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Market Week in Review - 9/13/2021 - 9/17/2021Summary: Positive economic news couldn't break through the September blues, making for a choppy week in the markets. Investors are balancing good economic data with the possibility that Fed may start bond tapering soon. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, September 13, 2021 Facts: -0.07%, Volume higher, Closing Range: 40%, Body: 57% Red Good: Closed above the 21d EMA Bad: Two dips below 21d EMA, couldn't hold intraday high at open Highs/Lows: Lower high, Lower low Candle: Red body in upper half of candle with a long lower wick Advance/Decline: 0.73, more declining than advancing Indexes: SPX (+0.23%), DJI (+0.76%), RUT (+0.59%), VIX (-7.54%) Sector List: Energy (XLE +2.87%) and Financials (XLF +1.14%) at the top. Utilities (XLU -0.18%) and Health (XLV -0.62%) at the bottom. Expectation: Sideways or Lower The OPEC Monthly Report provided a positive outlook for the economy, stating that oil demand would exceed pre-pandemic levels next year. That sent oil futures and the Energy sector higher and turned investors more optimistic on value stocks and the re-opening trade. The Nasdaq closed the day with a -0.07% decline. Volume was higher than the previous day. The index started with a gain but quickly sold as investors rotated out of growth stocks and back into value stocks. The Nasdaq dipped below its 21d exponential moving average twice but was able to close above the line. The closing range of 40% is under a red body that covers more than half of the candle. There is a long lower wick with a tiny upper wick. More stocks declined than advanced on the Nasdaq. Notably, there were two advancing stocks for every declining stock on the New York Stock Exchange. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, September 14, 2021 Facts: -0.45%, Volume lower, Closing Range: 17%, Body: 76% Red Good: Support above 15,000 Bad: Mostly red body, lower high, lower low. a/d ratio Highs/Lows: Lower high, Lower low Candle: Mostly red body with small upper and lower wicks Advance/Decline: 0.28, more than three declining stocks for every advancing stock Indexes: SPX (-0.57%), DJI (-0.84%), RUT (-1.37%), VIX (+0.46%) Sector List: Health (XLV -0.02%) and Technology (XLK -0.13%) at the top. Financials (XLF -1.34%) and Energy (XLE -1.44%) at the bottom. Expectation: Lower US Treasury Yields slid after the morning's consumer price index data added more confusion to the economic picture. Is lower than expected inflation a good thing or a bad thing? What does it mean for Fed monetary policy? The unanswered questions equate to risk for investors, sending them to safer bets. The Nasdaq closed with a -0.45% decline. Volume was lower than the previous day. The 76% red body represents a bearish day ending with the closing range of 17%. There were more than three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, September 15, 2021 Facts: +0.82%, Volume lower, Closing Range: 93%, Body: 48% Green Good: Support at 15,000 sent started a rally into afternoon Bad: Could not break above yesterday's high Highs/Lows: Lower high, Lower low Candle: Long lower wick formed from morning sell, green upper body Advance/Decline: 1.31, more advancing than declining stocks Indexes: SPX (+0.85%), DJI (+0.68%), RUT (+1.11%), VIX (-6.58%) Sector List: Energy (XLE +3.74%) and Industrials (XLI +1.10%) at the top. Consumer Staples (XLP +0.36%) and Utilities (XLU -0.13%) at the bottom. Expectation: Sideways or Higher Stocks rose on Wednesday after Crude Oil supplies signaled much higher demand than expected. That boosted the Energy sector by more than 3.5%, and the improved optimism drove broad gains across the market. The Nasdaq gained +0.82% for the day after getting support at 15,000 in the morning. The 48% green body led to a 93% closing range. Volume was lower than the previous day, and there were more advancing stocks than declining stocks. The index could not break yesterday's high, so it is still in a downtrend, but the long lower wick formed from the bounce off 15,000 led to a rally in that afternoon that has potential. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, September 16, 2021 Facts: +0.13%, Volume lower, Closing Range: 85%, Body: 39% Green Good: Higher high, good closing range Bad: Dip below 21d EMA, low A/D ratio Highs/Lows: Higher high, Higher low Candle: Short body in upper half of candle, long lower wick Advance/Decline: 0.81, more declining than advancing stocks Indexes: SPX (-0.16%), DJI (-0.18%), RUT (-0.07%), VIX (+2.81%) Sector List: Consumer Discretionary (XLY +0.46%) and Real Estate (XLRE +0.19%) at the top. Materials (XLB -1.08%) and Energy (XLE -1.13%) at the bottom. Expectation: Sideways Better than expected Retail Sales data help the Consumer Discretionary sector advance to the top of the sector list. However, rising Treasury Yields subdued other sectors and sent three of the four major indexes to losses for the day. The Nasdaq closed the day with a +0.13% gain after dipping in the morning. The 39% green body is in the upper half of the candle, with a long lower wick representing the morning decline. After hitting the intraday low, the index rose through the afternoon to end with an 85% closing range. Volume was lower than the previous day, and there were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, September 17, 2021 Facts: -0.91%, Volume higher, Closing Range: 27%, Body: 71% Red Good: Support at 15,000 Bad: Close below 21d EMA, lower high Highs/Lows: Lower high, Lower low Candle: Mostly red body with a small lower wick Advance/Decline: 0.82, more declining stocks than advancing stocks Indexes: SPX (-0.91%), DJI (-0.48%), RUT (+0.18%), VIX (+11.34%) Sector List: Health (XLV +0.10%) and Consumer Discretionary (XLY -0.35%) at the top. Technology (XLK -1.56%) and Materials (XLB -2.06%) at the bottom. Expectation: Sideways or Lower Indexes closed lower while volume soared on quadruple-witching Friday. Only the Russell 2000 was able to end the day with gains. The Nasdaq moved back below its 21d EMA with a -0.91% decline today. Volume was more than 50% over average daily volume due to index and stock options expiration. The candle is primarily red body with a small lower wick. The closing range of 27% came after a rally before close. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week Positive economic news couldn't break through the September blues, making for a choppy week in the markets. Investors are balancing good economic data with the possibility that Fed may start bond tapering soon. The week opened with the OPEC monthly report stating that oil demand will meet or exceed pre-pandemic levels by next year. That was a more robust outlook for oil and translates to a better global economic outlook. The new optimism focused investors on value and reopening stocks. As the week progressed, however, the better economic data for the US raised expectations that the Fed would begin tapering bond purchasing soon. While inflation data on Tuesday was slightly below forecasts, it was still high. Retail sales data on Wednesday was better than forecast and Crude Oil inventories on Thursday showed higher demand than expected. After Treasury Yields dipped on Monday and Tuesday, they turned sharply higher through the rest of the week. The US Dollar also strengthened significantly on Thursday and Friday, with the DXY dollar index climbing +0.84% over the two days. The next Fed meeting comes next week and investors are positioning for the news on bond tapering. Equities continue to slump as investors focus on specific safe bets and value stocks. The Advance/Decline ratio for the Nasdaq has only been above 1.0 once in the past ten trading days. However, there has not been a rotation into defensive sectors. Utilities declined 3% this week. The past two weeks looks more like a typical September slump than the start of a correction. The Nasdaq declined -0.47% for the week. Volume was higher than the previous week because of a spike in volume on quadruple-witching Friday. The closing range is 26%, the second week in a row of low closing range. Small-caps in the Russell 2000 (RUT) outperformed this week, advancing +0.42% and ending the week with a 74% closing range. The Dow Jones Industrial Average (DJI) lost only -0.07% for the week. The S&P 500 (SPX) declined -0.57%. The VIX volatility index declined -0.67%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Sectors Energy ( XLE ) topped the sector list this week after the OPEC Monthly Report on Monday projected that demand for oil would exceed pre-pandemic levels by next year. The sector also got a boost from Crude Oil Inventories data released on Wednesday that showed much higher demand than expected. Consumer Discretionary ( XLY ) moved into second place after great Retail Sales data on Thursday. Utilities ( XLU ) and Materials ( XLB ) were the bottom two sectors for the week. Although markets were lower this week, investors did not flee to defensive sectors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) advanced +0.65% for the week. US Treasuries 30y yield declined for the week. The 10y and 2y yield both rose. The 2y yield also rose. The 30/5 spread declined for a second week. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices advanced for the week. Silver and Gold fell for another week. Crude Oil rose for the week on a improved outlook from OPEC and better than expected demand in Crude Oil inventories deata. Timber declined for the week. Copper and Aluminum futures declined this week after big moves last week. Aluminum is still near record highs. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) bounced up and down this week, ending the week at 0.747. The CNN Fear & Greed Index moved back to Fear and is approaching Extreme Fear. The NAAIM money manager exposure index rose to 87.02 from 84.68 the previous week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Microsoft (MSFT) had an all-time record close on Thursday before selling off on Friday. The stock is up +1.41% for the week and trading above key moving average lines. Amazon (AMZN) and Alphabet (GOOGL) declined this week but remain above their 10w and 40w moving average lines. Apple (AAPL) moved below its 10w moving average line with a -1.95% decline this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency Bitcoin (BTCUSD) was the only of the four cryptocurrency to gain for the week, advancing +2.68%. Litecoin (LTCUSD) soared on fake news that Walmart would establish a relationship with the digital currency. The gains were quickly given back after Walmart acknowledges the news was false. The currency ended the week with a -3.94% decline. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday There is not much economic news scheduled for Monday. Watch for news on the $3.5 trillion budget that will include a corporate tax hike. There are no relevant earnings reports for Monday. Tuesday Building Permits and Housing Starts data will be available on Tuesday. Adobe (ADBE), FedEx (FDX) and AutoZone (AZO) are earnings reports to watch out for on Tuesday. Wednesday US Existing Home Sales data and Crude Oil Inventories updates come in the morning. The Bank of Japan will make a Monetary Policy Statement overnight. Nothing is more important this week than the Fed meeting and the statements to be made at 2p on economic projects and interest rate decisions. Investors are looking for statements on when bond tapering will begin. General Mills will release earnings on Wednesday. Thursday Initial Jobless Claims data will be available on Thursday. Manufacturing and Services PMI will give an indication on economic activity. Nike (NKE), Accenture (CAN), and Costco (COST) will release earnings on Thursday. Friday New Home Sales data becomes available after the market opens on Friday morning. The Fed's Jerome Powell is scheduled to speak at 10a on Friday morning. Friday's earning reports include Carnival Corp (CCL). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Economic data this past week shows that despite a soaring number of COVID cases in the US, the economy continued to march forward. Retail sales data in August was higher than expected, showing positive signs of growth for the US. And the forecast from OPEC is a continuing rise in demand for oil, providing an optimistic outlook for the global economy. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Although the data is a positive sign for the economy, the equities markets may react in a very different way. Bond tapering signals and end to easy money policy and the path toward higher interest rates. In addition, investors are bracing for the $3.5 trillion budget passing with an increase in corporate taxes. Despite the potential for growth in the economy, high valuations in the S&P 500 and Nasdaq will need to correct for all these headwinds. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq closed below its 21d EMA, but found support at 15,000 during several dips. If support at 15,000 is broke, there is another 1% to 2.5% drop before an additional support area created by trading in July and August. It's easier to see on the QQQ chart, with a volume profile. On the positive side, the levels are: The 10d moving average is at 15,191.90. This week's high is at 15,215.44. The all-time high is at 15,403.44. The index met several days of resistance around 15,400. 15,500 may be the next area of resistance. On the downside, there are a few key levels: The 21d EMA is at 15,090.88. 15,000 is an area of support, tested several times this week. The low of the week is 14,984.68, just below Friday's close. The 50d MA is at 14,875.47. 14,423.16 is the low of the most recent pullback. 14,200 remains a critical level if the index moves downward. 14,000 has been an area of support/resistance. There is a pivot at 13,903.73. A further pullback would likely hit the 200d moving average at 13,844.89. The index hasn't approached this line since rising above it in April 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The September slump continues, but so far the markets are holding up well. The momentum will almost certainly move in one direction or the other after the Wednesday afternoon Fed comments on the economy and interest rate hikes. More important in the immediate future is any decisions they make on bond purchase tapering. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 9/7/2021 - 9/10/2021Summary: This week investors wrestled with worries over a slowing economic recovery and the timing of the Fed's bond tapering this fall. The short week opened with the Nasdaq reaching a new all-time high, but prices faded from that point through the end of the week. Glitches in cryptocurrency platforms sent Bitcoin and Ethereum lower, while NFTs sent Litecoin higher. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, September 07, 2021 Facts: +0.07%, Volume lower, Closing Range: 52%, Body: 3% Red Good: Higher high, higher low on increased volume Bad: Low A/D ratio, thin red body in middle of candle signals indecision Highs/Lows: Higher high, Higher low Candle: Indecisive doji style candle shows buyers and sellers in market Advance/Decline: 0.45, two declining stocks for every advancing stock Indexes: SPX (-0.34%), DJI (-0.76%), RUT (-0.72%), VIX (+10.54%) Sector List: Consumer Discretionary (XLY +0.29%) and Communications (XLC +0.23%) at the top. Utilities (XLU -1.32%) and Industrials (XLI -1.73%) at the bottom. Expectation: Sideways or Lower Markets closed the day with mixed results as investors worried about a slowing economy and uncertainty around when the Fed would start bond tapering. Big Tech were viewed as safe bets, helping keep the growth sectors and the Nasdaq in the positive for the day. The Nasdaq ended the day with a +0.07% gain, setting a new all-time and another record close. The 3% red body rests in the middle of the candle, representing the indecision for buyers and sellers during the day. The closing range of 52% is ok. The fight between bulls and bears created a higher volume day than the previous day. There were over two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, September 08, 2021 Facts: -0.57%, Volume higher, Closing Range: 52%, Body: 48% Red Good: Climb back to 52% closing range after morning selling Bad: Red body, lower high and close on higher volume Highs/Lows: Lower high, Lower low Candle: No upper wick, half red body and half lower wick Advance/Decline: 0.31, more than three declining Indexes: SPX (-0.13%), DJI (-0.20%), RUT (-1.14%), VIX (-0.99%) Sector List: Utilities (XLU +1.79%) and Consumer Staples (XLP +0.86%) at the top. Materials (XLB -0.96%) and Energy (XLE -1.28%) at the bottom. Expectation: Sideways or Lower Investors were cautious on Wednesday, sending indexes lower over fears of a slowing economy. Defensive sectors led the day. The Nasdaq closed with a -0.57% loss for the day. Volume was higher than the previous day. The closing range of 52% comes below a 48% red body that occupies the upper half of the candle. There is a long lower wick and no upper wick. More than three stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, September 09, 2021 Facts: -0.25%, Volume lower, Closing Range: 3%, Body: 45% Red Good: Closed above yesterday's low Bad: Long upper wick formed after a failed morning rally Highs/Lows: Lower high, Higher low Candle: Inside day, long upper wick with very low closing range Advance/Decline: 0.83, more declining stocks than advancing stocks Indexes: SPX (-0.46%), DJI (-0.43%), RUT (-0.03%), VIX (+4.68%) Sector List: Financials (XLF +0.29%) and Energy (XLE +0.21%) at the top. Health (XLV -1.15%) and Real Estate (XLRE -2.12%) at the bottom. Expectation: Lower Indexes declined today after a volatile day for bonds. Yields were rising in the early morning before a robust 30y Bond auction sent yields lower. Jobless claims data released in the morning hit another pandemic low, boosting the economic outlook but raising expectations for the Fed to start tapering bond repurchasing. The Nasdaq closed with a -0.25% gain for the day. The index could not hold onto a morning rally that formed a long upper wick. The index faded after the rally to end the day with a 3% closing range and 45% red body. Volume was lower than the previous day, and the trading range was within the high and low of Wednesday. