Tuesday will show how much purchasing is happening in over 400 industrial companies to meet future demand. Look at a positive/negative impact in XLI.
Finally, the week will end with more employment data. Expectations are for a lower Initial Jobless Claims which would be positive. But analysts expect payrolls data to decrease. A positive expectation breaker on these could give a boost to the US Dollar and signal better recovery than expected in the economy.
Growth companies including Zoom Video (ZM), Salesforce (CRM), Veeva Systems (VEEV), Crowdstrike (CRWD), ZScaler (ZS), Restoration Hardware (RH), Marvel (MRVL), DocuSign (DOCU) will announce earnings this week. Big Lots (BIG) announces earnings on Friday; look for possible signals in guidance after last week’s Black Friday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bullish Side
The fed released minutes from their most recent meeting, showing they have no intention to end supportive measures of the markets. They will continue bond purchase programs, keeping bond yields low. That will keep money flowing to equities. They will also continue asset purchase programs, providing even more liquidity to equity markets. This remains the most bullish support for the market.
All the major indexes have now cleared resistance and set new all-time highs. Without further overhead supply, demand for equities could continue driving prices higher. The longer the index can stay above this week’s highs, the more support that will be created at the current trading level, providing a pausing point if prices were to come back down. The support would provide more confidence to investors.
Energy (XLE) continues to lead the sectors. This will not last forever but is a bullish sign for a recovering economy. Energy has been the leading sector coming out of most major corrections in the market. Eventually other themes will emerge among the sector list and new market leaders will be established. In the near term, the oil companies still lag improvements in oil prices and overall increased demand. There is more upside here in the short term as sectors recover from summer lows.
A vaccine to COVID could be released in early December. It is reported that major airlines are chartering flights to transport the vaccine as quickly as possible to frontline workers and medical staff. Once the vaccine is released, this could provide more upside momentum for markets already buoyed by stimulus.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
The Bearish Side
The amount of optimism in the market right now is extremely high. The put/call ratio is nearing dangerous lows (meaning high bullish sentiment) that typically signal a correction is in order. The indicator was at 0.458 just before the September correction and it was at 0.489 just before the short October correction. It is on a downward trend at 0.505 closing this week. The CNN Fear & Greed index is at 92, the highest level since February of this year. Another contrarian index, the CNN number is usually at its highest right before corrections.
Consumer Confidence and Initial Jobless Claims data this week showed the impact of more lockdowns in the prolonged pandemic. This news could get worse this week as numbers of cases are expected to rise after the Thanksgiving holiday and hospitals become even more overwhelmed with patients. The anticipation of a vaccine could be a moment of “buy the rumor, sell the news”. When the vaccine is finally released, it could have the opposite impact after the market already priced in the eventual release over the past few weeks.
The Fed has signaled that changes in economic conditions, impacted by the pandemic, could be reason for monetary policy changes. Any reduction in support from the Fed could cause an oversized reaction from the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Key Nasdaq Levels to Watch
There are several key levels in the Nasdaq to keep an eye out for and respond accordingly. First on the positive side:
Look for the Nasdaq to keep near or above the all-time high set last week of 12,236.23.
The next round-number resistance could come at 12,500 or 13,000. Round-number resistance is caused by traders tendency to put in sell orders at round numbers.
On the downside, there are several key levels to raise caution flags:
Friday’s low of 12154.57 is above a gap that may need to be filled back to 12,114.77.
November support area is at 12,000 and a round-number point. Staying above this area is critical to continue the upward trend.
The 21d EMA is at 11790.66. The index has closed above this moving average line for 17 trading days.
The 50d MA is at 11,467.81. This line is at the October support area and about 6% below Friday’s close.
The low of Thursday, Nov 4 is at 11,394.21. There is a gap to fill below that line.
September Support line is at 11,300. Dropping to this level would be a sure sign of correction.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The market had a significant rotation again this past week. Instead of a rotation among sectors or growth vs value, it was a rotation from mid-cap stocks to small-caps and large-caps, including mega-caps. The rotation seemed to result from the weakening of the US Dollar, moving investors to larger multinationals. But investors also continued to move toward small-caps which should benefit the most from economic recovery. Mid-caps took on the damage as the money rotated away from them. As with most rotations, the pendulum swung too far and mid-caps recovered nicely on Wednesday and Friday.
