Trend lines drawn from the 3/5 low (7d), 3/9 (5d) and today 3/15 (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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Monday, March 15, 2021
Facts: +1.05%, Volume higher, Closing range: 100%, Body: 73%
Good: Close above last week's high and back above 50d MA
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: No upper wick, most green body over lower wick
Advance/Decline: About even advancing and declining stocks
Indexes: SPX (+0.65%), DJI (+0.53%), RUT (+0.31%), VIX (-3.19%)
Sectors: Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were top. Financials (XLF -0.58%) and Energy (XLE -1.14%)
Expectation: Sideways or Higher
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Market Overview
It was a relatively smooth start to the week as bond yields stayed fairly tame compared to previous weeks. That allowed the tech heavy Nasdaq to continue a rally to catch up with the other indexes. There is still more catchup to do as the S&P 500, Dow Jones Industrial average and Russell 2000 set new all-time highs.
After a brief test of the 21d EMA line, the Nasdaq rallied into close for a +1.05% gain on higher volume. The volume increased as the index moved up in the last 30 minutes of trading to end the day with a 100% closing range. The 73% green body is above a lower wick formed from some selling before noon. There were about the same number of advancing stocks as declining stocks.
The S&P 500 (SPX) gained +0.65%. The Dow Jones Industrial (DJI) had an early morning rally that sold off, but then was able to recover and close the day with +0.53% gains. The Russell 2000 (RUT) closed the day with a +0.31% advance, but only after visiting intraday lows twice in a choppy session
The VIX volatility index declined -3.19%.
Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were the top sectors. Utilities (XLU) was near the top of the sector list last week during the back and forth rotation. Financials (XLF -0.58%) and Energy (XLE -1.14%) were at the bottom of the list for today.
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Economic Indicators
The US Dollar (DXY) gained +0.16%.
We will continue to watch treasury bond yields today. The US 30y and 10y treasury bond yields declined slightly while the 2y yield increased, helping to flatten the curve a bit. However the yield curve remains steep.
High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both increased for another day.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) pulled back from highs. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio is at 0.523. 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 moving back toward the greed level.
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Market Leaders
Keeping this update brief during vacation, but keep an eye on the mega-caps as they influence the indexes.
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Looking ahead
Retail Sales data will be released Tuesday before market open. Industrial Production data will also be released, both indicating the pace at which economic activity is recovering.
Volkswagen (VWAGY) will report earnings on Tuesday. In addition, FUTU Holdings (FUTU), Coupa Software (COUP), Jabil Circuit (JBL), Eastman Kodak (KODK) will report.
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Trends, Support and Resistance
The index moved back above the 50d MA which should provide some support.
The trend line from the 3/5 bottom points to a +0.97% gain while the five-day and one-day trends lines point to a +0.26% gain.
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Wrap-up
Bond investors have calmed a bit, allowing the longer term bond yields to settle a big. I'll be keeping a close eye on the yields for the coming week at they are having a big influence on tech and growth stocks, which impacts the Nasdaq.
The expectation for tomorrow is for sideways or higher. If the index can follow-through with the expectation, it can start to work toward the all-time high.
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=-
Monday, March 15, 2021
Facts: +1.05%, Volume higher, Closing range: 100%, Body: 73%
Good: Close above last week's high and back above 50d MA
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: No upper wick, most green body over lower wick
Advance/Decline: About even advancing and declining stocks
Indexes: SPX (+0.65%), DJI (+0.53%), RUT (+0.31%), VIX (-3.19%)
Sectors: Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were top. Financials (XLF -0.58%) and Energy (XLE -1.14%)
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
It was a relatively smooth start to the week as bond yields stayed fairly tame compared to previous weeks. That allowed the tech heavy Nasdaq to continue a rally to catch up with the other indexes. There is still more catchup to do as the S&P 500, Dow Jones Industrial average and Russell 2000 set new all-time highs.
After a brief test of the 21d EMA line, the Nasdaq rallied into close for a +1.05% gain on higher volume. The volume increased as the index moved up in the last 30 minutes of trading to end the day with a 100% closing range. The 73% green body is above a lower wick formed from some selling before noon. There were about the same number of advancing stocks as declining stocks.
The S&P 500 (SPX) gained +0.65%. The Dow Jones Industrial (DJI) had an early morning rally that sold off, but then was able to recover and close the day with +0.53% gains. The Russell 2000 (RUT) closed the day with a +0.31% advance, but only after visiting intraday lows twice in a choppy session
The VIX volatility index declined -3.19%.
Consumer Discretionary (XLY +1.34%) and Utilities (XLU +1.28%) were the top sectors. Utilities (XLU) was near the top of the sector list last week during the back and forth rotation. Financials (XLF -0.58%) and Energy (XLE -1.14%) were at the bottom of the list for today.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) gained +0.16%.
We will continue to watch treasury bond yields today. The US 30y and 10y treasury bond yields declined slightly while the 2y yield increased, helping to flatten the curve a bit. However the yield curve remains steep.
High Yield Corporate Bonds (HYG) and Investment Grade Corporate Bond (LQD) both increased for another day.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) pulled back from highs. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio is at 0.523. 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 moving back toward the greed level.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Keeping this update brief during vacation, but keep an eye on the mega-caps as they influence the indexes.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Retail Sales data will be released Tuesday before market open. Industrial Production data will also be released, both indicating the pace at which economic activity is recovering.
Volkswagen (VWAGY) will report earnings on Tuesday. In addition, FUTU Holdings (FUTU), Coupa Software (COUP), Jabil Circuit (JBL), Eastman Kodak (KODK) will report.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index moved back above the 50d MA which should provide some support.
The trend line from the 3/5 bottom points to a +0.97% gain while the five-day and one-day trends lines point to a +0.26% gain.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Bond investors have calmed a bit, allowing the longer term bond yields to settle a big. I'll be keeping a close eye on the yields for the coming week at they are having a big influence on tech and growth stocks, which impacts the Nasdaq.
The expectation for tomorrow is for sideways or higher. If the index can follow-through with the expectation, it can start to work toward the all-time high.
Stay healthy and trade safe!
