Daily Market Update for 3/26
Trend lines drawn from the 3/5 low (16d), 3/22 (5d) and today 3/26 (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, March 26, 2021
Facts: +1.24%, Volume higher, Closing range: 96%, Body: +53%
Good: Rally in afternoon to close near intraday high
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Thick green body with a long lower wick, very small upper wick
Advance/Decline: More than one advancing stock for every declining stock
Indexes: SPX (+1.66%), DJI (+1.39%), RUT (+1.76%), VIX (-4.80%)
Sectors: Technology (XLK +2.54%) and Materials (XLB +2.48%) were top. Utilities (XLU +0.33%) and Communications (XLC -1.09%) were bottom.
Expectation: Higher
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Market Overview
A late afternoon rally in the market closed the week with a positive day for all the major indexes. It's not clear what caused the sudden late afternoon rally. It could just be expiring options activity, or it could be investors outlook of the economy improving. Morning economic data was mixed, but the personal income numbers and consumer sentiment showed the possibility of an upcoming rise in spending. Data from UK and Germany was also positive on their economies.
The Nasdaq closed the day with a +1.24% gain on higher volume. The closing range of 96% with a 53% green body over a long lower wick was enough to get a higher high on top of a higher low. The higher high and higher low with more volume than the previous day is a great indicator of strength. There were more advancing stocks than declining stocks.
The S&P 500 (SPX) rallied +1.66% to its all-time highest close. The Dow Jones Industrial (DJI) was nearing all-time highs when it closed the day with a +1.39% gain. The Russell 2000 (RUT) had its second day of gains, advancing 1.76%.
The VIX volatility index declined -4.80%.
The top sectors were Technology (XLK +2.54%) and Materials (XLB +2.48%). Communications (XLC -1.09%) was the only sector to have losses for the day.
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Economic Indicators
The US Dollar (DXY) declined -0.05%.
The US 30y treasury bond and 10y and 2y note yields all rose for the day.
High Yield Corporate Bonds (HYG) prices rose while Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) declined slightly while Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced, as the price becomes more volatile due to the Suez Canal blockage. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) advanced.
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Investor Sentiment
The put/call ratio stayed nearly even at 0.753. 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 moved back to neutral.
The NAAIM Exposure index is back down to 57.52.
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Market Leaders
Of the four largest mega-caps, only Alphabet (GOOGL) declined for the day, losing -0.38% and closing below its 21d EMA. Apple (AAPL) and Amazon (AMZN) both advanced but remain below their 21d EMA and 50d MA lines. Microsoft (MSFT) took back both its 21d EMA and 50d MA as it advanced +1.78% for the day.
ASML Holding (ASML), Taiwan Semiconductor (TSM), Intel (INTC) and Cisco (CSCO) were the top mega-cap gainers for the day, all advancing more than 4%. Tesla (TSLA), Comcast (CMCSA), Walt Disney (DIS) and Alphabet were at the bottom of the list.
Growth stocks had some winners and some losers. RH (RH) was at the top of the list with a +9.28% gain. ServiceNow (NOW), Dr Horton (DHI), JD.Com (JD) all had more than 4% gains. Still some growth stocks like GrowGeneration (GRWG), DraftKings (DKNG) did not rally on the day. UP Fintech (TIGR) dropped -11.93% after releasing earnings before market open.
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Looking ahead
Next week will be a four-day trading week with markets closed on Good Friday.
There is not much economic news scheduled for Monday.
There are also no notable earnings reports for the Daily Update.
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Trends, Support and Resistance
The index rallied back above the 13,000 support area in the last hour of trading.
The trend line from the 3/5 low points to a +0.65% gain for Monday, which is back above the 21d EMA.
The one-day trend line points to a -2.11% loss. The final hour rally was not enough to move the trend line built up the rest of the day.
The five-day trend line points to a -2.91% loss.