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, September 10, 2021 Facts: -0.87%, Volume higher, Closing Range: 2%, Body: 91% Red Good: Stayed above 21d EMA, but maybe just because the market closed Bad: Failed support at 15,200, all red body candle Highs/Lows: Lower high, Lower low Candle: Tiny upper wick and no lower wick, all red body Advance/Decline: 0.36, three declining stocks for every advancing stock Indexes: SPX (-0.77%), DJI (-0.78%), RUT (-0.96%), VIX (+11.44%) Sector List: Materials (XLB -0.02%) and Energy (XLE -0.04%) at the top. Real Estate (XLRE -1.26%) and Utilities (XLU -1.40%) at the bottom. Expectation: Lower Markets reacted on fears of a slowing economy while demand remains higher than supply in several parts of the economy, and indicators show continued inflation for producers. The day marks the fourth straight session of declines for equities. The Nasdaq lost -0.87% for the day on a higher volume than average. The candle is 91% red body with a tiny upper wick and barely visible lower wick. The closing range was 2%. There were three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week This week investors wrestled with worries over a slowing economic recovery and the timing of the Fed's bond tapering this fall. The short week opened with the Nasdaq reaching a new all-time high, but prices faded from that point through the end of the week. Glitches in cryptocurrency platforms sent Bitcoin and Ethereum lower, while NFTs sent Litecoin higher. The previous Friday's employment data provided a sour outlook for investors looking for more robust economic growth. That disappointing news came amidst continued concerns over the spread of the Delta variant of COVID, causing more headwinds for the service industry. The result was investors buying up big tech at the beginning of the week. Big tech has shown resilience to the impacts of the pandemic. The economic data brings up another concern for investors. When will the Fed start to taper bond purchases? At first glance, one could imagine that the slowing growth in payrolls would push tapering out further. On the contrary, statements from the Fed this week indicated that the economy had recovered enough that bond tapering could still proceed in the short term. The result was quite a bit of volatility in Treasury bonds. Volatility in the bond market is going to lead to volatility in equities. Both increase risk for large institutional investors who are inevitably going to reduce or hedge positions. So we have a week of distribution days across all the major indexes, with the huge drops coming in mid-day reactions. The sell-off on Friday afternoon capped the bearish week and was likely investors positioning against further volatility over the weekend. The Nasdaq declined -1.62% for the week. Volume was higher than the previous week. The closing range is 2%, reflecting the selling on Friday afternoon that continued into the market close. The Dow Jones Industrial Average (DJI) fell -2.15% for the week. The S&P 500 (SPX) declined -1.69%. The Russell 2000 (RUT) lost -2.81% this week. The VIX volatility index ended the week up +27.68% over the previous week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Sectors All sectors declined this week as the S&P 500 pulled back from all-time highs. Consumer Discretionary ( XLY ) was poised to end the week with gains before losing those gains in Friday afternoon selling. Real Estate ( XLRE ) was the worst-performing sector of the week after outperforming the market in the previous week. The sector erased all of last week's 4% gain as investors reversed the trade that is supposed to protect against inflation and benefit from low interest rates. Utilities ( XLU ) took the top position on Wednesday but gave the lead back to Consumer Discretionary on Thursday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) advanced +0.57% for the week. US Treasuries 30y yield declined this week after there was high demand in an auction on Thursday. The 10y yield rose for the third week. The 2y yield also rose. The 30/5 spread declined for the week. High Yield (HYG) Corporate Bond prices declined this week while Investment Grade (LQD) Corporate Bond prices advanced. Silver and Gold fell for the week. Crude Oil was up but has been sticking within a bound range since the end of August. Timber declined for the week. The big moves in commodities were Copper and Aluminum futures. Copper was up +3.46% for the week. Aluminum soared +7.05% prices and has risen 15% over the past three weeks among reported supply issues. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.728. The level is not overly bearish but is much higher than a week ago when it was near 0.5. The CNN Fear & Greed Index moved back to Fear and is approaching Extreme Fear. The NAAIM money manager exposure index fell to 84.68 from 93.95 the previous week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Stocks of the Week This week, Apple (AAPL) led the declines for the four largest mega-caps with a -3.45% loss. The sell-off on Friday came after a judge ruled Apple must loosen the strict rules for sellers in its app store. Microsoft (MSFT) and Alphabet (GOOGL) also ended the week with losses. The three stocks moved below their 21d exponential moving average on the daily chart but remained above the 10w moving average on the weekly chart. Amazon (AMZN) also declined but is trading above these moving averages for now. Lululemon (LULU) climbed 14% intraday on Thursday before ending the week with a 10% gain. The company smashed earnings expectations and improved its outlook for the remainder of the year. UP Fintech (TIGR) missed earnings expectations in their report this week but continues to impress investors with strong growth and potential for growth in the future. The stock was up 18% intraday on Friday before closing, with an 8.59% gain for the day. Peloton (PTON) gained 16% for the week after announcing its private-label apparel brand. The news came on Wednesday, sending the stock 9% and 6% the following two days. SUMO Digital dropped -14.91% this week despite beating revenue and earnings expectations this week. Analysts downgraded the stock because growth projections were primarily focused on one large customer. The stock is down 60% from its all-time high set in January of this year. DraftKings (DKNG) and Penn National Gaming (PENN) continue to climb as the college and professional football seasons get underway, with many stadiums allowing near full capacity and bringing some added excitement back to the games and sports betting. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency Bitcoin (BTCUSD) and Ethereum (ETHUSD) dropped sharply this week, declining -11.13% and -13.88% after the rollout of digital currency in El Salvador hit snags among glitches in major trading platforms such as Coinbase (COIN). Coinbase was also down nearly 11% for the week. Litecoin (LTCUSD) got a boost, advancing +33.14% on the excitement of non-fungible tokens launching on the platform. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday OPEC's Monthly report is due on Monday morning. The Federal Budget Balance comes in the afternoon. Oracle (ORCL) and H&R Block (HRB) report earnings on Monday. Tuesday Inflation data will have everyone's attention on Tuesday with the release of August's consumer price index data. There are no relevant earnings reports for Tuesday. Wednesday Export and Import Price Index data and the NY Empire State Manufacturing Index will be available on Wednesday. Crude Oil Inventories will be available after the market opens. There are no relevant earnings reports for Wednesday. Thursday On Thursday, we will get Retail Sales data for August. Initial Jobless Claims will also be available in the morning. There are no relevant earnings reports for Thursday. Friday Initial Consumer Sentiment data for September, released on Friday, will hopefully improve over the previous month. There are no relevant earnings reports for Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Investors have been dealing with worries over bond tapering for months. Good and bad economic news has had opposite impacts on markets as investors consider that the Fed might slow bond purchases quicker than previously expected. Each time that has caused a dip in the major indexes that recovers in the following week. While sentiment indicators show fear in the market, the market continues to climb higher on those fears. Economic growth is being held back not by a lack of demand but a lack of supply across many parts of the economy. The labor market, raw materials, and transportation are all holding back the market from meeting demands. The only place not seeing a high demand now are pandemic-vulnerable segments in the service industry. The market will figure out how to meet demand, and the economy will move forward. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The pending Fed bond purchase taper could be another painful lesson in how bond volatility impacts equity markets. Treasury yields will rise through the end of the year and potentially have an impact similar to when they rose in the first quarter. Expect a series of rotations as investors rebalance portfolios in anticipation of the changing dynamic. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch This week, the Nasdaq set another all-time high but closed the week lower, resting just above the 21d exponential moving average. On the positive side, the levels are: The 10d moving average is at 15,268.34. A new all-time high was set on Monday at 15,403.44. The index met several days of resistance around 15,400. 15,500 may be the next area of resistance. On the downside, there are a few key levels: The low of the week is 15,111.31, just below Friday's close. The 21d EMA is at 15,081.46. 15,000 is an area of support. The 50d MA is at 14,825.85. 14,423.16 is the low of the most recent pullback. 14,200 remains a critical level if the index moves downward. 14,000 has been an area of support/resistance. There is a pivot at 13,903.73. A further pullback would likely hit the 200d moving average at 13,771.69. The index hasn't approached this line since rising above it in April 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up September looks like it will live up to its reputation as the most bearish month of the year. The 2020 September correction took the Nasdaq to a 12% decline. It looks like this month will be a more typical 5-6% dip taking us back to the 14,500 area before getting support. Of course, some economic news could turn that around. I don't think we are going to see a more severe correction at this point. Even when the Fed starts tapering, they will not be shutting off purchases all at once. It's a taper, not a termination. Interest rate hikes are still far in the future. Using lower borrowing rates on top of high cash accounts, Corporations will spend to meet high demands in the economy. Eventually, supply chain issues will diminish, and companies will show improving P/E ratios, allowing investors to be less concerned about an extended stock market. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 8/23/2021 - 8/27/2021Summary: Last week's fears melted away to optimism. The Nasdaq rallied to a new all-time high and record weekly close. The S&P 500 marked yet another record close, which has become a common occurrence this year. Yet, the bigger story was with small-caps and the Russell 2000, leading the market higher and building some structural support in the market to continue the rally in the final quarter of the year. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, August 23, 2021 Facts: +1.55%, Volume higher, Closing Range: 91% (w/gap), Body: 89% Green Good: No lower wick and small upper wick, thick green body with big gain on higher volume Bad: Nothing Highs/Lows: Higher high, Higher low Candle: Gap up at open, thick green body under a small upper wick Advance/Decline: 2.18, more than two advancing stocks for every declining stock Indexes: SPX (+0.85%), DJI (+0.61%), RUT (+1.88%), VIX (-7.60%) Sector List: Energy (XLE +3.75%) and Technology (XLK +1.29%) at the top. Real Estate (XLRE -0.38%) and Utilities (XLU -1.29%) at the bottom. Expectation: Sideways or Higher On Monday, the market turned optimistic after the FDA fully approved Pfizer's vaccine, adding a third day of gains off of last week's pivot low and ending with a record for the Nasdaq. Gains were broadly shared across stocks, and the defensive sectors dropped to the bottom of the sector list. The Nasdaq gained +1.55% for the day and set a new all-time high and record close. Volume was higher than the previous day. The candle has no lower wick for the third straight day. The thick green body covers 89% of the candle and is under a tiny upper wick, resulting in a 91% closing range (including the gap up at open). There were more than two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, August 24, 2021 Facts: +0.52%, Volume lower, Closing Range: 79% (w/gap), Body: 60% Green Good: Higher high, higher low, fourth day of green candles Bad: Lower volume, otherwise nothing Highs/Lows: Higher high, Higher low Candle: Thinner candle with small upper and lower wicks, mostly green body Advance/Decline: 1.33, more advancing than declining stocks Indexes: SPX (+0.15%), DJI (+0.09%), RUT (+1.02%), VIX (+0.41%) Sector List: Energy (XLE +1.66%) and Consumer Discretionary (XLY +0.71%) at the top. Real Estate (XLRE -0.75%) and Consumer Staples (XLP -0.76%) at the bottom. Expectation: Sideways or Higher Small-caps led the markets higher for a another day, giving indexes their fourth day of gains after last week's dip. Even meme stocks were back in play with huge gains from GME and AMC. The Nasdaq closed +0.52% higher. Volume was lower than the previous day with a short candle that is still mostly body. The 60% body is in between a small upper and lower wick. The index ended the day with a 79% closing range, including the gap. There were more advancing stocks than declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, August 25, 2021 Facts: +0.15%, Volume lower, Closing Range: 63%, Body: 6% Green Good: Low volatility day, high A/D ratio, green candle. Bad: Indecision marked by thin body Highs/Lows: Higher high, Higher low Candle: Spinning top candle with thin body in the middle of similar length wicks. Advance/Decline: 1.14, more advancing than declining stocks Indexes: SPX (+0.22%), DJIA (+0.11%), RUT (+0.37%), VIX (-2.50%) Sector List: Financials (XLF +1.18%) and Energy (XLE +0.76%) at the top. Consumer Staples (XLP -0.17%) and Health (XLV -0.27%) at the bottom. Expectation: Sideways The Nasdaq and S&P 500 had another set of record closes while the small-cap Russell 2000 continues to outperform as the market heads higher. Economic news was slightly bullish, with core durable goods and crude oil inventories showing more demand than expected. The Nasdaq closed with a +0.15% gain, just slightly higher than where it opened. Volume was lower than the previous day and remained lower than the 20-day average. The spinning top candle, marked by a thin body in the middle of short upper and lower wicks, shows indecision in the market as the index hits new all-time highs. There were more advancing than declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, August 26, 2021 Facts: -0.64%, Volume lower, Closing Range: 5%, Body: 66% Red Good: Lower volume Bad: Closing range, low A/D ratio, lower high/low Highs/Lows: Lower high, Lower low Candle: Thick red body at bottom of candle. Longer upper wick than lower wick. Advance/Decline: 0.42, two declining stocks for every advancing stock Indexes: SPX (-0.58%), DJI (-0.54%), RUT (-1.13%), VIX (+12.21%) Sector List: Real Estate (XLRE +0.06%) and Utilities (XLU -0.25%) at the top. Consumer Discretionary (XLY -0.92%) and Energy (XLE -1.52%) at the bottom. Expectation: Sideways or Lower Indexes moved lower for the first time in several days as investors became defensive after slightly higher than expected jobless claims data. The Nasdaq closed with a -0.64% decline on lower volume than the previous day. The red body covers 66% of the candle which has a longer upper wick than lower wick. The closing range of 5% shows the selling continued into close. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, August 27, 2021 Facts: +1.23%, Volume higher, Closing Range: 92%, Body: 90% Green Good: All green body, gain on higher volume, higher high/low Bad: Nothing Highs/Lows: Higher high, Higher low Candle: Mostly green body with a short upper wick Advance/Decline: 2.53, five advancing stocks for every two declining stocks Indexes: SPX (+0.88%), DJIA (+0.69%), RUT (+2.85%), VIX (-13.00%) Sector List: Energy (XLE +2.67%) and Communications (XLC +1.58%) at the top. Utilities (XLU -0.03%) and Health (XLV -0.11%) at the bottom. Expectation: Higher A dovish stance from the Fed's Jerome Powell at the Jackson Hole Economic Symposium sent stocks higher today. Gains were broadly shared across the market, with small caps leading the way. The S&P 500 and Nasdaq closed at record highs. The Nasdaq advanced +1.23% for the day. Volume was significantly higher than the previous days. The candle is mostly green body as the index rose throughout the day and only dipped near the close, leaving a short upper wick. The 92% closing range on top of a 90% body is bullish for the index. Gains were broadly shared, with five stocks advancing for every two declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week Last week's fears melted away to optimism. The Nasdaq rallied to a new all-time high and record weekly close. The S&P 500 marked yet another record close, which has become a common occurrence this year. Yet, the bigger story was with small-caps and the Russell 2000, leading the market higher and building some structural support in the market to continue the rally in the final quarter of the year. In contrast to last week, when the bad news piled on top of bad news, this week the good news just kept coming. First it was the final FDA approval of the Pfizer vaccine on Monday. Then, it was the approval of the $3.5 trillion budget in the House and a promise of a vote for the Infrastructure bill by the end of September. Economic data was not overly positive, but it also wasn't overly negative. The best news came from the Jackson Hole economic symposium. At the symposium, the Fed's Jerome Powell gave a speech that perfectly balanced the reality of tapering with a cautiously optimistic outlook toward the economy. Powell acknowledged that there was progress with employment, but still work to do. He also expressed concern over the Delta variant of the Coronavirus. He also restated that inflation appears transitory, and they wouldn't overreact. That showed investors that the Fed would be dovish toward interest rate increases in the near term. The result of all the good news was a rally throughout the week for the major indexes. Gains were broadly shared across the market. The advance/decline ratio for the Nasdaq was above 1.0 four out of five days in the week. On Friday, the advance/decline ratio for the New York Stock Exchange was 6.58, or more than six advancing stocks for every declining stock. The Nasdaq advanced +2.82% for the week. Volume was higher than the previous week. The closing range is 96%. The weekly candle has no lower wick and only a tiny upper wick. The only dip during the week was on Thursday. The Russell 2000 (RUT) led the major indexes with a +5.05% gain for the week. The S&P 500 (SPX) gained +1.52%. The Dow Jones Industrial Average (DJI) rose +0.96%. The VIX volatility index fell -13.00%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Sectors A mix of growth and cyclical sectors topped the list this week. Defensive s all sectors declined for the week after topping the sector list last week. Energy ( XLE ) held the lead among sectors for the entire week, despite a pullback on Thursday. The sector completely recovered from last week's decline and marked a higher high this week. All of the cyclical and growth sectors had solid gains, with Financials ( XLF ) ending the week in second place. Technology ( XLK ) trailed the other gaining sectors, underperforming the overall S&P 500 but still finished with a +1.45% gain. Utilities ( XLU ) was the worst-performing sector for the week as investors rotated out of defensive positions and back into bullish cyclical and growth positions. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Economic Indicators The US Dollar (DXY) declined -0.83%. The dollar will weaken when investors see a dovish Fed and strengthen when they see a hawkish Fed. A hawkish Fed would raise interest rates, making the US Dollar and Treasuries more attractive. Right now, Jerome Powell is not indicating any move toward raising interest rates as he believes inflation is transitory and raising interest rates would slow down the labor market recovery. US Treasuries 30y and 10y yields rose for the week while the 2y yield declined. The US 30y-5y spread widened slightly. All Treasury yields dipped on Friday after Jerome Powell's speech. But shorter-term yields dipped more as investors see a slower tapering from the Fed than previously thought. Both High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices increased for the week. It was a bullish week for commodities. The highlight was Aluminum that soared back to record highs. The metal is required for in many product packaging other manufacturing processes. High demand for Aluminum means high demand for manufacturing. All of the commodities were likely impacted by the weakening US Dollar. The moves up for Gold and Silver were mostly from the US Dollar moving down. Copper and Timber also rose this week, both required for infrastructure. Crude Oil rebounded from several weeks of declines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.607. It's in the bullish range, but not overly bullish compared to earlier in the week when it hit 0.512. The CNN Fear & Greed Index moved from Extreme Fear to Neutral. The NAAIM money manager exposure index moved up to 92.83 this week from 70.57 the previous week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Stocks of the Week Amazon (AMZN) moved back above its 40w moving average line with a +4.68% gain. Alphabet (GOOGL) also outperformed, advancing +4.78%. Microsoft (MSFT) pulled back from new all-time highs, declining -1.52% for the week. Apple (AAPL) showed an indecisive week with a +0.28% gain and thin-bodied candle. Semiconductors (SMH) set a new record close on Friday, advancing +6.11%. The sector was helped higher by Taiwan Semiconductor Manufacturing (TSM) and Nvidia (NVDA) which gained +9.59% and +8.74%, respectively. The two outperformed other mega-caps, topping the list for the week. Health stocks did not do well this week. Pfizer (PFE) ended the week at the bottom of the mega-cap list with a -4.35% decline, despite getting final FDA approval for its COVID vaccine on Monday. Novo Nordisk (NVO), Eli Lilly (LLY), and Johnson & Johnson (JNJ) were other health-related stocks at the bottom of the mega-cap list. AMC (AMC) and GameStop (GME) were back in the spotlight this week with huge meme-stock gains on Tuesday. They both pulled back from intra-week highs, but AMC held onto an +18.69% gain for the week, while GameStop held onto a +28.66% advance. Penn National Gaming (PENN) and DraftKings (DKNG) advanced +23.52% and +15.38% as pro and college football seasons kickoff in the US. ESPN is also reportedly looking to get into the online sports gambling opportunity. Salesforce.com (CRM), Snowflake (SNOW), and Workday (WDAY) were a few of the earnings winners for the week. Peloton (PTON) had nothing but bad news during its earnings call, announcing a miss on expectations, price drops, and investigations by the DOJ, DHS, and SEC. The stock dropped -8.55% on Friday, ending the week with a -3.45% weekly decline. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency Cryptocurrencies have been moving sideways for the past two weeks. Bitcoin (BTCUSD) declined -1.32% this week. Ethereum (ETHUSD) declined -0.69%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday Pending Home Sales data will be available on Monday morning. China will release purchasing manager index data showing current economic activity in the late evening. Zoom Video (ZM and StoneCo (STNE) will be earnings reports to watch on Monday after the close. Tuesday Inflation data for Europe will be available on Tuesday morning. CB Consumer Confidence data will be released after the market opens. API Weekly Crude Oil Stock is updated after the market closes. Crowdstrike (CRWD), NetEase (NTES), and FUTU Holdings (FUTU) release earnings. Wednesday Manufacturing Purchasing Managers Index data will be available on Wednesday. Crude Oil Inventories gets a weekly update after the market opens. Okta (OKTA), Chewy (CHWY), and Five Below (FIVE) will release earnings on Wednesday. Thursday Thursday morning will bring an update to Exports/Imports for July and Initial Jobless Claims for the week. Broadcom (AVGO), MongoDB (MDB), Hewlett Packard (HPE), Cloudera (CLDR), and Pagerduty (PD) will report earnings. Friday Employment data on Friday morning will show the progress in the labor market recovery. It's data watched closely by the Fed to determine economic policy. We'll also get the Non-Manufacturing Purchasing Managers Index. DocuSign (DOCU) will release earnings on Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Two big events this past week provide a bullish outlook for the near term. First, the vote to accept the $3.5 trillion budget proposal in the House and a set deadline for the end of September to vote on the Infrastructure Bill. Second, the clear message from the Fed's Jerome Powell in Jackson Hole reaffirmed that tapering would begin but interest rate changes are still far in the future after more progress is made in recovering the labor market. Inflation is a concern, but the Fed still believes its transitory. The result was a weaker US dollar and a drop in Treasury yields. Both are bullish for US corporations. To be sure, look at small-caps as the most sensitive segment to changes in economic indicators. The Russell 2000 (RUT) was up +2.85% on Friday and gained 5.05% for the week. Earning season is winding down and it was overall very positive. Many companies showed strong earnings growth and provided positive guidance for the remainder of the year. High Yield Corporate Bond prices are soaring again as investors are bullish on US businesses. The gap between corporate bond yields and treasury yields is tightening. Corporations have plenty of cash and debt waiting to be spent which they'll unleash to grow their businesses. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side We may be trending back toward an overly bullish market. Meme stocks were back in play this week with AMC and GME having huge gains. Other new meme stocks started to pop on Friday and may continue into next week. That bullish exuberance can be good for some in the short term but it increases volatility in the market and could weaken sentiment overall. The Delta variant of COVID is continuing to grow. Daily new cases in the US are higher now than they were one year ago and are approaching levels not seen since before mass vaccination started. It seems the economy and market has grown confident against the possible impact of the continuing pandemic, but that confidence may break at any moment. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq is back above the 21d EMA and 10d MA, cleared the 15,000 resistance area, and set new all-time highs this week with a record close on Friday. On the positive side, the levels are: The new all-time high was set on Friday and is 15,144.48. 15,500 may be the next area of resistance. On the downside, there are a few key levels: 15,000 should became an area of support now. The 10d moving average is at 14,831.19. The 21d EMA is at 14,818.04. The 50d MA is at 14,653.97. 14,423.16 is the low of the most recent pullback. 14,200 remains a critical level if the index moves downward. 14,000 has been an area of support/resistance. There is a pivot at 13,903.73. A further pullback would likely hit the 200d moving average at 13,616.87. The index hasn't approached this line since rising above it in April 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Several good structural days this week with broadly shared gains looks good for the coming week. Still, with indexes at all-time highs, investors will be watching for any signs of weakness. For now, the bull rally continues and seems we still have momentum to grow from here. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
1
Market Week in Review - 8/16/2021 - 8/20/2021Summary: Fears of a slowing economic recovery among rising cases of the Delta variant drove investors through a volatile week in the stock market. To make things worse, the Fed meeting minutes indicated that tapering could begin within this year. Despite the bad news, investors stuck with equities but rotated into defensive sectors. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, August 16, 2021 Facts: -0.20%, Volume lower, Closing range: 100%, Body: 12% Good: Volume lower on retreat, high closing range Bad: Long lower wick pierced through 21d EMA Highs/Lows: Lower high, lower low Candle: Hanging man, small body above long lower wick within uptrend Advanced/Decline: 0.31, more than three declining stocks for every advancing stock Indexes: SPX (+0.26%), DJI (+0.31%), RUT (-0.89%), VIX (+4.20%) Sectors: Health (XLV +1.14%) and Utilities (XLU +0.61%) at the top. Materials (XLB -0.50%) and Energy (XLE -1.84%) at the bottom. Expectation: Sideways or Lower Investors sold off equities in the morning and then seemingly decided there was nowhere else to put the money and bought back assets in the afternoon. Money moved back into the market, mostly into defensive sectors, sending the S&P 500 and Dow Jones Industrial (DJI) to another set of records. The Nasdaq closed with a decline of -0.20% after dipping more than 1.4% in the morning. Volume was lower than the previous day. The thin body above a long lower wick creates a hanging man candlestick within an uptrend. The closing range of 100% shows bulls kept up the buying into close. Still, there were more than three declining stocks for every advancing stock for the day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, August 17, 2021 Facts: -0.93%, Volume higher, Closing range: 63%, Body: 9% Good: Stayed above 50d MA Bad: Break down below 21d EMA on higher volume Highs/Lows: Lower high, lower low Candle: Thin red body in upper half of candle, longer lower wick Advanced/Decline: 0.32, more than three declining stocks for every advancing stock Indexes: SPX (-0.71%), DJI (-0.79%), RUT (-1.19%), VIX (+11.24%) Sectors: Health (XLV +1.18%) and Real Estate (XLRE +0.19%) at the top. Materials (XLB -1.15%) and Consumer Discretionary (XLY -2.37%) at the bottom. Expectation: Lower Disappointing retail sales data confirmed fears that the rising cases of the Delta variant are slowing down the economic recovery. That sent major indexes lower on Tuesday. Only the defensive sectors ended the day with gains. The Nasdaq closed with a -0.93% loss on higher volume than the previous day, marking a distribution day for the index. The candle has a thin red body in the upper half of the candle. The closing range is 63%, and the body only covers 9% of the candle. The lower wick is longer than the upper wick. There were more than three declining stocks for every advancing stock on the Nasdaq. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, August 18, 2021 Facts: -0.89%, Volume lower, Closing range: 5%, Body: 61% Good: Lower volume Bad: Close below the 50d MA, sell-off before close of market Highs/Lows: Lower high, lower low Candle: Large red body below short upper wick Advanced/Decline: 0.38, nearly three declining stocks for every advancing stock Indexes: SPX (-1.07%), DJI (-1.08%), RUT (-0.84%), VIX (+20.32%) Sector List: Consumer Discretionary (XLY +0.36%) and Utilities (XLU -0.51%) at the top. Health (XLV -1.52%) and Energy (XLE -2.08%) at the bottom. Expectation: Lower Stocks slid after the Fed released meeting minutes from last month, raising fears that tapering support for the economy could come earlier than previously thought. Most sectors declined, with only Consumer Discretionary holding onto a gain for the day. The Nasdaq closed with a -0.89% loss, dipping just below the 50-day moving average line. Volume was lower than the previous day. The closing range of 5% is below a 61% red body. There is a short upper wick with a very tiny lower wick. There were almost three stocks declining for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, August 19, 2021 Facts: +0.11%, Volume higher, Closing range: 63%, Body: 63% Good: Higher volume on gain, close near the 50d MA Bad: Lower high, lower low continues downtrend Highs/Lows: Lower high, lower low Candle: No lower wick, large green body underneath upper wick Advanced/Decline: 0.28, over three declining stocks for every advancing stock Indexes: SPX (+0.13%), DJI (-0.19%), RUT (-1.22%), VIX (+0.46%) Sector List: Technology (XLK +0.98%) and Real Estate (XLRE +0.84%) at the top. Materials (XLB -0.89%) and Energy (XLE -2.60%) at the bottom. Expectation: Lower Investors grappled today with reactions to the Fed meeting minutes released late on Wednesday. The minutes showed several officials in the Fed see the possibility that a key employment goal may be met before year-end and would allow tapering to begin. The result was a dip at open followed by a volatile day as the market priced in the impact. The Nasdaq cleared a small gain for the day, advancing +0.11% and closing at the 50-day moving average line. Volume was higher than the previous day. The candle has no lower wick, a 63% green body, and a 37% upper wick. The index could not hold onto the gains from the morning rally. Despite the slight increase, there were more than three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, August 20, 2021 Facts: +1.19%, Volume lower, Closing Range: 95%, Body: 95% Green Good: All green body, high advance/decline ratio Bad: Lower volume Highs/Lows: Higher high, Higher low Candle: Mostly green body with a tiny upper wick, low above yesterday's close Advance/Decline: 1.68, three advancing stocks for every two declining stocks Indexes: SPX (+0.81%), DJIA (+0.65%), RUT (+1.65%), VIX (-14.35%) Sector List: Technology (XLK +1.29%) and Utilities (XLU +1.25%) at the top. Energy (XLE +0.22%) and Consumer Staples (XLP +0.17%) at the bottom. Expectation: Higher The market shrugged off worries about the Fed tapering of economic support to rally higher today. While the indexes were still below recent highs, the day was an excellent structural day, with gains shared broadly across the market. The Nasdaq closed +1.19% higher. Volume was lower than the previous day. The candle is almost entirely green body, with a short upper wick. The closing range of 95% and 95% body creates the second candle in a row with no lower wick. The index closed back above its 21d EMA as three stocks advanced for every two that declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week www.tradingview.com Fears of a slowing economic recovery among rising cases of the Delta variant drove investors through a volatile week in the stock market. To make things worse, the Fed meeting minutes indicated that tapering could begin within this year. Despite the bad news, investors stuck with equities but rotated into defensive sectors. It opened on Monday with news of China retail sales falling much lower than expected. That sent indexes lower on Monday before prices recovered from the shocking news. Despite the dip, the S&P 500 and Dow Jones Industrial Average had another record close for the day. The bounce was short-lived. Tuesday brought the US Retail Sales data, which also came in lower than expected. That turned many bulls into bears, and the indexes moved lower and with higher volume. The Nasdaq closed below its 21d exponential moving average line. It seemed all was clear on Wednesday as buyers came back into the market, but then the Fed released meeting minutes in the afternoon that reversed the dip-buying. The Fed's minutes showed several Fed officials believed that tapering could start this year as key economic recovery goals were being met. The index sold off to close below its 50d moving average line. The selling resulted in a gap down at open on Thursday, but the sudden drop below 14,500 seemed enough to get investors back into the game, and the opening price became the low of the day. The rally took the Nasdaq back above its 50d moving average but then faded to close below. Given the fade and the lower high and lower low for the day, the expectation was still for the Nasdaq to move lower on Friday. That did not happen. Instead, the index opened above the 50d moving average and rose the entire day to close above its 21d exponential moving average. There were more advancing stocks than declining stocks, and all sectors gained. That was an excellent structural day to end the week. The rally on Friday could be because the Fed's Robert Kaplan, who is influential among the group, changed his tone toward tapering, stating that the Delta variant was concerning and may have a prolonged impact on the economy. The rally may also have been because of the monthly options expiration. Or it may just be more speculative dip-buying. We won't know until next week when the market can decide where it goes next. The Nasdaq declined -0.73% for the week. Volume was lower than the previous week. The closing range is 78%. Three weeks of long lower wicks show the presence of sellers as the index is at all-time highs. The S&P 500 (SPX) declined -0.59%. The Dow Jones Industrial Average (DJI) lost -1.11%. The Russell 2000 (RUT) fell -2.50% for the week. The VIX volatility index rose 60% mid-week but closed the week at a +19.99% gain. Defensive sectors led throughout this week as the Market absorbed data that showed a slowing economic recovery and meeting minutes from the Fed that indicated tapering could begin this year. Utilities ( XLU ) and Health Care ( XLV ) exchanged the lead several times, and the finish was close. Utilities became a favorite place for investors to keep money in equities while taking a defensive stance toward the economy. Health Care also did well as the world watches another wave of the pandemic brought on by the Delta variant of COVID. Technology ( XLK ) also mixed in with the defensive sectors at the top of the list. Big tech seems to be another safe play for equity investors, with Microsoft ( MSFT ), Apple ( AAPL ), and Alphabet ( GOOGL ) all turning in strong financials and appear resilient to new waves of lockdowns. Suffering the most from fears of economic slowdown and the pandemic, Energy ( XLE ) came in the last place for the week with a huge loss of over 7%. Yields for the US 30y and 10y both declined this week while 2y Treasuries advanced. Both High Yield Corporate Bond (HYG) prices dipped, and Investment Grade Bond (LQD) prices rose for the week. Both moves were small. The US Dollar (DXY) advanced +1.01% for the week. The dollar is at its strongest in 2021. Silver (SILVER) declined -2.94%, while Gold (GOLD) advanced +0.08%. Crude Oil (CRUDEOIL1!) dropped -8.68%. Timber (WOOD) declined -3.83%. Copper (COPPER1!) declined -4.55%. Aluminum (ALI1!) declined -1.97%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Microsoft (MSFT) beat the market this week with a +3.93% gain, helping send the Technology sector to new highs. The other four largest mega-caps took losses. Apple (AAPL) and Alphabet (GOOGL) declined -0.61% and -0.22%. The charts of these two companies look good, remaining above their 10-week moving average. Amazon (AMZN) continues to fall back after earnings a month ago. This week is declined -2.85% and closed below its 50w moving average. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). Bitcoin (BTCUSD) outperformed the other cryptocurrencies this week with a +4.16% gain (time of writing). Ethereum (ETHUSD) declined -2.02%. Litecoin (LTCUSD) lost -1.01%. Bitcoin Cash (BCHUSD) fell -3.23%. Keep in mind that the US Dollar advanced 1.00% when considering these crypto prices with the USD as the denominator. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.760, elevated from the previous week. The CNN Fear & Greed Index moved back into Extreme Fear. The NAAIM money manager exposure index dropped to 70.57 this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday Manufacturing and Services Purchasing Managers Index data will be available on Monday, just after the market opens. Existing Home Sales data will also be available. JD.com (JD) releases earnings on Monday. Tuesday New Home Sales will be available on Tuesday morning. API Weekly Crude Oil Stock comes after the market closes. Medtronic (MDT), Intuit (INTU), Pinduoduo (PDD), and Best Buy (BBY) are some of the earnings reports to watch for Tuesday. Wednesday Durable Goods Orders on Wednesday give another look at the pace of economic growth. Crude Oil Inventories will also be available after the market open. Higher demand would be a positive for oil and the energy sector. Salesforce.com (CRM), Snowflake (SNOW), Autodesk (ADSK), and Ehang Holdings (EH) are some of the interesting earnings reports on Wednesday. Thursday The weekly Initial Jobless Claims numbers will be available before the market opens on Thursday. An update to the Q2 GDP numbers will also be released, which are expected to be slightly higher than the previous preliminary data. Thursday's earnings reports include Dell (DELL), VMWare (VMW), Workday (WDAY), Dollar General (DG), Woolworths (WOLZY), Peloton Interactive (PTON), Dollar Tree (DLTR), Gap (GPS), and UP Fintech (TIGR). Friday There are two important sets of economic data to watch for on Friday. PCE Price Index data is a primary indicator of inflation. The data will be available before the market opens. After the market opens, attention will turn to the update for Michigan Consumer Sentiment numbers for August. The preliminary numbers two weeks ago were well below expectation. Big Lots (BIG) releases earnings on Friday morning. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The market certainly turned more bearish this week. However, there are still some bullish signals. First, negative reactions to disappointing economic data were short-lived, and even the revelation that the Fed might start tapering economic support only had a temporary impact. The reality is there are not so many great places for investors to put money other than in equities right now. That resulted in them finding the safest bets within equities, which sent defensive sectors higher and boosted high-performing tech companies. Although there will be some impact if the Fed begins to taper, the reason for tapering is a strong economy. If jobs data shows full employment on the horizon, we should see a pickup in consumer and corporate spending. Both groups still have cash and debt to burn. That all equals growth. Inflation has shown signs of cooling off, and we'll get another look at the numbers on Friday. Although consumers are still feeling inflation at the register, there is likely oversupply across the supply chain and even into consumer homes. That extra supply could mean inflation slowing or even has a period of deflation. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The pandemic is wearing on the consumers and the economy. With the Delta variant rising in numbers, the outlook continues to dim. Although new lockdowns in the US are likely not on the horizon, the mood for consumers is keeping people home, impacting the service sectors. Across the board, data is showing a slowing economy. Retail sales were lower than forecast. Commodities this week all moved lower. Consumer sentiment is lower than during the height of the pandemic. The Nasdaq rebound off the intra-week low to end the week with a gain on Friday. That could just be a retracement before another move downward next week. Investor sentiment is low, and any bad news may be the final straw before a more significant correction. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq dipped below the 21d EMA and 50d MA but recovered and closed above both key moving average lines. On the positive side, the levels are: The 10d moving average is at 14,728.49. The all-time high of 14,896.47 is the level to pass and continue the bull run. The round number 15,000 is likely to be a new area of resistance. On the downside, there are a few key levels: The 21d EMA is at 14,714.66. The 50d MA is at 14,562.73. 14,423.16 is the low of the past week. 14,200 remains a critical level if the index moves downward. 14,000 has been an area of support/resistance. There is a pivot at 13,903.73, which A further pullback would likely hit the 200d moving average at 13,548.93. The index hasn't approached this line since rising above it in April 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was not an easy week for investors. Economic and geopolitical bad news piled up, and the Fed meeting minutes added to the worries of tapering. Still, it seems investors are sticking to equities. As investors do not have many places to put money, that means they'll be continuously rotating within market sectors to find the best places to get returns. Expect to feel dizzy as you watch your favorite stocks churn. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 8/9/2021 - 8/13/2021Summary: The S&P 500 and Dow Jones set new records this week while the Nasdaq struggled with a rotation and indecision from investors. Small caps took a step back while value stocks marched forward. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, August 9, 2021 Facts: +0.16%, Volume lower, Closing range: 71%, Body: 5% Good: Higher low, small gain on otherwise cautious day Bad: Lower high, indecisive day Highs/Lows: Lower high, higher low Candle: Another inside day, indecisive candle with thin body in the upper half Advanced/Decline: 0.67, three declining stocks for every advancing stock Indexes: SPX (-0.09%), DJI (-0.30%), RUT (-0.58%), VIX (+3.53%) Sectors: Health (XLV +0.38%) and Consumer Staples (XLP +0.37%) at the top. Real Estate (XLRE -0.45%) and Energy (XLY -1.41%) at the bottom. Expectation: Sideways It was another inside day for the Nasdaq as the market entered the week with caution. The Delta variant of the virus continues to rise while strong employment data is turning the Fed toward more tapering discussion. The combination drove the dollar higher and Treasury prices lower. The Nasdaq ended the day with a small advance, gaining +0.16%. The thin 5% body is in the upper half of the candle which has a lower high and higher high than the previous day. That's the second inside day in a row as the market consolidates before choosing a direction. The closing range of 71% is a positive but there were three declining stocks for every two advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, August 10, 2021 Facts: -0.49%, Volume lower, Closing range: 24%, Body: 71% Good: Higher high, lower volume on decline Bad: Lower low, low closing range Highs/Lows: Higher high, lower low Candle: Outside day made of mostly selling after the morning high. Advanced/Decline: 0.66, three declining stocks for every advancing stock Indexes: SPX (+0.10%), DJI (+0.46%), RUT (+0.20%), VIX (+0.42%) Sectors: Energy (XLE +1.76%) and Materials (XLB +1.51%) at the top. Technology (XLK -0.72%) and Real Estate (XLRE -1.07%) at the bottom. Expectation: Sideways or Lower Value stocks were in the spotlight today after the passing of the infrastructure bill in the Senate initiated a rotation into cyclical sectors. The result was new record closes for the Dow Jones and S&P 500. The Nasdaq closed with a -0.49% loss for the day. Volume was lower than the previous day. Three stocks declined for every two advancing stocks. The index attempted a rally in the morning but sold off quickly, resulting in a 71% red body and 24% closing range. The lower wick is longer than the upper wick. The higher high and lower low create an outside day following two inside days. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, August 11, 2021 Facts: -0.16%, Volume higher, Closing range: 48%, Body: 46% Good: Support at 21d EMA, rally after support creates longer lower wick Bad: Lower high, morning selling after hitting intraday high Highs/Lows: Lower high, lower low Candle: Red body covers upper half of candle, long lower wick covers lower half. Advanced/Decline: 0.83, more declining stocks than advancing stocks Indexes: SPX (+0.25%), DJI (+0.62%), RUT (+0.49%), VIX (-4.35%) Sectors: Materials (XLB +1.41%) and Industrials (XLI +1.30%) at the top. Technology (XLK +0.01%) and Health (XLV -0.99%) at the bottom. Expectation: Sideways or Lower Recovery and value stocks helped send the S&P 500 and Dow Jones to yet another record close on the day after the Infrastructure bill made it through the Senate. The Nasdaq closed with a loss of -0.16%. Volume was slightly higher than the previous day. The index opened up with a short rally to the intraday high and then sold off through the morning until getting support at the 21d exponential moving average before moving higher. The action created a long lower wick underneath a 46% red body and resulted in a 48% closing range. There were more declining stocks than advancing stocks on the growth-heavy Nasdaq. Beyond the Nasdaq, there were far more advancing stocks than declining stocks in the US markets. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, August 12, 2021 Facts: +0.35%, Volume higher, Closing range: 94%, Body: 52% Good: Another test with support at 21d EMA, green body over long lower wick Bad: Low A/D ratio, lower high Highs/Lows: Lower high, higher low Candle: Inside day, green body covers upper half of the candle. Advanced/Decline: 0.49, two declining stocks for every advancing stock Indexes: SPX (+0.30%), DJI (+0.04%), RUT (-0.28%), VIX (-3.05%) Sectors: Health (XLV +0.79%) and Technology (XLK +0.57%) at the top. Materials (XLB -0.16%) and Industrials (XLI -0.10%) at the bottom. Expectation: Sideways Jobs data helped boost the markets to more records today with big tech helping lead the way higher. The S&P 500 and Dow Jones Industrial Average both closed at record highs for the third day in a row. The Nasdaq finished the day with a +0.35% gain on slightly higher volume than the previous day. The index declined after open but found support at the 21d exponential moving average line and moved higher the rest of the day. The 52% green body covers the upper half of the candle. The rally in the afternoon resulted in a 94% closing range. A lower high and higher low, marks another inside day for the Nasdaq. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, August 13, 2021 Facts: +0.04%, Volume higher, Closing range: 48%, Body: 4% Good: Higher high, higher low Bad: Very low A/D ratio, couldn't hold intraday high Highs/Lows: Higher high, higher low Candle: Indecisive doji star candle with thin red body Advanced/Decline: 0.36, almost three declining stocks for every advancing stock Indexes: SPX (+0.16%), DJI (+0.04%), RUT (-0.93%), VIX (-0.77%) Sectors: Consumer Staples (XLP +0.83%) at Utilities (XLU +0.70%) at the top. Financials (XLF -0.75%) and Energy (XLE -1.18%) at the bottom. Expectation: Sideways Consumer Sentiment data released this morning was lower than during the height of the pandemic, signaling the public is exhausted from wave after wave of COVID cases. The market didn't overreact to the surprisingly low data, but caution was present with yields dropping and sectors used as defensive investments soaring. The Nasdaq closed with a slight +0.04% gain. Volume was a bit higher than the previous day. The doji star candle has a small thin body sitting in the middle of two equal-length wicks. The candle shows indecision and is often a bearish reversal in an uptrend. There were almost three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week The S&P 500 and Dow Jones set new records this week while the Nasdaq struggled with a rotation and indecision from investors. Small caps took a step back while value stocks marched forward. The week opened with caution triggered by rising cases of the Delta variant and more reports of full hospital beds around the United States. The result wasn't terrible for the indexes, possibly propped up by a positive jobs report. However, investors focused on defensive sectors for the day. The Infrastructure Bill passing the Senate on Tuesday was the pivotal moment for the week. That set off a two-day rotation back into value and recovery stocks and sent the cyclical sectors to the top of the sector list. It also kicked off four consecutive days of record closes for the S&P 500 and Dow Jones. Throughout the week, investors balanced worries about the pandemic with positive economic news. Employment data continues to be strong. Inflation is still high but not out of control. The Fed could start tapering earlier than expected. However, that didn't seem a concern during Wednesday's 10-year Treasury Note auction, which showed strong demand. The earnings season continued with primarily positive reports. Just as last week, the reactions to positive and negative earnings news were oversized. Upstart (UPST) soared 45% in three days after earnings. Unity Software (U) rose 20% in three days. Opendoor (OPEN) rose 20% after earnings. On the other hand, Digital Turbine (APPS) lost 6% the day after earnings. Cannabis supply company GrowGeneration (GRWG) sank 30% over the two days after earnings. The rotation snapped back toward big tech on Thursday, but the rally for the Nasdaq dampened on Friday after surprisingly low consumer sentiment data. The data was lower than last summer and at its lowest point in the past ten years. That pushed investors back into Treasuries and defensive sectors heading into the weekend. The Nasdaq declined -0.09% for the week. Volume was lower than the previous week. The closing range of 65% is good as the index successfully tested support at the 21d exponential moving average line twice during the week. On the daily chart, I adjusted a rising wedge that is heading toward 15,000 resistance. As volatility gets tighter approaching the tip of the wedge, the index may break out of the pattern higher, or it may break to the downside. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) closed the week at new records with +0.71% and +0.87% gains. The Russell 2000 (RUT) declined -1.10% for the week. The VIX volatility declined -4.33% for the week. Materials ( XLB ) led the sector list for the week, getting a massive boost on Tuesday and Wednesday after the Infrastructure bill passed the Senate. Industrials ( XLI ) also got a boost from the bill. Financials ( XLF ) contented for the top spot, gaining from rising Treasury yields that positively impact performance for the sector. However, yields dropped on Friday, and the sector dropped back to third place. The defensive sectors of Consumer Staples ( XLP ) and Utilities ( XLU ) also ended the week near the top of the list, signaling caution throughout the week as investors worry about rising cases of COVID in the US and around the world. Energy ( XLE ) had a few good days but ended the week in the last place. Yields for the US 30y, 10y, and 2y Treasuries all declined for the week. The gap tightened a bit after last week's rise in long-term yields. Both High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices rose. The US Dollar (DXY) declined -0.28% for the week. The dollar gained throughout the week but fell sharply on Friday after the terrible consumer sentiment data. Silver (SILVER) declined -2.46%, while Gold (GOLD) advanced +0.94%. Crude Oil (CRUDEOIL1!) declined -0.29%. Timber (WOOD) advanced +2.42%. Copper (COPPER1!) advanced +0.12%. Aluminum (ALI1!) advanced +0.64%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Apple (AAPL), Alphabet (GOOGL), and Microsoft (MSFT) all had record weekly closes. Apple rose +2.03% for the week. Alphabet (GOOGL) advanced +1.47%. Microsoft gained +1.17%. Amazon (AMZN) was the only of the largest four mega-caps to lose for the week, declining -1.52% and still testing support at its 40-week moving average line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. All four declined for the week as concerns over the Delta variant continue to rise. Marriott (MAR) had the most significant loss, moving down -5.09% and closing below the 10-week and 40-week moving average lines. Carnival Cruise Lines (CCL) and Delta Airlines (DAL) declined -0.95% and -1.04% for the week. Exxon Mobil (XOM) lost -1.88%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). It was another good week for the cryptocurrencies, especially Litecoin (LTCUSD) and Bitcoin Cash (BTHUSD), attempting to catch up with the other two. Litecoin advanced +23.27%, while Bitcoin Cash rose +26.48%. Ethereum (ETHUSD) gained +9.85%. Bitcoin (BTCUSD) grew +7.27%. Looking at cryptocurrencies, it's still difficult to read the signals on sentiment. The market is either favoring risk now or looking for stores of value ahead of volatility in equities. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.643. The CNN Fear & Greed Index moved toward neutral throughout the week but was still in the Fear range at the end of the week. The NAAIM money manager exposure index remained about the same at 97.55. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead There are a lot of earnings reports, and I won't try to list them all here. Check your portfolio for earnings events to prevent surprises. Monday Manufacturing data from New York will be available before the market open on Monday. Roblox (RBLX), Paysafe (PSFE), Niu Tech (NIU), and Porch Group (PRCH) are a few of the interesting earnings reports for Monday. Tuesday Tuesday brings several bits of economic data. Retail Sales data and Industrial Production data are available before the market opens. Business Inventories and Retail Inventories become available after the market opens. The Fed's Jerome Powell is scheduled to speak in the early afternoon. Adding to the Retail economic data, Walmart (WMT), Home Depot (HD), and Sea Limited (SE) have earnings reports in the morning. Wednesday Wednesday's economic data include Building Permits and Housing Starts before the market opens. After the market opens, we'll get an update on Crude Oil Inventories. The Fed will release last month's meeting minutes in the afternoon. Tencent (TCEHY), Nvidia (NVDA), Cisco (CSCO), Lowe's (LOW), Target (TGT), TJX (TJX), Synopsys (SNPS), and Bath Body Works (BBWI) are some of the earnings reports for Wednesday. Thursday Initial Jobless Claims data will be available on Thursday morning. We'll also get the Philadelphia Manufacturing Index on Thursday. Last month, the New York and Philadelphia indexes showed different readings on manufacturing activity. Applied Materials (AMAT), Estee Lauder (EL), Ross Stores (ROST), Farfetch (FTCH), Kohls (KSS), and Macy's (M) are some of the earnings reports for Thursday. Friday There is not much economic news scheduled for Friday. Deere & Company (DE), Foot Locker (FL), and Buckle (BKE) are a few earnings reports to watch on a light day for earnings. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side It's not hard to find bullish signals across the market. The S&P 500 and Dow Jones are sitting at record highs with no sign of weakness in the charts. Commodity prices show high demand for resources key to economic growth. The US Treasuries market and Corporate bond markets are both signaling confidence in US companies. For the Nasdaq, it's a bit harder to spot the bullishness since there is such a divide between companies that show strong guidance for the second half of the year and companies showing caution. Looking at the market leaders, we have bullish growth in Apple, Microsoft, Alphabet, and Facebook. And there is plenty of support for companies that continue to deliver despite the changing economic environment. Employment data shows companies continue to get back to business and are hiring workers despite the recent growth in the Delta variant of COVID. And while inflation continues to be high, it's beginning to show signs of slowing, if not pulling back a bit. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The consumer sentiment data released on Friday is the most prominent bearish signal moving into the middle of August. The numbers were lower than last summer at the height of the pandemic. And the numbers are at their lowest in ten years. The sentiment is a reflection of how exhausted the public is with the pandemic. With cases rising again and reports of full hospitals, consumers fear the worst. Could a resurgence in the pandemic shutter the economy again? If so, does the government still have resources to support after spending so much the past year? All eyes and ears will be on the Fed's Jerome Powell as he comments on Tuesday afternoon. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq moved sideways this week and continues to form a wedge within an uptrend as it heads toward a psychological resistance point at 15,000. On the positive side, the levels are: The high of this last week was a new all-time high at 14,896.47. That's more important than this week's high, which is just under the mark. The round number 15,000 is likely to be a new area of resistance. It is also the upper resistance line of the rising wedge. Break thru that point for another bullish run. On the downside, there are a few key levels: The 10d MA is at 14,800.63. The 21d EMA is at 14,725.27. 14,692.41 is the low of the past week. Also, a critical level for a break lower from the rising wedge. The 50d MA is at 14,489.15. 14,200 remains a critical level if the index moves downward. 14,000 has been an area of support/resistance. There is a pivot at 13,903.73, which A further pullback would likely hit the 200d moving average at 13,447.36. The index hasn't approached this line since rising above it in April 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Last week we questioned where the market wanted to move next. For the S&P 500 and Dow Jones, the answer was higher. For the Nasdaq, the answer was not sure. That uncertainty showed at the end of the week as well. Friday's daily candle is a bearish doji style candle that marks indecision and a possible reversal from an uptrend. There are both bulls and bears presenting a solid case right now. Keep an eye on your portfolio and make sure stops are up to day just in case things turn bearish. Also, watch out for any earnings events as the reactions have been severe to any bad news. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 8/2/2021 - 8/6/2021Summary: Where does the market want to go next? That is the question to be answered after a week of mixed economic news met with COVID fears and uncertainty around what's happening with the infrastructure bill and government debt. Equity markets set new record highs as Treasury yields rose, setting up a possible pivot for next week. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, August 2, 2021 Facts: +0.06%, Volume higher, Closing range: 15%, Body: 74% Good: Higher high, higher low, support at 14,650 area Bad: Could not hold morning highs, low A/D ratio Highs/Lows: Higher high, higher low Candle: Mostly red body with tiny upper and lower wicks Advanced/Decline: 0.79, more declining stocks than advancing stocks Indexes: SPX (-0.18%), DJI (-0.28%), RUT (-0.48%), VIX (+6.80%) Sectors: Utilities (XLU +0.77%) and Consumer Discretionary (XLY +0.29%) at the top. Energy (XLE -0.75%) and Materials (XLB -1.21%) at the bottom. Expectation: Sideways Despite being at a historically high level, Manufacturing activity data was lower than the previous month and lower than expectations. The result was a failed morning rally that took indexes higher before selling off in the afternoon. The only positive holding back more selling was the progress of the Infrastructure bill in congress. The Nasdaq finished the day with a +0.06% gain on higher volume than the previous day. The candle is mostly red body with tiny upper and lower wicks, reflecting the full day of selling after the markets opened higher in the morning. The closing range of 15% is below a 74% red body. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, August 3, 2021 Facts: +0.55%, Volume higher, Closing range: 99%, Body: 26% Good: High closing range, long lower wick as bulls come in after morning selling Bad: Lower low, no support at 14,650 Highs/Lows: Lower high, lower low Candle: Small green body above a long lower wick. Advanced/Decline: 0.67, three declining stocks for every two advancing stocks Indexes: SPX (+0.82%), DJI (+0.80%), RUT (+0.36%), VIX (-7.40%) Sectors: Energy (XLE +1.71%) and Health (XLV +1.39%) at the top. Real Estate (XLRE +0.41%) and Communications (XLC -0.45%) at the bottom. Expectation: Sideways or Higher Investors shrugged off worries of the Coronavirus Delta variant and turned bullish on a robust earnings week. After a morning dip, indexes moved higher, with the S&P 500 getting another record close. Apple and Health stocks led the way. The Nasdaq closed with a +0.55% after testing its 21d EMA in the opening hour. The candle has a long lower wick from the dip, but the index rallied the rest of the day to end with a 99% closing range above a small green body. The candlestick's pattern is a hanging man within an uptrend. Despite the afternoon rally, there were three declining stocks for every two advancing stocks. The hanging man and low A/D show the sellers are present in the market even as the indexes rose. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, August 4, 2021 Facts: +0.13%, Volume higher, Closing range: 59%, Body: 43% Good: Higher high/low, good closing range Bad: Dip after intra-day high, low a/d ratio Highs/Lows: Higher high, higher low Candle: Over half green body, but in the lower part of the candle, longer upper wick Advanced/Decline: 0.54, nearly two declining stocks for every advancing stock Indexes: SPX (-0.46%), DJI (-0.92%), RUT (-1.23%), VIX (-0.28%) Sectors: Communications (XLC +0.28%) and Technology (XLK +0.20%) at the top. Industrials (XLI -1.36%) and Energy (XLE -1.36%) at the bottom. Expectation: Sideways or Lower Only two sectors advanced today in a small gain for the Nasdaq while other major indexes took a step backward. Employment data disappointed investors already worried about the impact of the resurgence in the COVID pandemic, while the Fed's Clarida signaled possibly earlier tapering and interest rate hikes. The Nasdaq ended the day with a +0.13%, but nearly two declining stocks for every advancing stock. The green body covers over half the candle, sitting near the bottom under a longer upper wick. The closing range of 59% is not bad but comes after a pullback from the intraday high on a worsening outlook. Volume was higher than the previous day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, August 5, 2021 Facts: +0.78%, Volume lower, Closing range: 99%, Body: 84% Good: Large green body, high closing range with good A/D ratio Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Large green body over a small lower wick, no upper wick Advanced/Decline: 1.73, more than three advancing stocks for every declining stock Indexes: SPX (+0.60%), DJI (+0.78%), RUT (+1.81%), VIX (-3.84%) Sectors: Financials (XLF +1.31%) and Energy (XLE +1.13%) at the top. Materials (XLB -0.14%) and Health (XLV -0.41%) at the bottom. Expectation: Sideways or Higher The indexes set records again today after the morning jobless report came in better than expected. The anticipation of more positive news in Friday's employment data sent Treasury Yields and US equities higher. The Nasdaq closed at a new record high with a +0.78% gain today. Volume was lower than the previous day. After breaking into a new record level, the index moved sideways for the afternoon before a rally into the close that left the candlestick with an 84% green body and 99% closing range. There were more than three stocks that advanced for every two stocks that declined. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, August 6, 2021 Facts: -0.4%, Volume higher, Closing range: 46%, Body: 28% Good: Higher low, support after morning rotation dip Bad: Higher volume pullback from all time high Highs/Lows: Lower high, higher low Candle: Inside day with small red body in upper half of candle Advanced/Decline: 0.84, more declining stocks than advancing stocks Indexes: SPX (+0.17%), DJI (+0.41%), RUT (+0.53%), VIX (-6.54%) Sectors: Financials (XLF +2.02%) and Materials (XLE +1.45%) at the top. Real Estate (XLRE -0.17%) and Consumer Discretionary (XLY -0.68%) at the bottom. Expectation: Sideways or Higher The S&P 500 and Dow Jones closed at new record highs while the Nasdaq pulled back in a rotation from growth to cyclical sectors. Positive employment data in the morning added to the possibility of agreement on a $1 trillion infrastructure bill that pushed investors towards the cyclical sectors. The Nasdaq declined -0.4% for the day on higher volume than the previous day. The 28% red body is high in the candle, with a longer lower wick than the upper wick, creating a 46% closing range. The lower high and higher low make an inside day. There were more declining stocks than advancing stocks on the Nasdaq, but more broadly, gaining stocks outnumbered losing stocks in the NYSE. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week Where does the market want to go next? That is the question to be answered after a week of mixed economic news met with COVID fears and uncertainty around what's happening with the infrastructure bill and government debt. Equity markets set new record highs as Treasury yields rose, setting up a possible pivot for next week. The week began with manufacturing data that showed a slowing economic recovery. While the markets opened with gains, the gains were given back throughout a day of selling. It didn't help that the Delta variant of COVID continues to grow wildly as local governments begin enforcing new rules to help deal with the resurgence in the pandemic. Nonfarm Employment data from ADP on Wednesday came in lower than expected, adding to the worries. That sent yields lower on treasuries and sent indexes lower, although the Nasdaq held onto a gain for the day. That all changed over the next two days. Thursday's weekly continuing jobless claims showed a change in the employment trend, surprising investors and setting up for more positive employment news on Friday. Treasury yields moved higher while the gap between long-term and short-term treasuries widened significantly, bringing back worries from February of a steepening yield curve. The result was a reversal of the big tech and growth trade back into cyclical stocks on Friday. The Nasdaq dropped while the other indexes moved higher, setting more records. Adding to the momentum for cyclicals, the infrastructure bill is making progress in Congress and could see a vote as early as this weekend. There are still hurdles to overcome for the bill, and the government is still dealing with a possibly long fight over the debt ceiling. Investors showed caution throughout the week, and reactions to earnings reports were massive. Solar Edge (SEDG) and DataDog (DDOG) had gains of over 15% following their positive earnings reports and improved guidance. On the other hand, Roku (ROKU) declined -10%, Lemonade (LMND) dropped -13%, Zynga lost -20%, and Fastly fell a massive -25%, after signaling caution for the remainder of the year in their earnings calls. Robinhood (HOOD) hit the headlines as a new meme-stock with huge swings throughout the week. At one point, the recent IPO stock was up 140% for the week. It gave back a lot of those gains but still ended up 56% for the week. The Nasdaq advanced +1.11% for the week, setting a new all-time high on Thursday. The higher high and higher low, as well as the 81% closing range, is a bullish week. However, the long lower wick shows that sellers were still present. On the daily chart, a rising wedge will meet up with additional resistance at 15,000 that may cause a pullback before moving higher. Volume was higher than the previous week. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) closed the week at new records with +0.94% and +0.78% gains. The Russell 2000 (RUT) gained +0.97% for the week. The VIX volatility declined -11.35% for the week. Several sectors rallied into the lead throughout the week, but Financials ( XLF ) came from behind to end the week as the top sector. On Friday, the sector added 2% on top of gains earlier in the week. The rally came as employment data was better than expected, sending Treasury yields higher and brightening the prospects for big bank performance tied to the yields. Utilities ( XLU ) enjoyed the top spot on Monday and early Tuesday, rallied again on Thursday, but fell to second place on Friday. The defensive sector shows investors were cautious throughout the week as indexes set new records amidst worries the rising Delta variant might pull back the economic recovery. Health Services ( XLV ) took the lead spot on Wednesday, likely on the view that there will be an increased demand for vaccines and therapies that can handle the resurgence of the pandemic. Consumer Staples ( XLP ) was the only sector to decline this week, putting it at the bottom of the sector list. Yields for the US 30y, 10y, and 2y Treasuries all rose for the week. The yield curve steepened for the week, reversing a trend of a tightening gap between long-term and short-term yields. Both High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices declined. The gap between junk bonds and treasury yields widened. The US Dollar (DXY) advanced +0.75% for the week. Much of that gain came on Friday as investors reacted to solid employment data. Silver (SILVER) declined -4.49%, and Gold (GOLD) declined -2.84%. Crude Oil (CRUDEOIL1!) declined -7.63%. Timber (WOOD) declined -0.39%. Copper (COPPER1!) declined -2.55%. Aluminum (ALI1!) declined -0.88% but remains near record highs. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Microsoft (MSFT) had the biggest gain this week, advancing +1.60% as it nears a new all-time high. Alphabet (GOOGL) closed the week with a +0.75%, its highest weekly close on record. Amazon (AMZN) gained +0.52%, recovering some from last week's massive drop. Apple (AAPL) gained +0.19%. Only Amazon is trading below the 10w moving average. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Three of the four had gains this week. Carnival Cruise Lines (CCL) soared +6.61% for the week, although it is still well below the 10w and 40w moving average lines. Delta Airlines (DAL) gained +1.05%. Exxon Mobil (XOM) climbed by +0.50%. Marriott (MAR) dropped -3.01% for the week but closed above both moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). Ethereum (ETHUSD) continues to outperform the other three with a +22.00% gain this week. Bitcoin (BTCUSD) gained +10.76%. Litecoin (LTCUSD) and Bitcoin Cash (BCHUSD) are still trading near or below moving averages despite gaining +9.25% and +8.94% this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.713. The CNN Fear & Greed Index ended the week in the middle of the Fear range after dipping into Extreme Fear earlier in the week. The NAAIM money manager exposure index rose to 97.72. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead There are a lot of earnings reports, and I won't try to list them all here. Check your portfolio for earnings events to prevent surprises. Monday Next week will open with the JOLTs Job Openings data on Monday morning. BioNTech (BNTX), Trade Desk (TTD), Tyson Foods (TSN), AMC Entertainment (AMC), Chegg (CHGG), Cable One (CABO), Curaleaf (CURLF), Tilray (TLRY), Xpel (XPEL), Rocket Pharma (RCKT), SUMO Logic (SUMO), and Vuzix (VUZI) are some of the companies opening up another busy earnings week with reports on Monday. Tuesday Nonfarm Productivity and Unit Labor Costs data will be available Tuesday morning, while Weekly Crude Oil Stock will get an update after the market closes. Earnings reports for Tuesday include Coinbase (COIN), Unity Software (U), Upstart (UPST), and Open Lending (LPRO). Wednesday We'll get another look at inflation data on Wednesday with an update to the Consumer Price Index data in the morning. Crude Oil Inventories will come after the market opens. There is a 10y Treasury Note auction in the afternoon. Nio (NIO), eBay (EBAY), Opendoor (OPEN), Bumble (BMBL), Wendy's (WEN), and Lordstown Motors (RIDE) release earnings on Wednesday. Thursday The Produce Price Index data publishes on Thursday. We'll also get an update of Jobless Claims data that surprised investors last week. Wednesday's earnings reports include Walt Disney (DIS), Airbnb (BNB), DoorDash (DAH), Baidu (BIDU), Palantir (PLTR), Xpeng (XPEV), and LifeMD (LFMD). Friday Export and Import Price index data will wrap up the week's inflation data, while Consumer Sentiment data will give a reading on how consumers are weathering the resurging pandemic. There are no interesting earnings reports for the daily update on Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Economic data this week suggested businesses are pushing forward with the recovery despite a resurgence in COVID cases due to the Delta variant. That suggests we're learning to deal with the rise in cases through new protocols that allow businesses to stay open and consumers to continue spending. Unemployment is dropping as companies hire back workers to meet demand. An increase in both business and leisure travel is putting a strain on recovering airlines. Consumer debt is growing again. The One Trillion Dollar Infrastructure Bill is making good progress in Congress with just a few issues remaining before it goes to a vote, possibly this weekend or early next week. The passage of the bill will boost several sectors, including renewable energy, communications, materials, and industrials. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The sudden rise in Treasury yields on Thursday and Friday steepened the yield curve once again. The curve was steadily flattening since hitting its sharpest level in March. While some increase in Treasury Yields is maybe ok, a rapid increase like we saw earlier this year, as Biden took over, would bring back yield curve fears that drove corrections for the Nasdaq in February and April. The rising yields come as the government is beginning a long fight over the government debt ceiling. If the ceiling is met, the government will need to partially or wholly shut down and not issue new treasuries. The result will be volatility in the Treasuries market that will extend to equities that are so stretched at all-time highs that the impact could be a significant correction. Expect lots of caution among investors as the drama plays out in Washington. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq set another all-time high this week but dipped below the 21d EMA in the process. There is a rising wedge pattern that will meet up with expected resistance at 15,000. Watch for a breakout from the wedge in either direction. On the positive side, the levels are: The high of this past week was a new all-time high at 14,896.47. The round number 15,000 is likely to be a new area of resistance. On the downside, there are a few key levels: The 10d MA is at 14,766.86. The 21d EMA is at 14,673.64. 14,584.09 is the low of the past week. 14,500 support area was tested this past week and held. The 50d MA is at 14,379.94. 14,200 remains a critical level that would signal a bearish double top. 14,000 has been an area of support/resistance. There is a pivot at 13,903.73, which would be a technical support area if a correction is in order. A further pullback would likely hit the 200d moving average at 13,361.02. The index hasn't approached this line since rising above it in April 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up We continue to see these mini-cycles play out where the market rotates through cyclicals, growth, and defensive sectors while it tries to navigate an unchartered recovery from the worst global economic disaster in history. To get an idea of investments moving around, you can look at the sector rotations. I'll also leave with two charts. The first compares Growth to Value performance. It's easy to see the cycles play out here in January, May, and this Summer. As treasury yields move higher, we may see another move toward value investments. The second chart is Small-cap vs. Large-cap stocks. Here, you can see the considerable outperformance of small-caps in the last part of 2020, which played out until Treasury Yields started coming back down in March. With the possibility of more volatility in Treasuries, we may see another base in this chart, if not a turn back to the outperformance of small caps. There are no predictions here. Just observations, watching and learning. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 7/26/2021 - 7/30/2021Summary: This week's story has many parts, including Chinese stocks, Earnings Reports, the Infrastructure Bill, and a two-day Fed meeting which all ended with advances in small-caps and gains in commodity prices. Each made its influence felt across the market as investors shifted to respond to the implications of each. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, July 26, 2021 Facts: +0.03%, Volume higher, Closing range: 69%, Body: 27% Good: Slight gain on higher volume, healthy pause Bad: A/D low but not surprising with sideways move Highs/Lows: Higher high, higher low Candle: Thin green body in the middle of a short candle Advanced/Decline: 0.57, almost two declining stocks for every advancing stock Indexes: SPX (+0.24%), DJI (+0.24%), RUT (+0.33%), VIX (+2.33%) Sectors: Energy (XLE +2.47%) and Materials (XLB +0.84%) at the top. Industrials (XLI -0.05%) and Health (XLV -0.65%) were bottom. Expectation: Sideways or Higher Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week. The Nasdaq closed the day with a small +0.03% gain. It traded up and down throughout the day but stayed within a tight range. Volume was higher for the day. A thin green body sits in the middle of the short candle, with equal upper and lower wicks. The closing range was 69%. There were almost two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, July 27, 2021 Facts: -1.21%, Volume lower, Closing range: 51%, Body: 48% Good: Lower volume on pullback, longer lower wick from bounce at 14,500 support. Bad: Lower high, lower low, dip below 21d EMA Highs/Lows: Lower high, lower low Candle: Half red body above half lower wick, no upper wick Advanced/Decline: 0.28, more than three declining stocks for every advancing stock Indexes: SPX (-0.47%), DJI (-0.24%), RUT (-1.13%), VIX (+10.01%) Sectors: Utilities (XLU +1.72%) and Real Estate (XLRE +0.80%) at the top. Consumer Discretionary (XLY -1.01%) and Communications (-1.19%) were bottom. Expectation: Sideways or Lower Earnings reports releasing this week have been very positive, but investors are already looking beyond the reports to expectations for the second half of the year. With mounting fears around the new Delta variant of COVID and potential changes in monetary policy by the Fed, all major indexes retreated today. The Nasdaq closed with a -1.21% loss in a session that was mostly selling before a bounce at the 14,500 support level. Volume was lower than the previous day. The bounce brought the index back up to the middle of the candle for a 51% closing range. The 48% red body is in the upper half of the candle, over a long lower wick. There were more than three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, July 28, 2021 Facts: +0.70%, Volume lower, Closing range: 76%, Body: 31% Good: Rally in morning and afternoon to close with gain, A/D ratio above 1.0 Bad: Lower high, lower volume, dip at end of day Highs/Lows: Lower high, higher low Candle: Inside day, slightly longer lower wick Advanced/Decline: 2.0, two advancing stocks for every declining stock Indexes: SPX (-0.02%), DJI (-0.36%), RUT (+1.51%), VIX (-5.43%) Sectors: Energy (XLE +0.91%) and Communications (XLC +0.78%) at the top. Utilities (XLU -0.76%) and Consumer Staples (XLP -0.88%) at the bottom. Expectation: Sideways Investors survived another Fed meeting with stocks gaining after the Fed left monetary policy untouched but confirmed the economy is still on track and inflation appears transitory. Small caps and growth stocks soared while only a few of the SPDR sectors registered gains. The Nasdaq dipped at open but recovered quickly and ended the day with a +0.70% gain. Volume was lower for the day, but the 76% closing range and 31% green body are positive outcomes on an Inside day (lower high, higher low). The lower wick is slightly longer than the upper wick. There were two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, July 29, 2021 Facts: +0.11%, Volume lower, Closing range: 23%, Body: 10% Good: Higher high and higher low, A/D ratio Bad: Long upper wick relative to body as early gains faded Highs/Lows: Higher high, higher low Candle: Thin body at the bottom of candle with long upper wick Advanced/Decline: 1.41, more advancing stocks than declining stocks Indexes: SPX (+0.42%), DJI (+0.44%), RUT (+0.68%), VIX (-3.22%) Sectors: Consumer Discretionary (XLY +1.13%) and Materials (XLB +1.10%) at the top. Real Estate (XLRE -0.30%) and Communications (XLC -1.08%) at the bottom. Expectation: Sideways GDP growth was less than expected this morning while employment data confirmed the Fed's message that there is still more work to do in the economic recovery. That wasn't necessarily a bad thing for equities, as it means economic support will continue for some time. The Nasdaq closed the day with a +0.11% but gave back intra-day gains, creating a long upper wick over a thin green body. Volume was lower for the day. The closing range of 23% and 10% green body at the bottom of the candle represents a failed attempt to rally today, but the A/D ratio shows some broader gains under the surface. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, July 30, 2021 Facts: -0.71%, Volume lower, Closing range: 50%, Body: 50% Good: Bounce off 21d EMA and did not revisit low Bad: Could not hold intraday high from morning rally Highs/Lows: Lower high, lower low Candle: Half green body at the bottom of the candle, no lower wick Advanced/Decline: 0.45, two declining stocks for every advancing stock Indexes: SPX (-0.54%), DJI (-0.42%), RUT (-0.62%), VIX (+2.94%) Sectors: Materials (XLB +0.41%) and Real Estate (XLRE +0.32%) at the top. Energy (XLE -1.59%( and Consumer Discretionary (XLY -2.06%) at the bottom. Expectation: Sideways A disappointing earnings report from Amazon weighed down major indexes, but inflation data came in less than expected, helping give the market a boost in the morning. The Nasdaq closed the day with a -0.71% loss to end the week. Volume was lower and declining every day this week since Monday's all-time high in the index. The 50% green body sits at the bottom of the candle with no lower wick. The upper wick formed in the morning rally, but the index could not hold onto the intraday high. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week This week's story has many parts, including Chinese stocks, Earnings Reports, the Infrastructure Bill, and a two-day Fed meeting which all ended with advances in small-caps and gains in commodity prices. Each made its influence felt across the market as investors shifted to respond to the implications of each. Chinese stocks were already on a slide downward coming into the week. China started a regulatory crackdown on companies listed in foreign exchanges that started with the IPO of ride-hailing company Didi a few weeks ago. After several days of losses last week, the stocks opened the week again this week. They seemed to hit bottom and bounce mid-week, but the gains were gone by the end of the week. Earnings reports mainly were spectacular, but the responses by investors were inconsistent. Look to the results of the largest four mega-caps as an example. On Tuesday, Apple, Alphabet, and Microsoft released their earnings reports after the market closed. All three smashed expectations, which were already high given the height of the pandemic was one year previous. Yet, Apple and Microsoft sold off after hours while Google gained 3%. Microsoft recovered most of the loss the following day, but Apple could not. The reactions represent a still very nervous market. Even as companies turn in great results, the big fears of the year continue to be top of mind. Examples are supply chain pressures for Apple and a potential slow-down in Q3 of demand for Microsoft compared to the previous year. One area that isn't a concern is the advertising business, which is booming and helped send Alphabet yet higher. Tesla pleased investors with their earnings report on Monday, sending the stock up over 6% for the week. One company that did not please investors was Amazon. Although the company had great results, the outlook for the year did not meet expectations. The mega-cap dropped 7% on Friday and brought the major indexes down with it. The Fed had a two-day meeting this week and released a statement on Wednesday. The tone struck the right balance for investors. The economic recovery is on track, but there was more work to do, and so they would not change the anticipated timing of tapering. They noted inflation was still a concern but still held firm that the inflationary conditions are transitory. That sent the indexes higher on Wednesday. The new all-time high on Monday and subsequent pullback still have double-top potential. 14,200 is the critical level to watch for this week if there is a further pullback. The Nasdaq declined -1.11% for the week after getting a new all-time high on Monday. The result is a higher high and higher low and a not-so-terrible closing range of 47%. Volume was lower than the previous week. The market was good for small-caps this past week. With investors pulling profits out of the mega-cap stocks and the Fed keeping a supportive but hawkish stance, the Russell 2000 (RUT) ended the week with gains while the other major indexes declined. The RUT gained +0.75% for the week. The S&P 500 (SPX) lost -0.37%, while the Dow Jones Industrial Average (DJI) declined -0.36%. The VIX volatility advanced +6.05% for the week. Materials ( XLB ) was the top sector of the week as manufacturing and core durable goods data showed increase demand and was confirmed in consumer spending numbers. At the same time, the Infrastructure bill moved closer to becoming law. The growth in the sector was matched by increased prices in metal commodities required to support economic expansion. Energy ( XLE ) started the week strong and led several days throughout the week but ended in second place behind Materials at the end of the week. The three worst sectors were the growth sectors, all losing for the week. Technology ( XLK ), Communication Services ( XLC ), and Consumer Discretionary ( XLY ) were at the bottom of the weekly sector list. Yields for the US 30y, 10y, and 2y Treasuries all dropped for the week. The yields continue to slide, and the gap between long-term and short-term yields is tightening. Both High Yield Corporate Bond (HYG) prices declined, and Investment Grade Bond (LQD) prices advanced. Both remain high as demand for higher yield continues to push investors toward riskier corporate bond investments. The US Dollar (DXY) declined -0.88% for the week. The index fell sharply after the Fed's statements on Wednesday. Silver (SILVER) advanced +1.16%, and Gold (GOLD) advanced +0.71%, mostly reacting to moves in the USD. Crude Oil (CRUDEOIL1!) advanced +2.76%. Timber (WOOD) advanced +0.17%. Copper (COPPER1!) declined -1.18%. Aluminum (ALI1!) advanced +3.67%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Only Alphabet (GOOGL) gained among the big four this week, advancing +1.29% on a solid performance in the advertising business, helping the entire communications sector. Apple (AAPL) and Microsoft (MSFT) declined -1.82% and -1.64% but remained above the key weekly moving average lines. Amazon (AMZN) disappointed investors on Thursday, falling -9.00% for the week. The stock closed the week below its 10w moving average line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Marriot (MAR) was the top performer among the four this week, advancing +4.89% and moving back above its 10w moving average line. Exxon Mobil (XOM) gained +0.93% but remained below the 10w line. Carnival Cruise Lines (CCL) and Delta Airlines (DAL) both had losses this week and traded below the 10w moving average and 40w moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The cryptocurrencies continued to rebound from lows two weeks ago. Bitcoin (BTCUSD) gained +12.52% this week. Ethereum (ETHUSD) climbed by +16.53%. Litecoin (LTCUSD) advanced +9.81%. Bitcoin Cash (BCHUSD) rose +15.55%. Bitcoin and Ethereum are trading above the key moving averages, with Ethereum showing the best trend as the 10w line is above the 40w line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) rose above 0.8 on Tuesday but ended the week at 0.668. The CNN Fear & Greed Index moved back into the Extreme Fear level. The NAAIM money manager exposure index moved up to 78.39. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead It will be another big week of earnings reports. There are a lot of earnings reports, and I won't try to list them all here. Check your portfolio for earnings events to prevent surprises. Monday The ISM will release manufacturing purchasing managers index data on Monday. HSBC (HSBC), Mitsubishi UFJ (MUFG), Heineken (HEINY), and Zoominfo (ZI) are a few of the earnings reports for Monday. Tuesday Factory Orders data will be available in the morning, with the API Weekly Crude Oil Stock data coming after the market close. Alibaba (BABA), Eli Lilly (LLY), Amgen (AMGN), Fidelity (FIS), Marriott (MAR), Match Group (MTCH), Occidental (OXY), Ringcentral (RNG), LYFT (LYFT), Hyatt (H), and Skillz (SKLZ) are some of the many earnings reports for Tuesday. Wednesday Several economic indicators will get updates tomorrow. Mortgage data will be available early in the morning. Then Nonfarm Employment Change data will give an update on the labor market. Purchase Manager Index data for Services will show growth for the services sector, while Non-Manufacturing purchasing manager index data will provide a broader look at economic activity. Finally, Crude Oil Inventories get an update later in the morning. Toyota Motor (TM ), Sony (SONY), CVS (CVS), Booking (BKNG), General Motors (GM), Uber (UBER), Roku (ROKU), Allstate (ALL), Etsy (ETSY), AMC Entertainment (AMC), Fastly (FSLY), Lemonade (LMND), and DermTech (DMTK) are some of the exciting earnings reports for Wednesday. Thursday Initial Jobless Claims gets an update on Thursday. We will also get new Exports, Imports, and Trade Balance data. Novo Nordisk (NVO), Moderna (MRNS), Square (SQ), MercadoLibre (MELI), Cloudflare (NET), DataDog (DDOG), Zillow (Z), Penn National Gaming (PENN), Zynga (ZNGA), Virgin Galactic (SPCE), and Redfin (RDFN) report earnings. Many of these and others not listed had tremendous growth over the past year, and investors will be watching the year-over-year comparisons closely to see if growth continues at the same or similar pace. Friday More employment data will be available on Friday morning, including Average Hourly Earnings, Nonfarm Payrolls, and the Unemployment Rate. Interesting earnings reports for Friday include DraftKings (DKNG) and Riot Blockchain (RIOT). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Despite the pullback in the indexes this week, prices remain near all-time highs. The Fed reaffirmed steady progress for the economic recovery while stating that there is still more support needed and they would not change monetary policy in the short term. There is also some indication in pricing data that inflation is slowing down a bit, lending support toward the Fed's statements that it is transitory. Companies continue to receive support in low-interest rates and are turning that into growth opportunities. In particular, small caps are viewed as benefiting from the current economic cycle. While large-caps are seeing some profit-taking among investors, those investments are rotating back into small-caps. Commodity prices, especially Oil and Aluminum, are showing the bullishness among investors on economic growth. Aluminum is a metal required across many sectors of manufacturing, from consumer products to industrial applications. The demand for oil is increasing, raising oil prices and helping the Energy sector recover from recent selling. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The Delta variant of COVID is a top concern among investors. Statements made this weekend by leaders in D.C. stated there would not be another lockdown, but that does not mean there won't be any impact on the rising cases even among the vaccinated. Bad news here could send the indexes back into volatility and send prices lower. As earnings reports pass and investors look toward Q3, they may see a top here for many companies. The comparable year-over-year performance is favorable in Q2, but the expectation is that this growth will slow down in Q3. Time to take profits? -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq set another all-time high this week after moving back above the 21d EMA. If the index pulls back, the most critical level is around 14,200. A break below that level would signal a bearish double-top pattern. On the positive side, the levels are: The high of this past week was a new all-time high at 14,863.65. The round number 15,000 is likely to be a new area of resistance. On the downside, there are a few key levels: The 10d MA is at 14,664.22. The 21d EMA is at 14,597.11. 14,503.76 is the low of the past week. 14,500 support area was tested this past week and held. The 50d MA is at 14,262.13. 14,200 remains a critical level that would signal a bearish double top. 14,178.66 is the pivot low for the technical pattern. 14,000 has been an area of support/resistance. There is a pivot at 13,548.93. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It's never an easy ride when the indexes are making new all-time highs. Investors are waiting for an overdue correction but not wanting to exit just in case the markets move another leg up. Right now, with the Fed support, low interest rates, and outstanding performance of earnings reports, I would lean toward a bullish outlook. The fact that investor sentiment is in extreme fear is often contrarian to what happens. At the same time, there is always the possibility for a double-top pattern here with a move much lower. Keep trading with stops in place and be ready to reduce positions if the market shows weakness. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
