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Daily Market Update for 1/27Trend lines drawn from the 10/30 bottom (60d), 1/21 (5d) and today 1/26 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, January 27, 2021 Facts: -2.61%, Volume higher, Closing range: 22%, Body: 63% Good: Not much, held support after closing last week's gap. Bad: Gap down, long red body with late day selling Highs/Lows: Lower high, lower low Candle: Mostly body with visible upper and lower wick Advance/Decline: 0.19, five declining stocks for each advancing stock Indexes: SPX (-2.57%), DJI (-2.05%), RUT (-1.91%), VIX (61.64%) Sectors: Real Estate (XLRE -1.28%), Energy (XLE -1.35%) were top. Communications (XLC -3.23%) was bottom. Expectation: Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Today was a little more exciting then yesterday, but not in the way we wanted. The Nasdaq opened with a gap down, chopped back and forth and then sold off after the Fed announcements. The fed will keep current monetary policy and interest rates, but said there are still a lot of headwinds for the economy. The Nasdaq closed with a -2.61% loss after testing the 21d EMA. Volume was over 60% higher than the previous day. The gap down at open along with the selling during the day resulted in a 19% closing range and a 63% red body. There were five declining stocks for every advancing stock The S&P 500 (SPX), Dow Jones Industrial (DJI) and Russell 2000 (RUT) all closed with losses. The RUT had the smallest loss at -1.91%, but still a big pullback. The VIX gained 61.64% for the day and ended with a 100% closing range. It is at the highest point since the beginning of November. All sectors lost for the day. Real Estate (XLRE -1.28%) and Energy (XLE -1.35%) were the smallest losses. Communications (XLC -3.23%) had the biggest loss. Energy was in positive territory at mid-day before the late afternoon sell-off. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.53% for the day. US 30y and 10y treasury bond yields declined for the day. US 2y treasury yields gained for the day. High Yields Corporate bond (HYG) prices declined. Silver (SILVER) and Gold (GOLD) both declined for the day. Crude Oil (CRUDEOIL1!) gained as inventory data showed a better outlook on demand than the previous week. Timber (WOOD) declined -3.59% for the day. Copper (COPPER1!) and Aluminum (ALI1!) both declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose for the day, but remained at a low level of 0.588. 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 Three of the four largest mega-caps all declined for the day. Alphabet (GOOGL) had the biggest loss at -4.67%. Apple (AAPL) had the smallest loss at -0.77%, but declined another -3.23% after hours despite beating earnings and revenue expectations. Amazon (AMZN) lost -2.81%. Microsoft (MSFT) closed the session with a +0.25% advance, but at one point was up +3.5% after pleasing investors with yesterday's earnings release. Microsoft was the only mega-cap with a gain. Netflix lost nearly all of its post-earnings gap with a -6.88% loss today. A few growth stocks still did OK today. Palantir (PLTR) ended the day with a +10.26% gain, although was much higher mid-day. Beyond Meat (BYND) added to yesterday's big gains with a +2.81% gain. Tesla (TSLA) is down -5% in post-market trading after missing earnings expectations. Facebook (FB) is down -2.07% after hours, despite beating earnings and revenue expectations. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow's economic news will include Q4 GDP data and Initial Jobless claims before market open. After the market opens, New Home Sales data for December will be released. Earnings tomorrow will include Mastercard (MA) before market open and Visa (V) after market close. Comcast (CMCSA) and McDonalds (MCD) will also announce earnings before market open. Atlassian (TEAM) will release earnings after market close. Several airlines including Southwest (LUV), American Airlines (AAL) and JetBlue (JBLU) will also release earnings tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The index moved back below the long-term trend line from the 10/30 bottom. Returning to that line would be a +2.36% gain. The five-day trend line is under that point with a +1.74%. Continuing the one-day trend points to a -1.22% loss. That would be below the 21d EMA which provided support today. In addition to the 21d EMA, the previous two week's highs around 13,200 acted as support after the index closed last week's gap up. Beyond that, 13,000 support seemed to hold up well. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a distribution day for the major indexes today. Certainly a character change in the market. The gap up from last Wednesday's open was filled and the index seemed to pause at that point. As a defense to the selling, there was some purchasing of bonds but not a huge amount. The more alarming signal is the negative after hours reactions to fairly positive earnings reports from Apple and Facebook. Some extra caution is required heading into tomorrow's session. The market can choose which direction it wants to go, and that could be a reversal off the 21d EMA for gains tomorrow. Or it could be further downside. Take a look at your portfolio and have a plan based on your trading style and risk comfort level. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
1
Daily Market Update for 1/26Trend lines drawn from the 10/30 bottom (59d), 1/20 (5d) and today 1/26 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, January 26, 2021 Facts: -0.07%, Volume lower, Closing range: 23%, Body: 56% Good: Low is well-above last week's highs Bad: Thich red body relative to rest of candle, closing range Highs/Lows: Lower high, higher low Candle: Mostly body with tiny upper and lower wicks, insider day Advance/Decline: 0.59, more declining stocks than advancing stocks Indexes: SPX (-0.15%), DJI (-0.07%), RUT (-0.62%), VIX (-0.73%) Sectors: Communications (XLC +1.36%) and Real Estate (XLRE +1.02%) were top. Materials (XLB -1.38%) and Energy (XLE -2.14%) were bottom. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Although some wild happenings continue to occur in the market, the Nasdaq composite index had a rather boring day. And that can be a good thing. Yesterday's big dip and recovery followed a week of huge growth. So a day of mostly sideways action, which held lows well above last week's highs, can be very constructive for the index. The Nasdaq ended with a -0.07% on lower volume. The closing range of 23% and 56% red body sounds bad, but is within a candle that is only 0.73% from top to bottom. Compare that to the previous days candle that had a 2.70% trading range. There were more declining stocks than advancing stocks. The S&P 500 (SPX), Dow Jones Industrial (DJI) and Russell 2000 (RUT) all closed with losses. The RUT had the biggest loss at -0.62%. The S&P 500 set a new all-time high before pulling back a bit. Communications (XLC +1.36%) and Real Estate (XLRE +1.02%) were at the top of the sector list. Consumer Staples (XLP +0.90%) and Technology (XLK +0.07%) were the only other sectors to end the day with gains. Materials (XLB -1.38%) and Energy (XLE -2.14%) were bottom. Energy was up 1.48% at open but quickly sold off to end the day in last place. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.24% for the day. US 30y treasury bond yields were flat while 10y yields rose slightly. 2y yields dropped as investors purchased the bonds. High Yields Corporate bond (HYG) prices declined. Silver (SILVER) advanced while Gold (GOLD) declined for the day. Crude Oil (CRUDEOIL1!) remained flat. Timber (WOOD) advanced for the day. Copper (COPPER1!) remained flat while Aluminum (ALI1!) advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio dropped slightly to 0.524. 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 four of the largest mega-caps ended the day with gains. Microsoft (MSFT) had the biggest gain of +1.22% and continued to advance after hours with a beat on earnings and revenue expectations. Amazon (AMZN) and Alphabet (GOOGL) had gains of +0.98% and +0.72% respectively. Apple (AAPL) had the smallest gain of the four. Johnson & Johnson (JNJ) led the mega-caps with a 2.71% gain after releasing pre-market earnings that beat expectations and gave positive guidance. Comcast (CMCSA) and AT&T (T) also had gains exceeding 2%, helping Communications to lead the sector list. Growth stocks had a mixed day. One of the big winners was Beyond Meat (BYND) which followed yesterday's 13% gain with a 17.7% gain today. The stock soared 40% after Beyond Meat revealed a partnership with Pepsi to make products from plant-based proteins. GameStop (GME) continued to…. nah, let's move on. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Core Durable Goods Orders data will be released before market open. Crude Oil Inventories will be released after market open. Today's API Weekly Crude number was lower than expected, a good sign for crude prices. The big economic news tomorrow will be from the meeting of the Federal Open Market Committee. Out of the meeting, we will hear about changes in outlook on the economy and whether the Fed plans any changes to interest rates or monetary policy. Tomorrow will be another big day for earnings releases. Apple (AAPL), Tesla (TSLA) and Facebook (FB) will all report earnings after market close. There are numerous other reports before and after the market, so be sure to check your portfolio for any companies that announce earnings tomorrow. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The five-day trend line points to a +0.68% gain. The one-day trend line points to another sideways day, slightly to the positive. The long trend line from the 10/30 bottom points to a -0.55% loss. If there is a further downside move, its notable that the index held support today above last week's highs. The low was 13,567.14, and would hopefully continue to hold support above that area. The 21d EMA is at 13,146.21 which could offer an area of support at 3.44% below today's close. 13,000 support seems to be holding up well. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The indexes are doing what would be expected after last week's gains and Monday's big swings. Pausing for a day or two and allowing enthusiasm to cool off a bit will be good for the market. However, wild moves of stocks being manipulated by large groups of retail traders continues underneath the surface. Nothing is fundamentally broken, but continue to be cautious as always. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
1
Target Nasdaq 25,000 for market topThere is a discussion that the market might be heading for a top. I have reviewed the monthly chart going back 20 years to the great big bull of the 90s, the index at the time was consistently uptrending with the the price being 80% above the 50Month MA. The market traded in a channel for years and once it broke above that channel, which became support in 1999 and in the following year topped when the price hit 210% above of the 50Month MA (5132 high vs 1645 50month MA). If history repeats itself (at the time of writing this note in January 2021) at the moment the 50 month SMA is around 6812 whilst the index however around 13,635. That means that even though the index price is trading outside of the normal channel band since July of last year, it is now possible that it will go forward to do a climax top sometime around summer target being September of this year. At the moment the index is trading at double (100%) above the 50 Month MA. However in order to become extremely overbought, it needs to continue to grind higher and consolidate sideways as it has been doing. What are the parallels of 1999. 1) In 1999 there were IPOs today there are SPACs. 2) In 1999 there was AOL today there is TSLA. 3) Top stocks were splitting and raising money with secondaries just like they do nowadays. 4) In 1999 was the era of the Internet / communications, today we have EVs and now moving to EV infrastructure and Space exploration. 5) Everyone wanted a piece of the market, Joe Public started becoming a "professional" trader and making more money than his normal income. 6) Everyone was rushing for the next big stock to buy, everyone was pumping, swings were very wild and the nasdaq was not trading in sync with the normal s&p index. All of the above and more factors convince me that history is repeating itself and that we are in for a great year. I am expecting that the 50Month MA to move up another 25% in the next few months to around 8500 and the index could peak at 250%-300% of the 50 month MA which would equate to a price of 21,300 - 25,500. Calling the Nasdaq top at 25,000 looks extremely optimistic, but at the same time frame in 1999 the market kept moving up by 80% to reach the market top. Based on today's price a move of 80% up also gives a price of 24,500 so this call although absurb is quite feasible. I am long the stocks and plan to remain long and buy stocks until the Nasdaq hits 20,000 from which then the market will become extremely volatile and will start unwinding positions and take a break. Good luck to everyone, do your own DD.