Friday’s positive results are tempered by the lower volume and shorter trading day. Look for a stronger signal on Monday for market direction. Watch out for impact of “buy the rumor, sell the news” on both the vaccine as well as finalizing the election results. While staying invested to profit from market momentum, be sure to keep stop losses in play to protect from sudden changes.
Good luck, stay healthy and trade safe!
Daily Market Update for 11/27Trend lines drawn from the 10/30 bottom (20d), 11/20 (5d), and today 11/27 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Friday, November 27, 2020
‘Cause you’re a natural, a beating heart of stone
Facts: +0.92% higher, Volume lower, Closing range: 63%, Body: 57%
Good: Did not revisit morning lows, high closing range.
Bad: Could not keep highs, after gap up opening
Highs/Lows: Higher high, Higher low
Candle: 43% upper wick on top of solid green body. No lower wick.
Advance/Decline: 1.84, almost two advancing stocks for each declining stock
Sectors: Health (XLV +0.92%) and Communications (XLC +0.64%) were top sectors. Energy (XLE -1.17%) was the worst preforming.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The short trading day after Thanksgiving brought a nice gain for the Nasdaq, but on lower volume. The index gapped up in the morning and had steady gains, until mid-morning brought some selling. It finally turned back to the positive just before close. The index finished up +0.92% with a closing range of 63% and a solid green body of 57%. There was no lower wick, but the 43% upper wick shows the selling that occurred after making a new all-time high.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The S&P 500 (SPX +0.24%) ended the day with a doji candlestick where the open and close are very close to each other. The Dow Jones Industrials (DJI -0.13%) had inside days the past two days, trading within the range of Tuesday’s huge gains. The Russell 2000 (RUT +0.56%) continues to trade near all-time highs after a slight pullback on Wednesday. The patterns show a bit of indecision in the market, but also come during light trading during the holidays.
Health (XLV +0.92%) emerged as the leading sector late in the morning. Technology (XLK +0.53%), Communications (XLC +0.64%) and Materials (XLB +0.52%) all traded the top spot before Health passed them. All other sectors had losses for the day with Energy (XLE -1.17%) ending the day as the worst performing sector.
The VIX volatility index decreased by -1.93%, continuing a downward trend and closing at its lowest point since February.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields fell on Friday and the US30Y-US10Y and US10Y-US02Y spreads both tightened.
Corporate Bond yields dropped for the day and the Corporate bonds to Treasury bonds spread tightened.
The US dollar (DXY -0.22%) dropped below a support area and is at its lowest point since April, 2018.
Silver (SILVER -2.71%) and Gold (GOLD -1.14%) continued a downward trend that started at the beginning of November. Crude Oil Futures (CRUDEOIL1! +1.20%) rose for the day. Timber (WOOD +0.51%) increased for the day.
The put/call ratio dropped to 0.505 and is showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible reversal in the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four of the big mega-caps closed the day with gains. Microsoft (MSFT +0.64%), Amazon (AMZN +0.32%) and Alphabet (GOOGL +1.3%) all traded above the key 21d EMA and 50d MA lines. Apple (AAPL +0.48%) temporarily traded above the lines but pulled back to close under the 21d EMA. Only Alphabet outperformed the broader index. About half of the mega-caps in the market closed with gains. Tesla (TSLA +2.05%) turned in another day of gains. Pfizer (PFE +1.92%) also closed with significant gains, buoying the health sector results.
Growth stocks also had a good day. Moderna (MRNA +16.35%) and ETSY (ETSY +10.66%) were among the stellar breakouts. Cloudflare (NET +6.82%), Zoom Video (ZM +6.29%), Draft Kings (DKNG +5.02%) were among several other growth stocks benefiting from a positive trading day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Monday will be the first full day of trading after the holidays. An OPEC meeting is scheduled for 5:00 EST on Monday and could have some impact on Oil as well as the Energy sector. Pending Home Sales for October will also be announced in the morning. Further impact to the US Dollar could result from a miss in expectations.
