Trend lines drawn from the 10/30 bottom (43d), 12/24 (5d) and today 12/31 (1d).
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog.
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Thursday, December 31, 2020
Sun, sun, sun, here it comes
Facts: +0.14%, Volume higher, Closing range: 83%, Body: 14%
Good: Close high in the day's range
Bad: LH/LL, spent long time near lows
Highs/Lows: Lower high, lower low
Candle: Indecisive candle with a longer lower wick
Advance/Decline: 0.86, more declining than advancing stocks
Sectors: Utilities (XLU +1.49%), Financials (XLF +1.24%) at the top. Energy (XLE -0.84%) is the only losing sector.
Expectation: Sideways or Higher
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Market Overview
The last trading day of 2020, finished a week of sideways movement in the market with an indecisive day. The body of only 14% shows the close is not very far above the open. The index closed with a 0.14% gain and a closing range of 83%. Volume was slightly higher than the previous day. There were more declining stocks than advancing stocks.
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Indexes and Sectors
The S&P 500 (SPX +0.64%) and Dow Jones Industrial (DJI +0.65%) set new all-time highs to end the year while the Russell 2000 (RUT -0.26%) continued a year-end pullback.
Utilities (XLU +1.49%) and Financials (XLF +1.24%) led the sectors, with Utilities getting a big boost at the end of the day as a defensive play going into a long weekend. Energy (XLE -0.84%) was the only losing sector for the day.
The VIX volatility index declined by -0.09%.
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Market Indicators
Yields declined on US 30y, 10y and 2y treasury bonds. The spread between long term and short term bonds tightened slightly.
Corporate bond prices (HYG +0.08%) rose for the day, tightening the yield spread with short term bonds (IEI +0.04%).
The US dollar (DXY +0.29%) rose for the day.
Silver (SILVER -0.99%) declined while Gold (GOLD +0.19%) advanced for the day. Crude Oil futures (CRUDEOIL1! +0.17%) rose. Timber (WOOD -0.53%) declined. Copper (COPPER1! -0.88%) and Aluminum (ALI1! -1.70%) declined.
The put/call ratio rose to 0.688. 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.
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Market Leaders
Microsoft (MSFT +0.33%) and Alphabet (GOOGL +0.94%) advanced for the day while Apple (AAPL -0.77%) and Amazon (AMZN -0.88%) declined. Alphabet closed above its 21d EMA. All four biggest mega-caps are trading above the key moving averages.
Top performing mega-caps included Netflix (NFLX +3.08%), Comcast (CMCSA +2.32%), Intel (INTC +2.19%) and UnitedHealth Group (UNH +0.44%).
Some growth stocks did well on the last day of the year, but most had declines. Tesla (TSLA +1.57%), Zynga (ZNGA +1.54%), SNAP (SNAP +1.46%) and PayPal (PYPL +1.16%) were among the top performers. Fastly (FSLY -3.38%), Zoom Video (ZM -4.55%), Draft Kings (DKNG -4.88%) and Fiverr (FVRR -5.02%) had big declines.
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Looking ahead
Monday will be the first trading day of 2021. An OPEC meeting will open the week. Manufacturing PMI data will be released just after markets open. Later in the morning, FOMC Member Bostic will make public comments. The afternoon will bring updates on speculative positions for several commodities.
No notable earnings announcements are scheduled for Monday.
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Trends, Support and Resistance
The long-term trend line from the 10/30 bottom points to a +1.20% gain
The five-day trend and one-day trend lines point to a small loss of -0.13%.
As the calendar turns over to the new year, market sentiment may change as well. If the index moves down, there seems to be a support level from 12,750 to 12,800 where the index can pause during a pullback. The previous support level is around 12,500.
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Wrap-up
The market did not really move much this week. The weekly candle is an indecisive spinning top where the top and bottom wicks are similar in length, while the body is thin with the closing price for the week being very near the open.
The next week will bring some uncertainty around the elections in Georgia and the drama of the electoral vote confirmation in congress. Keep to your trading rules to avoid overreacting to news.