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Wrap-up
The rally late on Friday was a welcome site. It may have been options related or it may have been investors finally absorbing the positive economic news from US, UK and Germany. Either way, I want to see a follow through on Monday with higher volume.
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.
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Friday, March 26, 2021
Facts: +1.24%, Volume higher, Closing range: 96%, Body: +53%
Good: Rally in afternoon to close near intraday high
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Thick green body with a long lower wick, very small upper wick
Advance/Decline: More than one advancing stock for every declining stock
Indexes: SPX (+1.66%), DJI (+1.39%), RUT (+1.76%), VIX (-4.80%)
Sectors: Technology (XLK +2.54%) and Materials (XLB +2.48%) were top. Utilities (XLU +0.33%) and Communications (XLC -1.09%) were bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
A late afternoon rally in the market closed the week with a positive day for all the major indexes. It's not clear what caused the sudden late afternoon rally. It could just be expiring options activity, or it could be investors outlook of the economy improving. Morning economic data was mixed, but the personal income numbers and consumer sentiment showed the possibility of an upcoming rise in spending. Data from UK and Germany was also positive on their economies.
The Nasdaq closed the day with a +1.24% gain on higher volume. The closing range of 96% with a 53% green body over a long lower wick was enough to get a higher high on top of a higher low. The higher high and higher low with more volume than the previous day is a great indicator of strength. There were more advancing stocks than declining stocks.
The S&P 500 (SPX) rallied +1.66% to its all-time highest close. The Dow Jones Industrial (DJI) was nearing all-time highs when it closed the day with a +1.39% gain. The Russell 2000 (RUT) had its second day of gains, advancing 1.76%.
The VIX volatility index declined -4.80%.
The top sectors were Technology (XLK +2.54%) and Materials (XLB +2.48%). Communications (XLC -1.09%) was the only sector to have losses for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.05%.
The US 30y treasury bond and 10y and 2y note yields all rose for the day.
High Yield Corporate Bonds (HYG) prices rose while Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) declined slightly while Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced, as the price becomes more volatile due to the Suez Canal blockage. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio stayed nearly even at 0.753. 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 moved back to neutral.
The NAAIM Exposure index is back down to 57.52.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Of the four largest mega-caps, only Alphabet (GOOGL) declined for the day, losing -0.38% and closing below its 21d EMA. Apple (AAPL) and Amazon (AMZN) both advanced but remain below their 21d EMA and 50d MA lines. Microsoft (MSFT) took back both its 21d EMA and 50d MA as it advanced +1.78% for the day.
ASML Holding (ASML), Taiwan Semiconductor (TSM), Intel (INTC) and Cisco (CSCO) were the top mega-cap gainers for the day, all advancing more than 4%. Tesla (TSLA), Comcast (CMCSA), Walt Disney (DIS) and Alphabet were at the bottom of the list.
Growth stocks had some winners and some losers. RH (RH) was at the top of the list with a +9.28% gain. ServiceNow (NOW), Dr Horton (DHI), JD.Com (JD) all had more than 4% gains. Still some growth stocks like GrowGeneration (GRWG), DraftKings (DKNG) did not rally on the day. UP Fintech (TIGR) dropped -11.93% after releasing earnings before market open.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Next week will be a four-day trading week with markets closed on Good Friday.
There is not much economic news scheduled for Monday.
There are also no notable earnings reports for the Daily Update.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index rallied back above the 13,000 support area in the last hour of trading.
The trend line from the 3/5 low points to a +0.65% gain for Monday, which is back above the 21d EMA.
The one-day trend line points to a -2.11% loss. The final hour rally was not enough to move the trend line built up the rest of the day.
The five-day trend line points to a -2.91% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The rally late on Friday was a welcome site. It may have been options related or it may have been investors finally absorbing the positive economic news from US, UK and Germany. Either way, I want to see a follow through on Monday with higher volume.
Stay healthy and trade safe!
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