Trend lines drawn from the 3/5 low (25d), 4/5 (5d) and today 4/9 (1d).
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Friday, April 9, 2021
Facts: +0.51%, Volume lower, Closing range: 97%, Body: +72%
Good: Never revisited morning low, bullish buying rest of the day
Bad: Nothing
Highs/Lows: Higher high, lower low
Candle: Bullish outside day candle with short lower wick, almost no upper wick
Advance/Decline: Two declining stocks for every advancing stocks
Indexes: SPX (+0.42%), DJI (+0.17%), RUT (+0.88%), VIX (-1.22%)
Sectors: Health (XLV +1.10%) and Industrials (XLI +0.97%) were top. Consumer Staples (XLP -0.17%) and Energy (XLE -0.66%) were bottom.
Expectation: Higher
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Market Overview
The morning producer price index numbers are a great sign for the economy as demand increases in manufactured goods indicates consumer demand. It's not a great sign if you are worried about inflation. The markets opened with a dip on the news, but quickly recovered as the dollar pulled back from the morning reaction to the news.
The Nasdaq closed the day with a rally to gain +0.51% with a closing range of 97%. Volume was lower but buyers were present throughout the day, leading to a 72% green body over a small lower wick from the morning dip. The higher high and lower low, with a high closing range, create a bullish outside candle.
The day was dominated by industrials and mega-caps as the Dow Jones Industrial average (DJI) closed at a new all-time high with a +0.89% gain. The S&P 500 (SPX) also set a record close after a +0.77% gain. The Russell 2000 (RUT) did not do as well but still was able to squeak out a gain of +0.04%.
The VIX volatility index declined -1.53%, continuing to move lower into its pre-pandemic trading range.
Health (XLV +1.10%) and Industrials (XLI +0.97%) were top. Consumer Staples (XLP -0.17%) and Energy (XLE -0.66%) were bottom. The sectors don't hold any big surprises except Energy which rose to the top of the list just after market open and quickly sank to the bottom by mid-day as the outlook for demand vs supply was mixed among investors.
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Economic Indicators
The US Dollar (DXY) rose +0.12% but was well off intraday highs driven by the inflation outlook.
The US 30y treasury bond and 10y and 2y note yields all advanced.
Both High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices both declined slightly.
Silver (SILVER) and Gold (GOLD) both declined. Crude Oil (CRUDEOIL1!) declined just slightly. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) declined. Nothing alarming in the commodities. Oil was choppy intraday as analysts tried to figure out the supply and demand outlook.
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Investor Sentiment
The put/call ratio ended the day at 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.
The CNN Fear & Greed index is remained about the same, on the greed side.
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Market Leaders
The big four mega-caps continue to rise. Apple (AAPL) gained +2.02% and Amazon (AMZN) gained +2.21%. Both are moving toward their 21d EMA crossing above the 50d MA to solidify the uptrend. Microsoft (MSFT) and Alphabet (GOOGL) already met that milestone and gained +1.03% and 0.90% for the day.
United Health (UNH) topped the mega-cap list helping the Health services sector lead for the day. Salesforce.com (CRM), Amazon (AMZN) and Apple (AAPL) round out the top performing mega-caps. As the bottom of the list were Alibaba (BABA), Comcast (CMCSA), Johnson & Johnson (JNJ) and Tesla (TSLA).
Moderna (MRNA) topped the growth stock list that is about half-and-half gainers and losers. UP Fintech (TIGR), Chewy (CHWY) and Palantir (PLTR) also were at the top of the list. Peloton (PTON), Beyond Meat (BYND), Snowflake (SNOW) and Zoom Video (ZM) were at the bottom of the list.
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Looking ahead
Monday will kick-off next week with a 10-year Treasury Note Auction in the afternoon.
Earnings reports will start to pick up next week, but there are no notable earnings for the daily update on Monday or Tuesday.
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Trends, Support and Resistance
The index is inching toward the 14,000 support/resistance area. A breakthrough of that line will be a confidence booster on the way to new all-time highs for the Nasdaq.
The five-day and one-day trend lines point to a +0.34% gain on Monday.
The trend line from the 3/5 low points to a -1.91% loss.
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Wrap-up
The day was for the large/mega caps and industrials. Some mid-cap growth stocks also did well. The Russell 2000 and small-caps seemed to give back are consolidating in a bullish symmetric triangle. We can expect the index to eventually breakout and join the other indexes if the market continues upward.