The index will pass 200 trading days since the March bottom this week. That will soon bring the popular 200d moving average much closer to current prices. It's currently 18% below the index. Having the 200d moving average in play, will be another area of support/resistance as the market moves into 2021.
Stay healthy and take care!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, December 31, 2020
Sun, sun, sun, here it comes
Facts: +0.14%, Volume higher, Closing range: 83%, Body: 14%
Good: Close high in the day's range
Bad: LH/LL, spent long time near lows
Highs/Lows: Lower high, lower low
Candle: Indecisive candle with a longer lower wick
Advance/Decline: 0.86, more declining than advancing stocks
Sectors: Utilities (XLU +1.49%), Financials (XLF +1.24%) at the top. Energy (XLE -0.84%) is the only losing sector.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The last trading day of 2020, finished a week of sideways movement in the market with an indecisive day. The body of only 14% shows the close is not very far above the open. The index closed with a 0.14% gain and a closing range of 83%. Volume was slightly higher than the previous day. There were more declining stocks than advancing stocks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The S&P 500 (SPX +0.64%) and Dow Jones Industrial (DJI +0.65%) set new all-time highs to end the year while the Russell 2000 (RUT -0.26%) continued a year-end pullback.
Utilities (XLU +1.49%) and Financials (XLF +1.24%) led the sectors, with Utilities getting a big boost at the end of the day as a defensive play going into a long weekend. Energy (XLE -0.84%) was the only losing sector for the day.
The VIX volatility index declined by -0.09%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
Yields declined on US 30y, 10y and 2y treasury bonds. The spread between long term and short term bonds tightened slightly.
Corporate bond prices (HYG +0.08%) rose for the day, tightening the yield spread with short term bonds (IEI +0.04%).
The US dollar (DXY +0.29%) rose for the day.
Silver (SILVER -0.99%) declined while Gold (GOLD +0.19%) advanced for the day. Crude Oil futures (CRUDEOIL1! +0.17%) rose. Timber (WOOD -0.53%) declined. Copper (COPPER1! -0.88%) and Aluminum (ALI1! -1.70%) declined.
The put/call ratio rose to 0.688. 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
Microsoft (MSFT +0.33%) and Alphabet (GOOGL +0.94%) advanced for the day while Apple (AAPL -0.77%) and Amazon (AMZN -0.88%) declined. Alphabet closed above its 21d EMA. All four biggest mega-caps are trading above the key moving averages.
Top performing mega-caps included Netflix (NFLX +3.08%), Comcast (CMCSA +2.32%), Intel (INTC +2.19%) and UnitedHealth Group (UNH +0.44%).
Some growth stocks did well on the last day of the year, but most had declines. Tesla (TSLA +1.57%), Zynga (ZNGA +1.54%), SNAP (SNAP +1.46%) and PayPal (PYPL +1.16%) were among the top performers. Fastly (FSLY -3.38%), Zoom Video (ZM -4.55%), Draft Kings (DKNG -4.88%) and Fiverr (FVRR -5.02%) had big declines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Monday will be the first trading day of 2021. An OPEC meeting will open the week. Manufacturing PMI data will be released just after markets open. Later in the morning, FOMC Member Bostic will make public comments. The afternoon will bring updates on speculative positions for several commodities.
No notable earnings announcements are scheduled for Monday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The long-term trend line from the 10/30 bottom points to a +1.20% gain
The five-day trend and one-day trend lines point to a small loss of -0.13%.
As the calendar turns over to the new year, market sentiment may change as well. If the index moves down, there seems to be a support level from 12,750 to 12,800 where the index can pause during a pullback. The previous support level is around 12,500.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The market did not really move much this week. The weekly candle is an indecisive spinning top where the top and bottom wicks are similar in length, while the body is thin with the closing price for the week being very near the open.
The next week will bring some uncertainty around the elections in Georgia and the drama of the electoral vote confirmation in congress. Keep to your trading rules to avoid overreacting to news.
The index will pass 200 trading days since the March bottom this week. That will soon bring the popular 200d moving average much closer to current prices. It's currently 18% below the index. Having the 200d moving average in play, will be another area of support/resistance as the market moves into 2021.
Stay healthy and take care!