NASDAQ:IXICLong
by adrscib
1
How I Create Chart Art for my TradingView IdeasI've gotten a lot of questions on some of my trading view ideas on how do I paste images on the chart. And others compliment me on my artistic skill. The secret is that I don't paste images on the chart, but I'm also hardly an artist. I do like to take some time to create the art because it helps me tell the story of the company that I'm presenting in the idea. Here's a video that shows how I create chart art. Happy to share my secrets with the TradingView community.
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TVC:IXICEducation
by drewby4321
107
Daily Market Update for 1/25Trend lines drawn from the 10/30 bottom (58d), 1/19 (5d) and today 1/25 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, January 25, 2021 Facts: +0.69%, Volume higher, Closing range: 74%, Body: 13% Good: Stayed above the gap from last Wed, bulls fought back in afternoon Bad: Long sudden trip to the days low, volume heavy on the way down Highs/Lows: Higher high, lower low Candle: Similar to bearish doji star, but body a little thick Advance/Decline: 0.91, more declining than advancing stocks Indexes: SPX (+0.36%), DJI (-0.12%), RUT (-0.25%), VIX (+5.84%) Sectors: Utilities (XLU +2.01%) and Consumer Staples (XLP +1.00%) were top. Finance (XLF -0.73%) and Energy (XLE -1.02%) were bottom. Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview There was expectation coming into the week that it would be choppy, but we didn't expect that chop to all happen within 30 minutes. But that's how it goes sometimes. Investors were already playing defense in the opening minutes of the day, despite the index setting a new all-time high. But the bulls caught the downward action mid-morning and brought the Nasdaq back to gains in the afternoon. The Nasdaq closed with a +0.69% gain on higher volume. The closing range of 74% is typically good, but the 13% red body that is entirely above last week's bullish range is a possible reversal pattern. There were less advancing stocks than declining stocks as many stocks did not move back to positive territory after the morning sell-off. The S&P 500 (SPX +0.36%), Dow Jones Industrial (DJI -0.12%) and Russell 2000 (RUT -0.25%) all have their own candle patterns to represent the day. Each has a long lower wick, but only the RUT set a new all-time high, creating a long upper wick. The Dow Jones Industrial average is in a third day of a downward move. As investors came into the day defensive, Utilities (XLU +2.01%) and Real Estate (XLRE +0.90%) moved to the top of the sector list even before everything turned downward around 10:30. At the end of the day, Utilities and Consumer Staples (XLP +1.00%) were at the top, with Real Estate at the bottom. Finance (XLF -0.73%) and Energy (XLE -1.02%) were at the bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.12% for the day. US 30y, 20y and 2y treasury bond yields all dropped for the day. Those moves were also happening as the market opened, well before the 10:30a dip. Corporate Bonds (HYG) prices increased slightly for the day, but did dip while the equity markets dipped in the morning. Silver (SILVER) and Gold (GOLD) declined for the day. Crude Oil (CRUDEOIL1!) futures advanced slightly. Timber (WOOD) declined for the day. Copper (COPPER1!) and Aluminum (ALI1!) both advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose slightly to 0.534. 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 all ended the day with gains, although have the same long lower shadows as the index. Apple (AAPL) and Microsoft (MSFT) faired the best with a +2.77% and +1.58% gain, respectively. Amazon (AMZN) and Alphabet (GOOGL) both had gains less than 0.1%. Tesla (TSLA) was the top mega-cap of the day with a +4.03% gain. Most mega-caps did ok. Intel (INTC) added to losses with a -2.15% decline. Paypal (PYPL), JPMorgan Chase (JPM) and Banc of America (BAC) led the Financial mega-cap losses with more than 1% declines. Some mega-caps did very well despite the big swings of the day. Beyond Meat (BYND) has no lower wick and a very high closing range with a 12.81% gain. Moderna (MRNS) gained +12.20% after announcing their vaccines will work with new strains of the COVID virus. Palantir (PLTR) had a huge intraday swing but ended the day with a 11.20% gain. GameStop (GME) continued the squeeze, or whatever we are calling it now. At one point it was up over 100%, but ended the day with an 18.12% gain. The stock has gained over 300% since the beginning of the year. Blackberry (BB) issued a public statement that there is no material difference in their business results that would drive a +28.42% gain in their stock price. I believe eventually the stock manipulation, whether by a few individuals or a mass community of investors, will cause reaction from market makers, regulators, and lawmakers and have a negative impact on retail investors. It's something to keep monitoring. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Consumer Confidence numbers for January will be released in the morning after market open. API Weekly Crude Oil Stock numbers, which negatively surprised investors last week, will be updated in the afternoon. Tomorrow will kick-off the huge wave of earnings reports from big tech and other meg-caps. American Express (AXP) will announce earnings before market open. Consumer Staples company Johnson & Johnson (JNJ) and home builder DR Horton (DHI) will also announce before market open. Microsoft (MSFT), AMD (AMD), Texas Instruments (TXN) will kick-off big tech after hours. There are a bunch more I won't list here, but do check your portfolio and plan accordingly for this week's earnings releases. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The five-day trend line points to a +1.14%. The one-day trend line and the long trend line from the 10/30 bottom points to a -1.05% loss. If there is a further downside move, its notable that the index held support today above last Wednesday's gap up. The low was 13,329.77, and would hopefully continue to hold support above that gap. If the index would fill the gap, the other side is around 13,220. That's around a 3.0% decline. The 21d EMA is at 13,099.32 which could offer an area of support at 3.9% below today's close. 13,000 support seems to be holding up well. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a crazy day for many investors. I've heard numerous stories of portfolio's starting the day with record gains, but those gains were wiped out in 20-30 minutes. Still, the indexes and many stocks recovered from the sudden sell-off and ended the day with gains. On the weekly chart, we have a higher high and lower low. We can likely expect more choppiness this week as the indexes pause, move sideways or even pullback a bit and let moving averages catch up while heated gains cool off a bit. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
Market Week In Review - 1/19/2021 - 1/22/2021The 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 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=- Tuesday, January 19, 2021 Facts: +1.53%, Volume lower, Closing range: 92%, Body: 50% Good: Solid gains in afternoon after morning low, high closing range Bad: Nothing Highs/Lows: Higher high, higher low Candle: Longer lower wick from morning dip, thick green body from afternoon Advance/Decline: 2.04, two advancing stocks for every declining stock. Indexes: SPX (+0.81%), DJI (+0.38%), RUT (+1.32%), VIX (-4.52%) Sectors: Energy (XLE +2.01%), Communications (XLC +1.81%), and Technology (XLK +1.30%) were top. Real Estate (XLRE -0.66%), Consumer Staples (XLP -0.44%), Utilities (XLU -0.38%) were bottom. Expectation: Higher The market started the trading week on a note of optimism after a long weekend. The end of the last week was marked with defensive moves into lower risk sectors and safe haven assets. Today, the opposite moves were made to begin a week that brings a transition for the US, the inauguration of President Biden. The Nasdaq closed with a +1.53% gain on lower volume. The closing range of 92% and a thick 50% green body are representative of the confident buying in the afternoon that produced the bullish session. The lows in the morning were just above Friday's open. After testing that low three times in the morning, the index finally turned to the upside for the rest of the session. There were two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, January 20, 2021 Facts: +1.97%, Volume higher, Closing range: 90%, Body: 73% Good: Gains the whole day and closing near the top of the range Bad: Gap up Highs/Lows: Higher high, higher low Candle: Mostly green body with a tiny lower wick and more visible upper wick from some selling at close Advance/Decline: 1.29, more advancing stocks than declining stock. Indexes: SPX (+1.39%), DJI (+0.83%), RUT (+0.44%), VIX (-7.14%) Sectors: Communications (XLC +3.14%) and Real Estate (XLRE +2.08%) were top. Financials (XLF -0.42%) was the only losing sector. Expectation: Sideways or Higher If the equity market could talk, I think it would say Happy Inauguration Day. Investors breathed a sigh of relief that maybe some of the turmoil is behind us. That sentiment translated into a gap up at open with steady gains throughout the day. The Nasdaq closed with a big +1.97% gain on higher volume. The candle has a closing ranging of 82%, but including the gap the actual closing range is even better at 90%. The 73% green body and tiny lower wick shows the nearly constant gains that happened throughout the trading session. There were more advancing stocks than declining stocks, but note that the breadth was not as wide as the previous day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, January 21, 2021 Facts: +0.55%, Volume higher, Closing range: 72%, Body: 9% Good: New all-time high, support at yesterday's close for higher low Bad: Thin body, indecisive candle Highs/Lows: Higher high, higher low Candle: Thin green body with visible upper and lower wicks could be a spinning top Advance/Decline: 0.79, more declining stocks than advancing stocks. Indexes: SPX (+0.03%), DJI (-0.04%), RUT (-0.89%), VIX (-1.20%) Sectors: Technology (XLK +1.29%), Consumer Discretionary (XLY +0.47%), and Communications (XLC +0.35%) were the only advancing sectors. Energy (XLE -3.38%) was the worst performing sector. Expectation: Sideways It was a choppy session with some indecision from open to close on which direction the indexes wanted to move. In the end, investors ignored bleak unemployment data and ended the day with gains, albeit very concentrated in specific sectors. The Nasdaq ended with a +0.55% gain on higher volume. However the 9% body shows the indecision from open to close. The index dipped to create a long lower wick, then made new all-time highs before closing just above the open. The closing range of 72% and the higher high and higher low, makes for a slightly bullish candle. More stocks declined than advanced. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, January 22, 2021 Facts: +0.09%, Volume lower, Closing range: 77%, Body: 66% Good: Higher high and higher low, tested but stayed above low Bad: Pullback in last hour created upper wick Highs/Lows: Higher high, higher low Candle: Thick green body under a longer upper wick than lower wick Advance/Decline: 1.54, about three advancing for every one declining stock Indexes: SPX (-0.30%), DJI (-0.57%), RUT (+1.28%), VIX (+2.77%) Sectors: Real Estate (XLRE +0.25%), Utilities (XLU +0.14%) and Communications (XLC +0.04%) were the only gaining sectors. Financials (XLF -0.72%) was the bottom sector. Expectation: Sideways or Higher Welcome back to the game RUT! It was a mixed session for most of the major indexes. But the Russell 2000 proved there is more room for small-caps to grow. The Nasdaq was also able to end with a small gain for the day after fighting off morning bears and making a new all-time high before dropping back slightly at close. The Nasdaq ended with a +0.09% gain on lower volume. The closing range was 77% with a thick 66% green body in the candle. The visible upper wick was created near the end of the day as investors took profits and shifted to defensive positions headed into the weekend. About three stocks advanced for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) As the previous week was full of caution and indecision, this week the market as full of optimism. The gap-up on Wednesday, Inauguration Day, was the biggest statement of the week. Investment poured back into mega-caps with several of the biggest companies rising to new all-time highs after months of sideways consolidation. But small-caps and growth stocks were not left behind. It was a positive week across all the indexes. The Nasdaq gained +4.19% for the week, leading the major indexes. The S&P 500 (SPX) gained +1.94% and the Dow Jones Industrial (DJI) gained +0.59%. The small-cap Russell 2000 (RUT) gained +2.15%. All of the indexes hit new all-time highs during the week. The week kicked off with investors moving out of the defensive positions of the previous week and back into riskier sectors. Defensive sectors like Utilities and Real Estate were sold while long-term US Treasury bond yields rose. Riskier corporate bonds were bought up on confidence in the economic recovery. Wednesday was the pivotal day that would define the rest of the week. Mega-caps came alive with breakouts for Apple, Microsoft and Alphabet. The latter two would reach new all-time highs. Another mega-cap, Netflix would soar after surprising investors with subscription growth and announcing they were on pace for sustainable cash flow positive and would consider stock buy backs. Thursday and Friday slowed a bit, but still turned in positive gains for the Nasdaq. Friday the Russell 2000 proved that small-caps have more room to grow as well, leading the major indexes for the day. There were some moves back into defensive plays late on Friday as has become typical to close recent weeks. The index has set a new high for 9 weeks in a row, even on the weeks that ended in a loss. Average closing range continues to be very high with the most recent week closing with a 95% closing range. The volume was the lowest of the last three weeks, but still higher than average volume for the past six months. Communications ( XLC ) led the week with a big +5.44% gain, but only after a big pullback the week prior. The sector was led by Alphabet ( GOOGL ) and Facebook ( FB ) with +9.55% and +9.21% gains respectively. Those two companies make up 44% of the ETF . Netflix ( NFLX ) also had a huge gain of +13.49% but only represents 5% of the ETF . Technology ( XLK ) finished the week in second place, also with the mega-caps, Apple ( AAPL ) and Microsoft ( MSFT ) contributing the most to the gains. Financials ( XLF ) continued to underperform as more financial institutions reported earnings and disappointed investors. Energy ( XLE ) was the worst performing sector of the week. There is probably some influence from the new administration policies. However, the more immediate impact was from surprise surplus in oil supplies, signaling much lower demand for oil than anticipated. The only significant pivots during the week were on Wednesday, January 20th which was inauguration day. That day saw a spike in Communications, Technology and Real Estate ( XLRE ). The pivot for Communications and Technology were likely reinvestment into mega-caps that didn't seem to be in the crosshairs of any new policies, alleviating some fears of policies that would hurt big tech. The Real Estate pivot was driven by the additional assistance for renters proposed in the new stimulus package. The stimulus approved in December only covered the estimated amount of back rent owed, but the new stimulus package would extend rental assistance into the future. US 10y and 20y Treasury Bond yields rose for the week and continue an uptrend from a July 2020 dip. The US 2y Treasury Bond yield dropped, widening the yield spread between long term and short term bonds. High Yield Corporate Bonds (HYG) prices advanced for the week while Investment Grade Bond (LQD) prices dropped. That indicates a move from safer investments to riskier investments, although the moves are not very large. The US Dollar (DXY) declined -0.54% for the week. The put/call ratio (PCCE) ended the week at 0.517, an low value that shows overly bullish optimism among traders. 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 CNN Fear & Greed index is also increasing toward the Greed side, but not within the Extreme Greed range yet. Probably the most alarming of the contrarian sentiment indicators is the NAAIM Exposure Index which is at 112.93. This is the highest leveraged exposure among money managers since December 2017. The exposure tends to be cyclical in that when it reaches above 100, it often marks the beginning of a dip in market prices and likewise in the NAAIM Exposure index. However, November and December provided a unique moment in the index history as the exposure remained above 100 for five weeks in a row. Silver (SILVER) was up -2.98% and Gold (GOLD) was up +1.49% for the week. Crude Oil futures were up +0.26%. Timber (WOOD) was up +3.091%. Copper (COPPER!1) was even at -0.01% while Aluminum (ALI1!) gained +1.03%. One of the questions coming into this week was when would the biggest four mega-caps join the market rally. They answered big on Wednesday with breakouts among Apple, Microsoft and Alphabet. Amazon still has a bit to go before confirming the breakout, but also had a big move. All are now trading above key moving average lines. Still, a little more volume will help confirm these moves. Earnings releases will start in the next week and could provide that additional boost. Or they could send investors running. MSFT on 1/26, AAPL on 1/27, AMZN on 1/30 and GOOGL on 2/2. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Consumer Confidence numbers for January will be updated on Tuesday. Core Durable Good Orders for December will be released on Wednesday. The data provides insight into manufacturing activity which has been at its highest level in 14 years. Probably the most important economic news for the week will come on Wednesday afternoon when the Federal Open Market Committee makes a statement and the Fed announces any decisions on Interest Rate changes. GDP data for Q4 of 2020 will be released on Thursday before market open. Initial Jobless Claims will also be updated. Friday will bring more employment data, and several inflation related metrics including PCE consumer price indexes and near and long term inflation expectations. This week will put us at the height of the earnings season with several significant companies making earnings announcements. Microsoft (MSFT), Johnson & Johnson (JNJ), Starbucks (SBUX), AMD (AMD), American Express (AXP), Dr Horton (DHI) are several of the big releases on Tuesday. Wednesday will bring reports from Apple (AAPL), Tesla (TSLA), Boeing (BA), Facebook (FB). Thursday won't provide any rest as Visa (V), Mastercard 9MA), McDonald's (MCD), Atlassian (TEAM), Western Digital (WDC), American Airlines (AAL). Friday will end the week with reports from Eli Lilly (LLY), Chevron (CVX) and Honeywell (HON). No doubt I've missed some of your favorites as I can't list them all here. Make sure you know when the earnings dates are for the companies in your portfolio. Then act according to your plan whether you hold thru earnings or reduce positions. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The market made a big statement on Wednesday as the US transitioned to a new administration and a government dominated by the Democrats. The gains signaled investor confidence in the economic recovery and optimism for more stability in markets less impacted by turmoil in politics. The largest mega-caps, which have not participated fully in the rally since early November, finally broke out of consolidation patterns. The mega-caps influence not only the major indexes, sector indexes, but also have influence over investor sentiment. The $1.9 trillion dollar stimulus proposed by the Biden administration brings more strength to the recovering economy. The plan will reduce further negative impacts on employment and relieve worries from the unemployed that they might lose their homes. The stimulus checks have added to a record amount of household savings since the pandemic began. Those savings have yet to be unleashed by nervous consumers back into the economy. While still requiring an extraordinary amount of coordination across the public and private sector, we finally have a plan for mass vaccination in the US that puts the end of the pandemic insight. Pandemic news is one of the remaining sources of big market reactions over the past few months. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Investor sentiment is at a very bullish level which should bring caution to the smart investor. The NAAIM exposure index shows a high level of leverage among money managers. At that high level, it only has one direction to go which is down. Money manager can reduce leverage if more money flows into the market, but more likely it will be lowered by reducing position sizes. The surprise surge in Oil inventories this past week show that the pandemic is still having a big impact on many sectors from leisure to travel and transportation. Yet the surge in oil inventories has not meant a reduction in prices for consumers or industries depending on shipping and transportation of goods. That brings us to inflation. The fed has been very specific about its goals for higher inflation and there are signs now that their fiscal programs are starting to get the desired result. The US Dollar value remains low while commodity prices rise. As consumers begin to unleash the record savings into new purchases, demand will outpace supply quickly and raise prices. Some inflation could be bullish if it also impacts employment and wages, but there is more likely a cycle in which employment and wages stay lower while inflation moves prices higher. Additionally, at some point the Fed will have to decide inflation is high enough and take actions to control it. Those actions will likely be met with a negative response from investors, even if temporary. None of this would play out within the next week, but are things to keep an eye on as we keep the bearish side in mind. -=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: The high of Friday at 13,567.14. Can the index continue to make newer highs each week? Thursday and Friday both fell short of breaking thru 13,600. That would be the next level to watch. On the downside, there are several key levels to raise caution flags: The low of last week is 13,078.70. Stay above that line to set a higher low next week. 13,045.66 is the 21d EMA. That is 3.65% below Friday's close. It would be nice for that line to catch up a bit before its tested. If the index dips below, it would be a concern. 13,000 is an area of support. 12,558.09 is the 50d moving average. The 50d moving average is key support line that has not been tested since 11/4. The 200d MA moved above the lows of October and is now about 20% below the index at 10,913.59. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up After a week of optimistic gains in the market, it wouldn't be bad for some pause and sideways movement or even a small pullback next week. That would give the key moving average lines, which provide areas of support, some time to move up closer to the indexes. It would also allow a tapering off of the overly bullish sentiment in less dramatic way than a small or large correction. Overall, the market continues its bullish rally with a higher high and a lower low this week. The indicators are just indicators and don't drive the market. While some caution is necessary, there are many reasons to be confident in the market in the short term. Good luck, stay healthy and trade safe!
Editors' picks
NASDAQ:IXIC
by drewby4321
36
Daily Market Update for 1/22Trend lines drawn from the 10/30 bottom (57d), 1/15 (5d) and today 1/22 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, January 22, 2021 Facts: +0.09%, Volume lower, Closing range: 77%, Body: 66% Good: Higher high and higher low, tested but stayed above low Bad: Pullback in last hour created upper wick Highs/Lows: Higher high, higher low Candle: Thick green body under a longer upper wick than lower wick Advance/Decline: 1.54, about three advancing for every one declining stock Indexes: SPX (-0.30%), DJI (-0.57%), RUT (+1.28%), VIX (+2.77%) Sectors: Real Estate (XLRE +0.25%), Utilities (XLU +0.14%) and Communications (XLC +0.04%) were the only gaining sectors. Financials (XLF -0.72%) was the bottom sector. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview Welcome back to the game RUT! It was a mixed session for most of the major indexes. But the Russell 2000 proved there is more room for small-caps to grow. The Nasdaq was also able to end with a small gain for the day after fighting off morning bears and making a new all-time high before dropping back slightly at close. The Nasdaq ended with a +0.09% gain on lower volume. The closing range was 77% with a thick 66% green body in the candle. The visible upper wick was created near the end of the day as investors took profits and shifted to defensive positions headed into the weekend. About three stocks advanced for every declining stock. The Russell 2000 (RUT) had a crazy open, dropping a full one percent in its opening five minutes. That wouldn't last long and the small-cap index climbed the rest of the day, ending the session with a new all-time high and 100% closing range. The RUT gained +1.28% for the day. The S&P 500 (SPX) and Dow Jones Industrial (DJI) had very different days, dropping -0.30% and -0.57% respectively. Real Estate (XLRE +0.25%), Utilities (XLU +0.14%) and Communications (XLC +0.04%) were the only gaining sectors. Financials (XLF -0.72%) was the bottom sector. It was clear from the beginning of the session that investors were making defensive plays on the last day of the short week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) gained +0.12% for the day. US 30y and US 20y treasury bond yields dropped slightly while 2y yields remained flat. Corporate Bonds (HYG) prices decreased for a second day. Silver (SILVER) advanced while Gold (GOLD) declined for the day. Crude Oil (CRUDEOIL1!) futures declined. Timber (WOOD) advanced to a new multi-year high. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced. The +3.67% increase in Aluminum futures comes after several weeks of declines. The commodity prices have pivoted today from recent trends. This will be something to watch for a continuation and new trend. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio 0.517. 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 (AAPL) led the largest mega-caps with a +1.61% gain. Microsoft (MSFT) and Alphabet (GOOGL) both gained about +0.45%. Amazon (AMZN) dropped back from recent gains to lose -0.45% for the day. All are healthy moves. Home Depot (HD) led the mega-caps with a 1.77% gain, likely driven by surprisingly good real estate data this week, including Housing Starts and Existing Home Sales. Intel (INTC) sold off sharply for a -9.29% loss after a big gain yesterday. The late day gains yesterday were caused by an early release of earnings after some of the details leaked. Several growth stocks had big advances for the day. Sumo Logic (SUMO) advanced 12.10%. Digital Turbine (APPS) gained +25.40%. But the big winner of the day was Palantir (PLTR) with a 25.40% gain. Gamestop (GME) continued its short squeeze with a +51.08% gain. I may have to add GME as another contrarian indicator of investor sentiment. :) -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead There is not much economic news schedule for Monday. There are also no "Daily Market Update" notable earnings releases for Monday. That's the quiet before the storm as many of the big mega-caps will report earnings starting Tuesday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The five-day trend line points to a +1.95% gain. The one-day trend line points to a +0.49%. The recent gains for the index still put it above the long-term trend line from the 10/30 bottom, but it is closing in on the middle of that channel. The line is pointing to a -0.67% loss for Monday. If there is a further downside move, 13,000 support seems to be holding up well for the index and that's just below the 21d EMA now. The 21d EMA is around 3.6% below the index. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It wasn't a bad way to end a solid week of gains. After climbing over 4% it's good to have the Nasdaq pause and let the moving averages catch up. A higher high and higher low for the week, continues a 12 week rally since early November. Keeping the gains at a steady pace can help the rally continue its move upward. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 1/21Trend lines drawn from the 10/30 bottom (56d), 1/14 (5d) and today 1/21 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, January 21, 2021 Facts: +0.55%, Volume higher, Closing range: 72%, Body: 9% Good: New all-time high, support at yesterday's close for higher low Bad: Thin body, indecisive candle Highs/Lows: Higher high, higher low Candle: Thin green body with visible upper and lower wicks could be a spinning top Advance/Decline: 0.79, more declining stocks than advancing stocks. Indexes: SPX (+0.03%), DJI (-0.04%), RUT (-0.89%), VIX (-1.20%) Sectors: Technology (XLK +1.29%), Consumer Discretionary (XLY +0.47%), and Communications (XLC +0.35%) were the only advancing sectors. Energy (XLE -3.38%) was the worst performing sector. Expectation: Sideways -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview It was a choppy session with some indecision from open to close on which direction the indexes wanted to move. In the end, investors ignored bleak unemployment data and ended the day with gains, albeit very concentrated in specific sectors. The Nasdaq ended with a +0.55% gain on higher volume. However the 9% body shows the indecision from open to close. The index dipped to create a long lower wick, then made new all-time highs before closing just above the open. The closing range of 72% and the higher high and higher low, makes for a slightly bullish candle. More stocks declined than advanced. The Russell 2000 (RUT) declined -0.89% for the day, continuing to trail the other major indexes this week. The S&P 500 (SPX) and Dow Jones Industrial (DJI) stayed about even for the day. The VIX declined -1.20%. Technology (XLK +1.29%), Consumer Discretionary (XLY +0.47%), and Communications (XLC +0.35%) were the only advancing sectors. These three sectors all have large exposure to the biggest mega-caps which helped drive gains for the day. Energy (XLE -3.38%) was the worst performing sector. Energy dipped as crude oil prices took a hit from a surprise increase in US supply, and slower recovery in demand than expected. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.44% for the day. US 30y and US 20y treasury bond yields climbed back to recent highs while shorter term yields remained flat. Corporate Bonds (HYG) prices decreased slightly for the day, but remain near recent highs. Silver (SILVER) advanced while Gold (GOLD) declined for the day. Crude Oil (CRUDEOIL1!) futures declined. Timber (WOOD) advanced to a new multi-year high. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced. The +3.67% increase in Aluminum futures comes after several weeks of declines. The commodity prices have pivoted today from recent trends. This will be something to watch for a continuation and new trend. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose to 0.609. 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. The CNN Fear & Greed index continues to rise. The NAAIM exposure is at its highest value since 2017. Money Managers are well into leverage with a mix of bullish and bearish sentiment. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Leaders The four biggest mega-caps, Apple (AAPL, Microsoft (MSFT), Amazon (AMZN) and Alphabet (GOOGL) all continued advances from yesterday. Apple and Alphabet set new all-time highs before retreating a bit. All four are well above the key moving average lines now. Intel (INTC) was the leading mega-cap, gaining +6.46% as investors anticipated the earnings announcement after hours. However earnings slipped despite record revenue and the stock fell back 4.74% in aftermarket trading Overall mega-caps were mixed. Energy and Financial stocks were at the bottom of the list. Growth stocks were also mixed, but there were some big winners for the day. FUTU gained another 9.95%, but was outshined by the similar stock UP Fintech (TIGR) which gained 23.72%. Chinese FinTech companies have had quite a run the past few weeks. AirBnB (ABNB) gained 11.48%. Fastly (FSLY), Solar Edge (SEDG) and Moderna (MRNA) all gained over 6%. Digital Turbine (APPS -3.67%) fell back from yesterday's gains. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Manufacturing and Services purchasing data will be released just after market open. These numbers show economic activity in the two sectors. Additional real estate data will be released a few minutes later. Crude Oil Inventories will be provided at 11:00 and could add to yesterday's negative news for the energy sector. Big oil company, Schlumberger (SLB) will release earnings before market open. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The one-day and five-day trend lines point to a gain of +0.40% to +0.77%. After a few days of gains, the index is well above the long-term trend line from the 10/30 bottom. That line points to a loss of -0.96%. If there is a downside move, 13,000 support seems to be holding up well for the index and that's just above the 21d EMA now. The 21d EMA is around 3.8% below the index which should also offer support at the 13,000 level. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Yesterday was an explosive day of gains. It's no surprise that the index would take a breather today. The choppiness during the day is a reason for some caution. The gains were focused on larger caps that are breaking out from recent bases. The higher high and higher low is a great sign and we will hopefully continue the trend to finish the short week. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 1/20Trend lines drawn from the 10/30 bottom (55d), 1/13 (5d) and today 1/20 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, January 20, 2021 Facts: +1.97%, Volume higher, Closing range: 90%, Body: 73% Good: Gains the whole day and closing near the top of the range Bad: Gap up Highs/Lows: Higher high, higher low Candle: Mostly green body with a tiny lower wick and more visible upper wick from some selling at close Advance/Decline: 1.29, more advancing stocks than declining stock. Indexes: SPX (+1.39%), DJI (+0.83%), RUT (+0.44%), VIX (-7.14%) Sectors: Communications (XLC +3.14%) and Real Estate (XLRE +2.08%) were top. Financials (XLF -0.42%) was the only losing sector. Expectation: Sideways or Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview If the equity market could talk, I think it would say Happy Inauguration Day. Investors breathed a sigh of relief that maybe some of the turmoil is behind us. That sentiment translated into a gap up at open with steady gains throughout the day. The Nasdaq closed with a big +1.97% gain on higher volume. The candle has a closing ranging of 82%, but including the gap the actual closing range is even better at 90%. The 73% green body and tiny lower wick shows the nearly constant gains that happened throughout the trading session. There were more advancing stocks than declining stocks, but note that the breadth was not as wide as the previous day. The Russell 2000 (RUT) gained 0.43%, one of the few times in recent months where it has trailed the other indexes in performance. So there was a shift back towards the larger caps, but not enough to call it a rotation. The S&P 500 (SPX) ended with a +1.39% gain while the Dow Jones Industrial (DJI) gained +0.83%. Communications (XLC +3.14%) was the leading sector by a large margin. Technology (XLK +1.98%) looked like it would keep up with Communications in the morning, but faded behind Real Estate (XLRE +1.98%) by afternoon. Consumer Discretionary (XLY +1.89%) was the other stand-out sector. These four sectors drove the S&P 500 gains. All other sectors under-performed the major index. Only Financials (XLF -0.42%) declined for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined slightly to -0.03%. US 30y treasury bond yields stayed about even while US 10y and US 2y yields dropped. Corporate Bonds (HYG) prices increased for the day and set a recent high. Silver (SILVER) and Gold (GOLD) both advanced for the day. Crude Oil (CRUDEOIL1!) futures also rose. Timber (WOOD) and Copper (COPPER1!) advanced while Aluminum (ALI1!) declined. These commodity trends have been consistent the past 4-5 days. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio rose slightly to 0.560. 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 four biggest mega-caps, Apple (AAPL, Microsoft (MSFT), Amazon (AMZN) and Alphabet (GOOGL) decided they finally wanted to join the market rally. All four turned in huge gains for the day. Alphabet was the biggest gain, advancing +5.36%. All four closed well above the key 21d EMA and 50d MA. Netflix was the top performing mega-cap after surprising investors with a record number of subscribers and the first time over 200m. The fact they did not meet earnings expectations, did not matter. The subscribers plus the announcement of a potential stock buyback program sent the price soaring. Most mega-caps had gains for the day. The large banks such as Bank of America (BAC) and JP Morgan Chase (JPM) were the worst performers. There were a lot of exciting moves among growth stocks as well. FUTU (FUTU) had another big advance with a +10.97% gain. Digital Turbine (APPS) also broke into new all-time highs with a +10.85% gain. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow will kick-off with real estate data before market open. That will include Building Permits and Housing Starts. Also before market open, there will be an update on Initial Jobless Claims and Manufacturing data for January. Fifth Third (FITB) and KeyCorp (KEY) are among financial companies reporting earnings before market open. Intel (INTC) will IBM (IBM) announce earnings after market close. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance If today's trend line continues tomorrow, it points to a +1.08% gain tomorrow. The five-day trend line and long-term trend line from the 10/30 bottom point to a small pullback of -0.44%. If there is a downside move, 13,000 support seems to be holding up well for the index and that's just above the 21d EMA now. The 21d EMA is around 3.8% below the index which should also offer support at the 13,000 level. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a bold statement made by the markets today as the US transitions to a new administration. Lots of great things happened including the big mega-caps joining the current market rally that started in November. The Financial sector declining on such a big day was one negative point. The sector is declining as more banks are releasing earnings that beat expectations on earnings but are disappointing on revenue. But keep in mind that the higher treasury bond yields, that are expected to drive more revenue in this sector, only came in the first week of January. Watch out for the gap created today. The index doesn't have to fill the gap, but it often has in the past. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
Daily Market Update for 1/19Trend lines drawn from the 10/30 bottom (54d), 1/11 (5d) and today 1/19 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, January 19, 2021 Facts: +1.53%, Volume lower, Closing range: 92%, Body: 50% Good: Solid gains in afternoon after morning low, high closing range Bad: Nothing Highs/Lows: Higher high, higher low Candle: Longer lower wick from morning dip, thick green body from afternoon Advance/Decline: 2.04, two advancing stocks for every declining stock. Indexes: SPX (+0.81%), DJI (+0.38%), RUT (+1.32%), VIX (-4.52%) Sectors: Energy (XLE +2.01%), Communications (XLC +1.81%), and Technology (XLK +1.30%) were top. Real Estate (XLRE -0.66%), Consumer Staples (XLP -0.44%), Utilities (XLU -0.38%) were bottom. Expectation: Higher -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The market started the trading week on a note of optimism after a long weekend. The end of the last week was marked with defensive moves into lower risk sectors and safe haven assets. Today, the opposite moves were made to begin a week that brings a transition for the US, the inauguration of President Biden. The Nasdaq closed with a +1.53% gain on lower volume. The closing range of 92% and a thick 50% green body are representative of the confident buying in the afternoon that produced the bullish session. The lows in the morning were just above Friday's open. After testing that low three times in the morning, the index finally turned to the upside for the rest of the session. There were two advancing stocks for every declining stock. The Russell 2000 (RUT) was just behind the Nasdaq with a +1.32% gain. The S&P 500 (SPX) and Dow Jones Industrial (DJI) followed with a +0.81% and +0.38% gain respectively. The Nasdaq is nearing a new all-time high. The other major indexes are slightly farther from new all-time highs. The VIX volatility index declined by -4.52%. Energy (XLE +2.01%), Communications (XLC +1.81%), and Technology (XLK +1.30%) were top sectors for the day. Real Estate (XLRE -0.66%), Utilities (XLU -0.38%), and Consumer Staples (XLP -0.44%) were the only losing sectors. Having Real Estate and Utilities at the bottom is a significant change from the latter part of last week as investors reduced exposure in these defensive plays. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) dropped -0.29%. US 30y and US 10y treasury bond yields rose while US 2y treasury bonds dropped, widening the spread between longer term and shorter term bonds. Corporate Bonds (HYG) prices increased for the day and are heading back to recent highs. Silver (SILVER) and Gold (GOLD) both advanced for the day. Crude Oil (CRUDEOIL1!) futures also rose. Timber (WOOD) and Copper (COPPER1!) advanced while Aluminum (ALI1!) declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio dropped back to 0.553. 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 four mega-caps had gains for the day. Alphabet (GOOGL) had the biggest gain at +3.29% and moved above its 21d EMA and 50d MA. Apple (AAPL) remains below its 21d EMA, but well-above the 50d MA. Microsoft (MSFT) and Amazon (AMZN) had gains for the day, but remain below both of these moving average lines. Taiwan Semiconductor (TSM), ASML Holding (ASML), Facebook (FB) and Alibaba (BABA) were the top four mega-cap performers for the day. Most mega-caps gained for the day, however big retail Walmart (WMT), Home Depot (HD), Procter & Gamble (PG) and Nike (NKE) were at the bottom of the mega-cap list with losses. There were a lot of big winners in growth stocks. FUTU (FUTU) rose +16.85%. Magnite Inc (MGNI) gained +15.47%. Etsy (ETSY) and Fastly (FSLY) both rose around 8%. At the bottom of the growth stock list was Fiverr (FVRR) which lost -10.05% after an analyst downgraded the stock. Netflix (NFLX) was up over 12% after hours. Their earnings announcement included a record number of subscriptions, exceeding 200m for the first time, driving record revenue. That was enough to excite investors, despite Netflix missing expectations on earnings. They also are considering share buybacks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Tomorrow is the inauguration of President Joe Biden. His remarks during the day will put more focus on his priorities and impact markets accordingly. Otherwise there is not much economic news for tomorrow. Earnings announcements tomorrow include United Health (UNH), Proctor & Gamble (PG), ASML Holding (ASML) and Morgan Stanley (MS), all before market open. United Airlines (UAL) will release their earnings announcement after market close. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The one-day trend line meets up with the long trend line from the 10/30 bottom, and points to a +1.08% gain and a new all-time high. The five-day trend line points to a -0.44% pullback. If there is further downside, 13,000 seems to be holding up well for the index. The 21d EMA is just over 2% below the index which should be an area of support if there's a further downside move. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The index started the week on a positive note. The bullish afternoon trading points to more upside for tomorrow. President Biden is likely to give additional clues to his immediate actions in his inauguration speech. Some of those actions may create some rotations, but overall the fed and further stimulus should hold the broader market in a good place. Keep an eye on investor sentiment as confidence builds this week. The put/call ratio is at a very low level. The CNN Fear & Greed index is not too bad, considering the context. However, the NAAIM Exposure Index is above 100, which often proceeds pull backs. Recently, Aug 26 and Oct 14 were examples of this. However, it was above 100 in November and December with not much impact to the markets. Remain confident, but also cautious. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321
1
Market Week In Review - 1/11/2021 - 1/15/2021The 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 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, January 11, 2021 Facts: -1.25%, Volume lower, Closing range: 27%, Body: 9% Good: Lower volume, stayed above 13k Bad: Morning gains turn to a new intraday low before close Highs/Lows: Lower high, lower low Candle: Bearish inside day, thing body at bottom of candle Advance/Decline: 0.83, more declining than advancing Indexes: SPX (-0.66%), DJI (-0.29%), RUT (-0.03%), VIX (+11.69%) Sectors: Energy (XLE +1.57%) and Health Services (XLV +0.47%) were top. Communications (XLC -1.78%) and Consumer Discretionary (XLY -1.87%) were bottom. Expectation: Sideways or Lower It was tough to have any expectation coming into today's trading session. Nervousness about what will happen in DC on top of continuing pandemic pressures over the weekend resulted in a low start to the day. Confidence grew as buyers came in but ultimately the bears ruled the day, bringing the index back down to a new intraday low before close. The index closed with a -1.25% loss on lower volume. The bearish day resulted in a 27% closing range where the close is just under the open. The 9% body and long upper wick show the morning buying turning to afternoon selling. More stocks declined than advanced. The S&P 500 (SPX) and Dow Jones Industrial (DJI) had similar patterns, but closed the day with smaller losses. The Russell 2000 (RUT) also had a loss but with a more bullish look and the smallest loss of the four indexes. The VIX volatility Index rose +11.69%. Energy (XLE +1.57%) and Health Services (XLV +0.47%) were the top sectors for the day. Crude Oil prices continuing to rise helped Energy take the top spot after a morning dip. Financials (XLF +0.32%) was the only other sector to gain for the day. Communications (XLC -1.78%) and Consumer Discretionary (XLY -1.87%) were bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, January 12, 2021 Facts: +0.28%, Volume higher, Closing range: 77%, Body: 7% Good: Close in upper side of range, dipped just briefly below 13,000 Bad: Thin body, second indecisive day, LH/LL Highs/Lows: Lower high, lower low Candle: An indecisive candle with close just above open, long lower shadow Advance/Decline: 2.23, more than two advancing for every declining stock Indexes: SPX (+0.04%), DJI (+0.19%), RUT (+1.77%), VIX (-3.11%) Sectors: Energy (XLE +3.49%) and Consumer Discretionary (XLY +1.53%) were top. Communications (XLC -1.61%) and Health Services (XLV -1.09%) Expectation: Sideways If you are invested in growth stocks and small caps you are probably delighted, but it may be a bit confusing to look at the indexes. The growth and small cap segments did exceptionally well, but the major indexes show an indecisive day. The Nasdaq dipped mid-day but finished just above its open. The index closed up +0.28% on higher volume. The closing range of 77% is a positive, but the 7% body displays the indecisiveness. However, the advance/decline number of 2.23 shows a much more bullish picture, raising questions whether the broader market can continue to advance without the bigger players advancing. Another way to see the power of the small-caps is the Russell 2000 (RUT) index that soared above the other indexes with a +1.77% gain and a fat green candle with no lower wick and a tiny upper wick. The S&P 500 (SPX) and Dow Jones Industrial (DJI) had smaller gains than the Nasdaq, all show indecisive candles. Energy (XLE +3.49%) and Consumer Discretionary (XLY +1.53%) were the top sectors of the day. Communications (XLC -1.61%) and Health Services (XLV -1.09%) were at the bottom. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, January 13, 2021 Facts: +0.43%, Volume lower, Closing range: 65%, Body: 34% Good: Never revisited morning low, close in upper half of candle Bad: Nothing, just not exciting Highs/Lows: Higher high, Higher low Candle: Medium to small body with longer upper wick than lower wick Advance/Decline: 0.85, more declining stocks than advancing stocks Indexes: SPX (+0.04%), DJI (+0.19%), RUT (+1.77%), VIX (-3.11%) Sectors: Utilities (XLU +1.95%) and Real Estate (XLRE +1.37%) were top. Industrials (XLI -0.86%) and Materials (XLB -1.02%) were bottom. Expectation: Sideways It was not a very exciting session for the Nasdaq today, but there were certainly pockets of excitement in parts of the market. The brief climb in the morning for Nasdaq turned to a sideways movement for the rest of the day. The good news is that the index never went back down towards the morning low. However, the gains for mega-caps and some growth stocks were not broadly shared across the market, keeping the index from closing closer to the intraday highs. The index closed with a +0.43% gain on lower volume. The closing range was 65% with a green body covering 34% of the candle. More stocks declined than advanced on the Nasdaq. Another way to see the influence of the mega caps today is to look at the cap weighted QQQ (+0.68%) vs the equal weight QQQE (-0.01%). The S&P 500 (SPX) gained +0.23% while the Dow Jones Industrial lost (DJI) -0.10%. The Russell 2000 (RUT) lost -0.75% as money rotated into larger cap stocks today. Utilities (XLU +1.95%) and Real Estate (XLRE +1.37%) were the top sectors. Often these sectors are at the top when investors get a bit nervous, but don't want to exit the equities market. The worst performing sectors were Industrials ( XLI -0.86%) and Materials ( XLB -1.02%). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, January 14, 2021 Facts: -0.12%, Volume lower, Closing range: 12%, Body: 51% Good: New all-time high, higher low Bad: Closing range, sell-off to close after morning all-time high Highs/Lows: Higher high, Higher low Candle: Thick red body in lower half of the candle, longer upper wick Advance/Decline: 2.50, five advancing stocks for every two declining stocks. Indexes: SPX (-0.38%), DJI (-0.22%), RUT (+2.05%), VIX (+4.68%) Sectors: Energy (XLE +2.96%) and Real Estate (XLRE +0.62%) were top. Consumer Discretionary (XLY -0.64%) and Technology (XLK -0.88%) were bottom. Expectation: Sideways Investors shook off bad employment news in the morning to drive indexes to all-time highs before an afternoon session of selling. There were plenty of gains across a breadth of stocks, but the losses in the mega-caps weighed down the major indexes. The exception was the small-cap Russell 2000 which gained +2.05% in a solidly upwards session. The Nasdaq closed with a -0.12% loss after setting a new all-time high. The closing range of 12% with a large 51% red body is sign of weakness, but volume was lower so would not count as a distribution day. The losses were focused in the larger caps which is why the overall index is down even though there were far more advancing stocks than declining stocks. As we did yesterday, you can also see the imbalance by looking at the QQQ which is down -0.53% while the equal weight QQQE is up +0.12%. The S&P 500 (SPX) lost -0.38% while the Dow Jones Industrial average (DJI) lost -0.22%. The VIX Volatility index rose +4.68%. Energy (XLE +2.96%) was the top sector after