I'm confident it will follow the market trend, but the question will be at what pace. The small cap index was on a tear from September to March, outperforming everything, but pulled back with the recent rotations. Will it pick back up the previous pace or will it underperform the other indexes.
Stay healthy and trade safe!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, April 9, 2021
Facts: +0.51%, Volume lower, Closing range: 97%, Body: +72%
Good: Never revisited morning low, bullish buying rest of the day
Bad: Nothing
Highs/Lows: Higher high, lower low
Candle: Bullish outside day candle with short lower wick, almost no upper wick
Advance/Decline: Two declining stocks for every advancing stocks
Indexes: SPX (+0.42%), DJI (+0.17%), RUT (+0.88%), VIX (-1.22%)
Sectors: Health (XLV +1.10%) and Industrials (XLI +0.97%) were top. Consumer Staples (XLP -0.17%) and Energy (XLE -0.66%) were bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The morning producer price index numbers are a great sign for the economy as demand increases in manufactured goods indicates consumer demand. It's not a great sign if you are worried about inflation. The markets opened with a dip on the news, but quickly recovered as the dollar pulled back from the morning reaction to the news.
The Nasdaq closed the day with a rally to gain +0.51% with a closing range of 97%. Volume was lower but buyers were present throughout the day, leading to a 72% green body over a small lower wick from the morning dip. The higher high and lower low, with a high closing range, create a bullish outside candle.
The day was dominated by industrials and mega-caps as the Dow Jones Industrial average (DJI) closed at a new all-time high with a +0.89% gain. The S&P 500 (SPX) also set a record close after a +0.77% gain. The Russell 2000 (RUT) did not do as well but still was able to squeak out a gain of +0.04%.
The VIX volatility index declined -1.53%, continuing to move lower into its pre-pandemic trading range.
Health (XLV +1.10%) and Industrials (XLI +0.97%) were top. Consumer Staples (XLP -0.17%) and Energy (XLE -0.66%) were bottom. The sectors don't hold any big surprises except Energy which rose to the top of the list just after market open and quickly sank to the bottom by mid-day as the outlook for demand vs supply was mixed among investors.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) rose +0.12% but was well off intraday highs driven by the inflation outlook.
The US 30y treasury bond and 10y and 2y note yields all advanced.
Both High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices both declined slightly.
Silver (SILVER) and Gold (GOLD) both declined. Crude Oil (CRUDEOIL1!) declined just slightly. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) declined. Nothing alarming in the commodities. Oil was choppy intraday as analysts tried to figure out the supply and demand outlook.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio ended the day at 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.
The CNN Fear & Greed index is remained about the same, on the greed side.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The big four mega-caps continue to rise. Apple (AAPL) gained +2.02% and Amazon (AMZN) gained +2.21%. Both are moving toward their 21d EMA crossing above the 50d MA to solidify the uptrend. Microsoft (MSFT) and Alphabet (GOOGL) already met that milestone and gained +1.03% and 0.90% for the day.
United Health (UNH) topped the mega-cap list helping the Health services sector lead for the day. Salesforce.com (CRM), Amazon (AMZN) and Apple (AAPL) round out the top performing mega-caps. As the bottom of the list were Alibaba (BABA), Comcast (CMCSA), Johnson & Johnson (JNJ) and Tesla (TSLA).
Moderna (MRNA) topped the growth stock list that is about half-and-half gainers and losers. UP Fintech (TIGR), Chewy (CHWY) and Palantir (PLTR) also were at the top of the list. Peloton (PTON), Beyond Meat (BYND), Snowflake (SNOW) and Zoom Video (ZM) were at the bottom of the list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Monday will kick-off next week with a 10-year Treasury Note Auction in the afternoon.
Earnings reports will start to pick up next week, but there are no notable earnings for the daily update on Monday or Tuesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index is inching toward the 14,000 support/resistance area. A breakthrough of that line will be a confidence booster on the way to new all-time highs for the Nasdaq.
The five-day and one-day trend lines point to a +0.34% gain on Monday.
The trend line from the 3/5 low points to a -1.91% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The day was for the large/mega caps and industrials. Some mid-cap growth stocks also did well. The Russell 2000 and small-caps seemed to give back are consolidating in a bullish symmetric triangle. We can expect the index to eventually breakout and join the other indexes if the market continues upward.
I'm confident it will follow the market trend, but the question will be at what pace. The small cap index was on a tear from September to March, outperforming everything, but pulled back with the recent rotations. Will it pick back up the previous pace or will it underperform the other indexes.
Stay healthy and trade safe!