Zoom Video is among a small list of companies announcing earnings after market close. Autohome (ATHM +3.98%) is a Chinese stock that will announce earnings before open.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The trend lines all point to about the same spot just around today’s all-time high. If the market continues the trend from the 10/30 bottom and the five-day trend, it will result in a +0.27% gain. The one-day trend points to just under that point for a -0.02% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The shortened day of trading resulted in some good gains on lower volume. Investors remain extremely optimistic and history says to be cautious whenever the market is overly optimistic. However, there are reasons to believe we could still see gains as the Fed continues measures to support the economy. Growth stocks will benefit from that momentum and large multi-nationals will benefit from a weakening dollar. It’s a good time be in the market to profit from the gains but keep stop losses in place to protect from potential swings to the downside.
Take care!
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD - November 26Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
The gap (3118.06-3141.87) started with a rise and ended up at 2.15%.
We'll get support at 3176.40 and see if it can move up along the uptrend line (4).
With support at 3176.40, I would expect an uptrend to break through the downtrend lines (2) and (3).
-------------------------
(DJI 1D chart)
It started with the gap (30046.2-30058.9) rising and closed at -0.58%.
----------------------------
(IXIC 1D chart)
It started with the gap (12036.8-12053.9) rising and closed at 0.48%.
----------------------------
(SPX 1D chart)
Closed at -0.16%.
------------------------------
(XAUUSD 1D chart)
It remains to be seen if it can gain support at 1803.382 and at the uptrend line (4).
We have to see if a rebound can come.
If it falls from 1803.382, it is expected to touch the 1731.106-1753.992 range.
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You must trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they are not trading 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Daily Market Update for 11/25Trend lines drawn from the 10/30 bottom (19d), 11/19 (5d), and today 11/25 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Wednesday, November 25, 2020
You made me a believer, believer
Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52%
Good: A new all-time high
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Short candle, with even upper and lower wicks
Advance/Decline: 0.98, about the same number of advancing and declining stocks
Sectors: Utilities (XLU +0.26%) and Real Estate (XLRE +0.24%) were the top sectors. Energy (XLE -2.33%) was the worst performing.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
After a long period of underperforming the other major Indexes, the Nasdaq finally had a day to shine. It closed at a new all-time high while the other indexes had inside days. Volume was lower and traders focused mostly on buying the pullbacks in mid-cap growth stocks. The index closed with a +0.48% gain with a closing range of 78% and most action contained within the middle of the candle. The 43% green body is surrounded by even length upper and lower wicks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The S&P 500 (SPX -0.16%), Dow Jones Industrials (DJI -0.58%) and Russell 2000 (RUT -0.46%) all took a step back while the Nasdaq had its day to shine. Each of the indexes that pulled back did so within the previous days range. An inside candle (the high and low is contained within the high and low of the previous day) after a strong trend is often in a continuation pattern, so I would expect these indexes to pick up with their uptrends in the next week.
Utilities (XLU +0.26%) was the top performing sector of the day, with a surge in buying in the last hour of trading. Utilities is a haven within equities and some investors wanted to park their money there during the holiday. Technology (XLK +0.21%) spent most of the day as the top sector before being passed by Utilities at the end of the day. Energy (XLE -2.33%) pulled back from massive gains over the past few weeks and ended the day as the worst performing sector. Energy is still way ahead of the other sectors on gains for the week.
The VIX volatility index decreased by -1.80%, continuing a downward trend.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
The US30Y yield increased +1.11% while the US10Y decreased by -0.55%, expanding the US30Y-US10Y spread, a long-term bullish view for the economy. The US10Y-US02Y spread contracted a bit, showing maybe a bit of bearish outook for the short term.
Corporate Bond yields gained for the day with the spread between Treasury and Corporate bonds tightening. Both indicators are still at bullish levels compared to earlier in the year.
The US dollar (DXY -0.25%) hit a new low for the year and is at its lowest point since April, 2018.
Silver (SILVER +0.43%) and Gold (GOLD +0.02%%) paused from the downward trend from the past two weeks. Crude Oil Futures (CRUDEOIL1! +2.01%) rose on positive Crude Oil Inventory news. Timber (WOOD -0.47%) pulled back from recent gains.