OPEC released their monthly report with a mix of messages around oil demand and shale output. Real Estate (XLRE +0.62%) was the second best sector. Consumer Discretionary (XLY -0.64%) and Technology (XLK -0.88%) were the worst performing sectors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, January 15, 2021 Facts: -0.87%, Volume lower, Closing range: 26%, Body: 53% Good: Held lows near 13,000 Bad: Bearish in early morning and afternoon selling, low closing range, thick red body Highs/Lows: Lower high, lower low Candle: Thick red body, equal upper and lower wicks Advance/Decline: 0.45, two declining stocks for every advancing stock. Indexes: SPX (-0.72%), DJI (+0.30%), RUT (-1.49%), VIX (+4.69%) Sectors: Real Estate (XLRE +1.54%) and Utilities (XLU +0.98%) were top. Energy (XLE -3.89%) and Financials (XLF -1.65%) were bottom Expectation: Sideways or Lower The market took a step back at the end of a week, after moving sideways most of the week. It wasn't a huge move downward, but was certainly a bearish looking day across indexes and market indicators. The Nasdaq closed with a -0.87% loss on lower volume. The closing range was 26% and a thick red body of 53% that sits in the middle of the candle. The short upper and lower wicks show some effort by the bulls to buy up dips and move the market upwards. But with two declining stocks for every advancing stock, the result is a bearish candle to end the week. The S&P 500 (SPX) lost -0.72% while the Dow Jones Industrial average (DJI) gained +0.30%. The Dow Jones gains were primarily from a few mega-cap stocks that had positive gains and are heavily weighted within the index. The Russell 2000 (RUT) lost -1.49%. The VIX Volatility index rose +4.69%. Real Estate (XLRE +1.54%) and Utilities (XLU +0.98%) were top, two sectors used as defensive strategies for investors. Energy (XLE -3.89%) and Financials (XLF -1.65%) were bottom after leading much of the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) This was a good week to pause and realize the benefit of why I spend this time on the weekend to walk back thru the week and look at the bigger picture. The week was a mix of ups and downs depending on what types of investments are the focus in your portfolio. Week over week, the Nasdaq lost -1.54% with a closing range of 18% and a negative body of 18.6%. Those are not great stats. However, when you look at the week as a whole, there are a variety of positive signs both in the charts as well as the market indicators. The first four days of the week trend upward and set a new all-time high on Thursday. The high of the week is higher than last week's high and the low of the week is higher than last week's low. Energy (XLE) and Financials (XLF) led the sectors for most of the week. These are two sectors that are signals of economic recovery. So what happened on Friday? There were several catalysts to the end of the week sell-off. Some of it had to do with sector rotation. First, the SEC announced an investigation into Exxon Mobil (XOM) which weighted down the Energy sector. Exxon Mobil makes up 23% of the XLE ETF that I use to track the sector, and as people reduce their exposure to the sector it will impact many of the stocks in that sector. It didn't help that Tesla (TSLA) caused a sell-off of solar energy stocks after they announced they'll produce their own inverter for customers. It was a similar story for Financials. Before market open, Citigroup (C) and Wells Fargo (WFC) released earnings announcements that showed they beat earnings expectations but fell short on revenue. Investors were not pleased with the revenue and reduced their exposure to the Financials sector. The third catalyst was investor sentiment heading into a three-day weekend that precedes what could be a tumultuous week for the US. There are a few places you can see that sentiment displayed. For sectors, Utilities (XLU) and Real Estate (XLRE) were gaining on other sectors throughout the week and outperformed on Friday. These sectors are defensive plays. US02Y and US05Y treasury bond yields, as well as longer term bond yields, all dropped for the week as investors moved to the safe haven investments. Friday was also an expiration day for option contracts. With the put/call ratio being quite low (many more calls than puts) over the past several weeks, and many of the large mega-caps moving sideways, it's very possible that a high number of call contracts expired without meeting the strike price. Market makers may sell the underlying stocks to keep prices lower than the strike and also reduce exposure to the a stock they no longer need to cover for worthless contracts. All of that to say (as much to myself as to the reader), don't worry about Friday's minor pullback, even if it hit some of your positions more than the market dip. The Russell 2000 (RUT) continued its leadership among the indexes with a +1.51% gain for the week. The S&P 500 lost -1.48% while the Dow Jones Industrial average lost -0.57% for the week. You can see the bearish end to the week in the weekly chart with the low closing range and long upper-wick formed after selling from Thursday's high. You can also see that we have a higher high and a higher low than the previous week. That's an uptrend. Looking at the volume is another key characteristic. Note that bullish green bars have higher volume than bearish red bars. Even at the daily level, this past week had higher volume on bullish days than on bearish days. The sectors had a wild race this week with the backdrop of a up and down market with several rotations between small caps, mid caps and large caps. Energy ( XLE ) would ultimately be the winner, supported by production cuts in Saudi Arabia, higher than expected demand for oil , and some positive news from OPEC. There was a significant pullback on Friday after SEC announced an investigation into Exxon Mobile ( XOM ) which makes up 23% of the XLE ETF . Financials ( XLF ) led must of the week as investors expect higher treasury yields boost performance for big banks. That turned upside down on Friday when Citigroup (C) and Wells Fargo ( WFC ) disappointed on revenue despite beating expectations on earnings . It was Real Estate ( XLRE ) and Utilities ( XLU ) that started to climb on Tuesday and were top performers on Friday. Those two sectors are defensive plays for equity investors. Both are expected to suffer less from market pullbacks. Materials ( XLB ) and Industrials ( XLI ) were also doing well earlier in the week, but pulled back on Friday. It could be that the nearly $2 trillion of stimulus promised by President-elect Biden is seen as a delay to the expected investments in infrastructure. Just a theory. Technology ( XLK ) and Communications ( XLC ) were at the bottom. The big tech mega-caps went up and down in price all week as money moved in and out of the segment. Communications, which includes companies like Facebook ( FB ) and Twitter ( TWTR ) suffered the most as investors fear negative impact of recent actions related to Donald Trump. US Treasury Bond yields dropped for the week as investors moved into the instrument. The purchasing could be a combination of reaction to the Fed continuing bond buying. It can also be due to the sharp increase in value of the US Dollar after hitting recent lows last week. And some of it could be as a viable safe haven from volatility in the stock market. Prices for high yield corporate bonds (HYG) declined while investment grade (LQD) corporate bonds increased. In addition to the increased prices of short term treasury bonds (IEI), it signals investors moving to less riskier assets. The US Dollar (DXY) rose +0.70% for the week. The put/call ratio (PCCE) ended the week at 0.657. The is a much better number than the previous week which was showing too much optimism. 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 (SILVER) was down -2.65% and Gold (GOLD) was down -1.13%. Crude Oil futures were up +0.69%. Timber (WOOD) was down -3.01%. Copper (COPPER!1) dropped -2.76% while Aluminum (ALI1!) was down -2.42%. A question for me all week has been will the big tech mega-caps continue to weigh on the indexes, or will they start to participate in the market rally that's been ongoing for the past 10-11 weeks. And on the flip side, can the rally continue without them. Looking at the Relative Candle indicator at the bottom of each chart, you can see they have lagged behind the Nasdaq (Alphabet had several weeks of outperforming). Each of the mega-caps has been forming a consolidation pattern where lows are getting closer to highs while volume is contracting. That’s a classic pattern of reduction in sellers as buyers take the opportunity to increase positions, holding prices up. Earnings dates approach for these giants later in January. MSFT on 1/26, AAPL on 1/27, AMZN on 1/30 and GOOGL on 2/2. Those dates could be pivotal for the mega-caps to get back in the game. Or they could be a breakdown that pulls the indexes with them. The above charts show an important pivot that occurred the week of August 3, 2020. The top chart shows the performance of Value stocks in the S&P 500 vs the rest of S&P 500 stocks. You can see that value stocks have underperformed since 2008, but even more so in 2020 prior to August 3. In the bottom chart, you see the QQQ ETF which is based on the Nasdaq 100, weighted on market cap (more representation for larger cap companies) and the QQQE ETF which is equal weighted across the Nasdaq 100. This shows the rotation of investment from larger caps to a more broad investment across the market which has driven recent gains. Not included here, but you can do a similar comparison of the Russell 2000 (RUT) small cap vs the S&P 500 and see the same pivot. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Markets are closed on Monday for Martin Luther King Jr. day. Next week will bring the inauguration of President-elect Biden. The transition on Wednesday will lead to several executive decisions being made over the next week. Those decisions will impact sectors such as Energy, Industrials, Materials and Technology. Some to the positive, some to the negative. Wednesday will also bring updates on Crude Oil Inventories. Thursday will include Fed Manufacturing data, Employment Data and December data for Building Permits and Housing Starts. On Friday, we'll have more updates on Manufacturing activity, Services activity, and Existing Homes Sales. Earnings activity will pick up next week and continue for the next several weeks. There will be more earnings announcements from big banks, including Bank of America (BAC), Goldman Sachs (GS) on Tuesday before market open. Netflix (NFLX) will announce earnings after market close on Tuesday. Procter & Gamble (PG), United Health (UNH) and Morgan Stanley (MS) on Wednesday. Intel (INTC), IBM (IBM) and Citrix Systems (CTXS) kick-off big tech stock earnings on Thursday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side A higher high and a higher low. The index continues to move in an upward trend despite a pause this week with a slight pullback on Friday. The uptrend continues despite turmoil in politics and the worsening pandemic. The fed has continued its policy of not raising interest rates and continuing to buy back bonds. This is keeping liquidity in the markets while further stimulus will add to economic activity. Many analysts are questioning whether further stimulus is even needed as the economy seems to be getting back on track. Wednesday will mark the new administration which will bring immediate actions to further support economic recovery. Those will range from increased focus on ending the pandemic as well as stimulus to small businesses and individuals. Although the big mega-caps have not participated in the rally, and in some cases weighed down the index, they still have plenty of support and could break out of consolidation patterns at any moment. So the markets continue to rise. The index has closed above the 21d EMA for 50 consecutive days. That's 11 weeks of rally, that hasn't yet shown signs of backing down. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Investors are clearly worried about what is to come in the near future. The defensive plays in Utilities and Real Estate as well as the move from risky investments to safer Treasury Bonds and Investment Grade Corporate Bonds is a clear sign of that nervousness. It may not take much for investors to go further and begin selling off equities in favor of bonds or commodities. The implementation of Biden's policies in the coming weeks can have both positive and negative impacts. Energy that has been leading the sectors for so many weeks is likely to be impacted, on top of the Exxon Mobil investigation launched last week. At the same time, policies that require the support of congress may be delayed due to the impeachment trial that will start this week. Those may include delays to further stimulus, infrastructure projects and programs to reduce unemployment. -=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: 13,000 is a support area. The index closed a hair below that point on Friday. Look for it to move above and stay above this area next week. The high of Thursday at 13,220.16. Can the index continue to make newer highs each week? The index is pausing about every 300-400 points, so expect some resistance around 13,350 - 13,400 area. Reach 13,400 would put the index back in the middle of a regression trend from the 10/30 bottom. On the downside, there are several key levels to raise caution flags: The low of last week is 12,949.76. Stay above that line to set a higher low next week. 12,860.31 is the 21d EMA. The index stayed clear of the line this past week, even with the dip on Friday. 12,550 is an area of support. 12,425.34 is the 50d moving average. The 50d moving average is key support line that has not been tested since 11/4. The index is closer to the line after this past weeks pause, which is a good gap to close, but not dip below the line. The support area of 12,250 is the next area. It is nearly 6% below Friday's close and would be a signal of correction if we reached that area. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Wednesday's inauguration will hopefully end some of the turmoil in the markets that we've experienced over the last few months. It doesn't guarantee that prices move up, but at least there might be a reduction in the number of surprises that have pivoted investors in various directions since early November. For now, we are still in an uptrend. There are positive signs that the rally will continue. Follow price. Have a plan for all the stocks in your portfolio depending on your investment style and risk tolerance. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Nasdaq CompositeNasdaq Composite - 59% above it’s 200-week moving average. Last week we plotted the index relative to the US10Y-US2Y spread, highlighting periods where a decline in the Nasdaq coincided with a rise in the spread. Today, we add another dimension as we highlight the Nasdaq Composite being extended by 59% versus it's 200-week simple moving average. As per the weekly chart, you will note that before the prior declines, the index traded at +34% (Oct-2018) and +38% (Feb-2020). In addition, the Relative Strength Index has made two lower highs over the 11-month period - a classic negative/bearish divergence.
TVC:IXICShort
by LD_Perspectives
Daily Market Update for 1/15Trend lines drawn from the 10/30 bottom (53d), 1/11 (5d) and today 1/15 (1d).   Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog. I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, January 15, 2021 Facts: -0.87%, Volume lower, Closing range: 26%, Body: 53% Good: Held lows near 13,000 Bad: Bearish in early morning and afternoon selling, low closing range, thick red body Highs/Lows: Lower high, lower low Candle: Thick red body, equal upper and lower wicks Advance/Decline: 0.45, two declining stocks for every advancing stock. Indexes: SPX (-0.72%), DJI (-0.57%), RUT (-1.49%), VIX (+4.69%) Sectors: Real Estate (XLRE +1.54%) and Utilities (XLU +0.98%) were top. Energy (XLE -3.89%) and Financials (XLF -1.65%) were bottom Expectation: Sideways or Lower -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Market Overview The market took a step back at the end of a week, after moving sideways most of the week. It wasn't a huge move downward, but was certainly a bearish looking day across indexes and market indicators. The Nasdaq closed with a -0.87% loss on lower volume. The closing range was 26% and a thick red body of 53% that sits in the middle of the candle. The short upper and lower wicks show some effort by the bulls to buy up dips and move the market upwards. But with two declining stocks for every advancing stock, the result is a bearish candle to end the week. The S&P 500 (SPX) lost -0.72% while the Dow Jones Industrial average (DJI) gained -0.57%. The Russell 2000 (RUT) lost -1.49%. The VIX Volatility index rose +4.69%. Real Estate (XLRE +1.54%) and Utilities (XLU +0.98%) were top, two sectors used as defensive strategies for investors. Energy (XLE -3.89%) and Financials (XLF -1.65%) were bottom after leading much of the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) rose for the day and is trending up since the beginning of the year. US Treasury 30y (US30Y), 10y (US10Y) and 2y (US02Y) bond yields all declined for the day. Corporate Bonds (HYG) prices also declined for the day, but remains near recent highs. Silver (SILVER) and Gold (GOLD) both declined for the day. Crude Oil (CRUDEOIL1!) futures declined. Timber (WOOD), Copper (COPPER1!), and Aluminum (ALI1!) all declined for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio took a big dip to 0.647, an extreme level of optimism for investors. 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 four of the biggest mega-caps lost for the day and are trading below their 21d EMA. Microsoft (MSFT), Amazon (AMZN) and Alphabet (AMZN) are also below their 50d MA. Only Apple (APPL) remains above its 50d MA. The declining days for these stocks are on higher volume than the advancing stocks. Home Depot (HD), Facebook (FB) and Merck (MRK) were mega-caps that had good advances today. Exxon Mobil (XOM) and ASML Holdings (ASML) were among the biggest losers. Not many growth stocks advanced today. SNAP (SNAP) rose +2.61% as part of an upside reversal among communication sector stocks. Solar Edge (SEDG) dropped around -16%, along with other solar energy stocks after Tesla (TSLA) announced it will sell its own inverter. JPMorgan (JPM), Citigroup (C), Wells Fargo (WFC) all were down for the day after earnings results that beat on earnings. Citigroup and Wells Fargo beat earnings, but disappointed on revenue, raising concerns among investors for the Financial sector. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Looking ahead Markets will be closed on Monday for Martin Luther King Jr. day. There is not much economic news scheduled for Tuesday. Several more financial institutions, including Bank of America (BAC) will announce earnings on Tuesday morning. Netflix (NFLX) will announce earnings after market close. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Trends, Support and Resistance The long trend line from the 10/30 bottom point to a +2.80% gain. The five day trend line points to a gain of +1.55%. The one-day trend line points to a sideways move. If there is further downside, 13,000 seems to be holding up well for the index. The 21d EMA is nearly 2% below the index which should be an area of support if there's a further downside move. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The week ended with a change of character in the market. Although the losses in the major indexes were not substantial, the underlying characteristics changed more significantly, requiring a further look. After leading the sector list the whole week, Energy and Financials sold off today. Defensive plays of Real Estate and Utilities took the top of the sector list. Looking at the cause of the sector rotations there are a few things to consider. Energy (XLE)took a hit as the SEC announced an investigation into Exxon Mobil (XOM) asset valuations. Exxon makes up 23% of the XLE ETF I use to track the sector. Renewable Energy stocks also sold off today after Tesla announced a new invertor. Financials (XLF) dipped after Citigroup and Wells Fargo disappointed investors on revenue. I think this will be temporary as the higher treasury bond yields will eventually help revenues of these banks that base interest rates on those yields. Utilities (XLU) and Real Estate (XLRE) are bought up heading into a three-day weekend which leads to a potentially volatile week as tensions in US politics are at extreme highs. Small-caps remain strong on a weekly basis. The four biggest mega-caps are not doing well, but they are all still within a sideways volatility contraction pattern that started in September for Microsoft and Amazon, November for Alphabet. Apple is pausing in an uptrend and support has not broken down. Stay healthy and take care!
NASDAQ:IXIC
by drewby4321