The put/call ratio rose to 0.521 but still showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a reversal in the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN +2.15%) closed the day with gains that brought it above its 21d EMA and 50d MA. Apple (AAPL +0.75%) also gained for the day, closing above its 50d MA. It tested the 21d EMA, but sold off after touching the line. Microsoft (MSFT +0.0%) closed even with yesterday’s close after a gap up at open turned into a test of its 21d EMA. Alphabet (GOOGL +0.01%) also closed even with yesterday after a choppy trading session. Apple and Amazon outperformed the market while Microsoft and Alphabet underperformed. PayPal (PYPL +4.11%) was the top performing mega-cap for the day while Tesla (TSLA +3.35%) continues to add to recent gains.
Growth stocks recovered nicely from yesterday’s rotation. Many of the stocks that sold off yesterday were back in the game today. ETSY (ETSY +5.44%), Pinterest (PINS +5.29%), Cloudflare (NET +4.94%) and Square (SQ +4.94%) were among the top winners. Moderna (MRNA +10.78%) closed the day with a huge gain after analysts upgraded price targets.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tomorrow is Thanksgiving and markets will be closed. Friday markets will continue trading but the trading day will end at 1pm.
There is no economic news or significant earnings announcements planned for Friday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The current set of trend lines are all pointing at positive gains for Friday. When they all land in a similar area, I typically draw attention to the longest trend line. That is the trend from the 10/30 bottom which points to a +0.87%. The five-day trend is pointing to a 0.19% gain and the one-day trend lands in the middle.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Initial Jobless Claims data released today was higher than expected, putting some caution into investors minds about the near-term economic recovery. Still investors seem confident in US corporation’s ability to weather the storm and are bullish on the mid to long-term. The pullback in the major indexes is warranted given the aggressive climb to new highs.
The fall to new lows for the US Dollar is something to keep an eye on. A bit weaker dollar can be a boon for large multi-national companies and could bring a healthy level of inflation to the US economy. However, if it continues to fall, expect some action by foreign central banks to keep currencies balanced and protect their own economies from trade impact.
Have a great Thanksgiving and Take care!
Amazon (AMZN), DJI, IXIC, SPX, XAUUSD - November 25Hello?
Dear traders, nice to meet you.
"Like" is a huge force for me.
By "following" you can always get new information quickly.
Thank you for always supporting me.
-------------------------------------------------- -----
We need to see if we can get support and climb at 3104.0.
In order to turn the trend, it must rise above 3176.40 points.
If you drop from 3104.0, you can touch 3008.91.
---------------------------
(DJI 1D chart)
The gap (29591.3-29746.1) rose to close at 1.54%.
----------------------------
(IXIC 1D chart)
It started with the gap (11880.6-11939.3) rising and closed at 1.31%.
We need to see if it can rise along the uptrend line (2).
-------------------------------
(SPX 1D chart)
It started with the gap (3577.6-3594.5) rising and closed at 1.62%.
----------------------------------
(XAUUSD 1D chart)
You need to make sure you get the support at point 1803.382.
If it falls from 1803.382, it is likely to touch the 1731.106-1753.992 section.
-------------------------------------------------- -------------------------------------------
** Check support, resistance, and abbreviation points.
** Support or resistance is based on the closing price of the 1D chart.
** All explanations are for reference only and do not guarantee profit or loss on investment.
Explanation of abbreviations displayed on the chart
R: A point or section of resistance that requires a response to preserve profits
S-L: Stop-Loss point or section
S: A point or segment that can be bought for profit generation as a support point or segment
(Short-term Stop Loss can be said to be a point where profits and losses can be preserved or additionally entered through installment trading. You must trade from a short-term investment perspective.)
GAP refers to the difference in prices that occurred when the stock market, CME and BAKKT exchanges were closed because they are not trading 24 hours a day.
G1: Closed price
G2: Market price at the time of opening
(Example) Gap (G1-G2)
Daily Market Update for 11/24Trend lines drawn from the 10/30 bottom (18d), 11/18 (5d), and today 11/24 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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=-
Tuesday, November 24, 2020
It's time to begin, isn't it?
Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52%
Good: Break through 12,000 on higher volume
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Think green body in upper half over a long lower wick
Advance/Decline: 2.10, two advancing stock for every declining stock
Sectors: Energy (XLE +5.14%) and Financials (XLF +3.50%) were top. Real Estate (XLRE -0.05%) was the only losing sector.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Nasdaq finally blew through the 12,000 resistance level today while the other indexes set new highs. The Dow Jones Industrial closed above 30,000 for the first time in its long history. The buying was broad with two advancing stocks for every declining stocks and included some recovery of the mega-caps after so much recent focus on small-caps. The Nasdaq closed with a +1.31% gain on higher volume. The 52% green body in the upper half of the wick resulted in a 93% closing range after the index hit a morning low and never looked back.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The Russell 2000 (RUT +1.94%) remains the leading index setting daily all-time highs. The Dow Jones Industrial (DJI +1.54%) closed above 30,000 for the first time in its history. The S&P 500 (SPX +1.62%) also outperformed the Nasdaq on a great day for all the indexes.
Energy (XLE +5.14%) was the top sector again on Tuesday. Financials (XLF +3.50%) also did very well. Materials (XLB +2.49%), Communications (XLC +2.05%), and Industrials (XLI +1.75%) all outpaced the S&P 500. Real Estate (XLRE -0.05%) was the only sector to have a loss for the day.
The VIX volatility index decreased by -4.50%, hitting its lowest intraday level since August.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
Both yields and spreads rose for the US 30-year and US 10-year Treasury bonds.
Corporate Bond yields fell for the day as investors are seeing more positive signs for economic recovery.
The US dollar (DXY -0.37%) fell back and is testing recent lows from August. The currency is likely being impacted by lower than expected Consumer Confidence numbers.
Silver (SILVER -1.45%) and Gold (GOLD -1.64%) continued to slide lower. Crude Oil Futures (CRUDEOIL1! +4.32%) is at its highest since August. Timber (WOOD +1.62%) also ended the day with gains.
The put/call ratio dropped to 0.505 showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a reversal in the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL +1.16%), Microsoft (MSFT +1.78%), Amazon (AMZN +0.63%) and Alphabet (GOOGL +2.10%) all had gains for the day. Apple was unable to close above the 50d MA while Microsoft broke through and closed above both the 50d MA and 21d EMA. Amazon continues to trade just below the 21d EMA as the line has been acting as resistance for the stock recently. Most mega-caps had gains for the day. Tesla (TSLA +6.43%) continued to rise on the way to being added to the S&P 500. Banc of America (BAC +5.81%) and JPMorgan Chase (JPM +4.62%) helped drive the Financials sector gains. Walt Disney (DIS +3.77%) had another day of big gains.
Growth stocks were mixed with many growth investor portfolios not benefiting from the day’s gains. Companies like Tesla and PayPal (PYPL +2.58%) had gains. Other recent favorites such as Fiverr (FVRR -2.63%), NIO (NIO -3.38%), SNAP (SNAP -2.14%), Pinterest (PINS -2.68%) had losses for the day. Rotations are common during rallies, but never fun unless your stocks are the direction of the rotation.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tomorrow is the last full day for the markets this week. Thursday the markets will be closed and Friday they will only be open until 1pm.
Wednesday will bring updates on Initial Jobless Claims which will give a view of the continuing impacts from the pandemic on employment. Core Durable Goods Orders will give a look into manufacturing activity. The monthly GDP update also comes tomorrow which could have further impact on the US Dollar.
There are only a few earnings reports tomorrow, none that are notable for the daily update.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index finally closed above the resistance area at 12,000 and I removed the long trend line from the 10/12 pivot day.
If the trend continues today, the index could meet up with the trend from the 9/30 bottom at +1.07% and set a new all-time high.
A small pull back to the 5d trend line would result in a -0.50% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The lower than expected Consumer Confidence data did not phase the markets today. In fact, the data could be a reason the US Dollar declined in value causing large global mega caps to rise in price, driving the DJI to new record levels. But that did not come at the expense of small caps with the RUT still outperforming all the other indexes.
One more full day of trading this week. Will investors rush to safe havens in Utilities (XLU) like they have the last few weekends, or hold onto assets through the holiday weekend?
Take care!