2
Market Week in Review - 7/19/2021 - 7/23/2021Summary: This week ended much better than it began. All indications at the market open on Monday were that we were going to have a bearish week. The CNN Fear & Greed indicator was in the Extreme Fear range, and the put/call ratio was nearing 0.9. Worries about the new delta strain putting new pressures on the economic recovery sent investors into defensive sectors. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, July 19, 2021 Facts: -1.06%, Volume higher, Closing range: 71%, Body: 29% Good: Support around 14,200, good closing range Bad: Lower on higher volume, lower high, lower low Highs/Lows: Lower high, lower low Candle: Green body in center of candle, even upper and lower wicks Advanced/Decline: 0.27, more than three declining stocks for every advancing stock Indexes: SPX (-1.59%), DJI (-2.09%), RUT (-1.51%), VIX (+21.96%) Sectors: Consumer Staples (XLP -0.30%) and Health (XLV -1.05%) at the top. Financials (XLF -2.80%) and Energy (XLE -3.53%) were bottom. Expectation: Sideways or Lower The new Delta variant of the Coronavirus was top of mind for investors as the trading week began. Share prices of COVID vaccine-related companies soared today as it appeared governments would need to double down on vaccination efforts. The Nasdaq finished with a -1.06% loss for the day on higher volume. The index found support at the 14,200 level, closing with a 71% closing range above a 29% body that is right in the middle of the candle. The lower high and lower low continues a downtrend as more than three stocks declined for every stock that advanced today. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, July 20, 2021 Facts: +1.57%, Volume higher, Closing range: 80%, Body: 59% Good: Broad gains on higher volume to move back above 21d EMA Bad: Nothing Highs/Lows: Higher high, higher low Candle: Bullish green body with higher low and higher high, medium size upper and lower wicks Advanced/Decline: 2.69, more than five advancing stocks for every two declining stocks Indexes: SPX (+1.52%), DJI (+1.62%), RUT (+2.99%), VIX (-12.32%) Sectors: Industrials (XLI +2.80%) and Financials (XLF +2.48%) at the top. Utilities (XLU +0.43%) and Consumer Staples (XLP +0.03%) were bottom. Expectation: Sideways or Higher Small caps ended several days of losing to lead stocks higher today as investors snapped out of the pandemic fears that caused Monday's selling. Investors are warming back up to small caps as the US Dollar strengthens and yields in bonds are beginning to stabilize. The Nasdaq finished with a +1.57% gain on higher volume than the previous day. The 59% green body and 80% closing range represent a day of constant buying that ended with some profit-taking in the last few minutes before the market close. The index closed yesterday's gap down and regained the 21d exponential moving average, closing at the 14,500 support area. There were more than five advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, July 21, 2021 Facts: +0.92%, Volume lower, Closing range: 99%, Body: 92% Good: Close at high of day, bullish green body, A/D ratio Bad: Nothing Highs/Lows: Higher high, higher low Candle: No upper wick, very tiny lower wick, mostly green body Advanced/Decline: 2.36, almost five advancing stocks for every two declining stocks Indexes: SPX (+0.82%), DJI (+0.83%), RUT (+1.81%), VIX (-9.23%) Sectors: Energy (XLE +3.49%) and Financials (XLF +1.72%) at the top. Real Estate (XLRE -0.30%) and Utilities (XLU -1.10%). were bottom. Expectation: Sideways or Higher Stocks continued to rebound from last week's dip, with small caps leading the march upward, keeping the advance/decline ratio above 2.0 for a second day. Investors are looking more optimistic about the economic recovery among solid earnings reports from market leaders. The Nasdaq closed the day a +0.92%. Volume was lower, but buyers dominated the entire, with almost five advancing stocks for every declining stock. The candle has no upper wick because of the 99% closing range, and the green body covers 92% of the candle. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, July 22, 2021 Facts: +0.36%, Volume lower, Closing range: 87%, Body: 42% Good: High closing range with higher high and higher low Bad: Low volume, low A/D ratio Highs/Lows: Higher high, higher low Candle: Longer lower wick, a medium size green body in upper half Advanced/Decline: 0.32, three declining stocks for every advancing stock Indexes: SPX (+0.20%), DJI (+0.07%), RUT (-1.55%), VIX (-1.23%) Sectors: Technology (XLK +0.74%) and Health (XLV +0.74%) at the top. Financials (XLF -1.09%) and Energy (XLE -1.12%) were bottom. Expectation: Sideways or Lower Rising jobless claims surprised the market this morning, sending cyclical sectors lower and causing a reversal in small caps after several days of gains. Investors rotated back into growth stocks and big tech, which are more resilient to the swings in the economy. The Nasdaq finished the day with a +0.36% on lower volume than the previous day. The day ended with an 87% closing range for the index. A 45% body sits in the upper half of the candle, above a long lower wick formed in the morning as investors absorbed the economic news. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, July 23, 2021 Facts: +1.04%, Volume higher, Closing range: 94%, Body: 57% Good: High closing range on higher volume Bad: A/D still below 1.0 Highs/Lows: Higher high, higher low Candle: Gap up at open after several green days, mostly green body in upper half of candle Advanced/Decline: 0.69, About three declining stocks for every two advancing Indexes: SPX (+1.01%), DJI (+0.68%), RUT (+0.46%), VIX (-2.77%) Sectors: Communications (XLC +2.48%) and Utilities (XLU +1.28%) at the top. Financials (XLF +0.17%) and Energy (XLE -0.37%) were bottom. Expectation: Sideways or Higher A rally in Social media stocks helped send the major indexes to new all-time highs. The optimism spread to other big tech stocks, giving the Nasdaq a high volume advance but leaving the advance/decline ratio below 1.0. The Nasdaq finished with a +1.04% gain on higher volume to reach a new record close. The green candle caps a week of all green candles compared to the previous week's all red candles. Today's candle had a 57% green body in the upper half of the candle. The 94% closing range represents a day of bullish buying after a quick dip in the morning created the lower wick. There were almost three declining stocks for every two advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week This week ended much better than it began. All indications at the market open on Monday were that we were going to have a bearish week. The CNN Fear & Greed indicator was in the Extreme Fear range, and the put/call ratio was nearing 0.9. Worries about the new delta strain putting new pressures on the economic recovery sent investors into defensive sectors. The Nasdaq gapped down at open on Monday and continued to drop until it reached the 14,200 level. The index found support at that level and reversed. The upside reversal didn't end until a new all-time high was reached on Friday. The 14,200 support area formed from the February and April highs. It became resistance in June before the index moved higher. On Monday, the index tested the level several times, and the support was held. This will be a critical area to watch if another pullback occurs in the coming weeks. After the index found support, it just took a few pieces of good news to get the rally back on track. That news came in a few forms. First, earnings reports were largely positive this week. IBM, Johnson & Johnson, Coca-Cola, and Intel all had great earnings reports. But the biggest surprise of the week was SNAP, which beat estimates and doubled revenue from a year earlier on robust advertising income. That was enough to send the entire Communications sector higher. Another boost to big tech came in analyst upgrades for Nvidia and Microsoft. Analysts improved their price targets for the two companies ahead of earnings. Finally, OPEC helped a bit by deciding to increase production to meet a forecast of higher demand. That's a great indicator of confidence in the continuing economic recovery. The news sent the Energy sector higher on Wednesday. Small caps in the Russell 2000 outperformed on Tuesday and Wednesday. The segment sold off the last three weeks, causing valuations to be lower than the larger cap segments. With the low valuations combined with a strengthening USD and continuing low Treasury yields, it was a perfect context for small caps to get an influx of investment. Chinese stocks such as Alibaba, JD.com, UP Fintech, and FUTU Holdings were beaten down this week on fears that the Chinese government will crack down on companies listed in foreign exchanges. The Nasdaq advanced +2.84% for the week, recovering all of the previous week's loss and closing at an all-time high. Volume was lower than the previous week. The lower low and higher high for the week create an outside bullish candle with a 99% closing range. Along with the Nasdaq, the S&P 500 (SPX) and Dow Jones Industrial Average (DJI) closed the week at all-time highs, advancing +1.96% and +1.08%. The Russell 2000 (RUT) had its first weekly gain in four weeks, rising +2.15%. The VIX volatility declined -6.78% for the week. Utilities ( XLU ) dropped to the bottom of the sector list after leading in the previous week. It was all about Growth stocks this week as investors put off fears of the economy and looked forward to record earnings reports from big tech. Communication Services ( XLC ) led the week thanks to huge earnings beat by SNAP and Twitter. Consumer Discretionary ( XLY ) and Technology ( XLK ) were second and third. Energy ( XLE ) briefly moved into the top spot on Wednesday afternoon before falling back and ending the week in second-to-last place. Only Utilities and Energy declined for the week. Yields for the US 30y, 10y, and 2y Treasuries all dropped for the week. The yields continue to slide, and the gap between long-term and short-term yields is tightening. Both High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) advanced +0.21% for the week. Silver (SILVER) declined -1.93%, and Gold (GOLD) declined -0.52%. Crude Oil (CRUDEOIL1!) declined -0.13%. Timber (WOOD) advanced +1.89%. Copper (COPPER1!) advanced +4.07%. Aluminum (ALI1!) advanced +1.00%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps The four largest mega-caps had strong performances this week. Alphabet (GOOGL) gained +4.76% after the SNAP earnings call boosted the entire communications sector. Microsoft (MSFT) gained +3.18% thanks to a price target upgrade. Amazon (AMZN) advanced +2.32%. Apple (AAPL) gained +1.48%. All four are trading above their 10w and 40w moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. All four have green candles this week, although Exxon Mobil (XOM) could not hold onto intra-week highs, ending the week with a -0.49% loss. Carnival Cruise Lines (CCL) climbed by +4.97%. Marriott (MAR) gained +3.06%. Delta Airlines (DAL) advanced +0.87%. Delta and Carnival are trading below both the 10w and 40w moving average lines. Exxon and Marriott are trading above the 40w line but remain below the 10w line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The cryptocurrencies got a boost this week with another mention from Elon Musk. Ethereum (ETHUSD) had the biggest gain, advancing +14.17%. Bitcoin (BTCUSD) rose +7.24%. Litecoin (LTCUSD) gained +4.94%. Bitcoin Cash (BCHUSD) gained +3.06%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) rose above 0.9 on Monday but then recovered, ending the week at 0.702. The CNN Fear & Greed Index moved into the Extreme Fear level late last week. It moved back toward neutral but remained on the Fear side. The NAAIM Money Manager exposure index declined to 71.04 this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Big tech will dominate the earnings calendar this week. The earnings reports will be as important as the economic news calendar. There are a lot of earnings reports, and I won't try to list them all here. Check your portfolio for earnings events to prevent surprises. Monday New Home Sales data will be available on Monday morning after the market opens. Tesla (TSLA) on Monday will kick off a full week of big tech earnings. Tuesday Durable Goods Orders data made available before the market opens on Tuesday indicates the level of economic activity. Analysts expect June to be higher than May after the May number came in lower than expected. CB Consumer Confidence for July will also be available in the morning after the market opens. An update to API Weekly Crude Oil Stock arrives after the market closes. Three of the largest companies in the world report earnings on Tuesday. Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL) are all expected to report strong year-over-year growth, but investors will be looking to guidance for future quarters. Visa (V), United Parcel Service (UPS), Starbucks (SBUX), Raytheon (RTX), 3m (MMM), AMD (AMD), General Electric (GE), Southern Copper (SCCO), Enphase (ENPH), Teladoc (TDOC), and Logitech (LOGI) are some of the other interesting companies also reporting on Tuesday. Wednesday Goods Trade Balance data, Retail Inventories, and Crude Oil Inventories will be available on Wednesday. The Fed will make a statement in the afternoon and announce any Interest Rate change (expected to be none). The tone of the message and press conference will have an impact on investor sentiment. Earnings reports on Wednesday include Facebook (FB), PayPal (PYPL), Pfizer (PFE), Thermo Fisher Scientific (TMO), Shopify (SHOP), McDonald's (MCD), Qualcomm (QCOM), Boeing (BA), ADP (ADP), Ford (F), Spotify (SPOT), and ServiceNow (NOW). Thursday GDP data for Q2 will publish on Thursday. Initial Jobless Claims and Pending Home Sales will also get an update. Amazon.com (AMZN), Mastercard (MA), AstraZeneca (AZN), Twilio (TWLO), Baidu (BIDU), Pinterest (PINS), Fortinet (FTNT), DexCom (DXCM), Yum! Brands (YUM), and Expedia (EXPE) are a few earnings reports that stand out among another huge list. Friday New inflation data becomes available on Friday with the updated PCE Price index data for June. Additional Employment Data and Consumer Sentiment data becomes available as well. Berkshire Hathaway (BRKa), Procter & Gamble (PG), Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX), -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Earnings season is in full swing. Every earnings season is a bit different. Many of the first reports beat expectations, and investors reacted positively to the news. This week brings the big tech earnings reports, which should also be very positive. The reaction will provide a lift to the big tech stocks and the overall market. Treasury Yields stabilized this week after several days of volatility. With the US Dollar strengthening and yields remaining low, investors will continue to look at US equities to get returns that beat still high inflation. The economic recovery may be slowing, but it is still growing at a record pace. Debt is still cheap for companies to fund growth and profit from the global recovery. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Supply chain challenges continue to be a top worry as the recovery moves forward. Manufacturing PMI data on Friday shows an increase in activity for the sector, but challenges keep popping up with raw materials and shipping constraints. Extreme weather events in Germany and China made issues worse this week. As valuations among big tech and growth stocks continue to soar and the indexes are at all-time highs, expectations will also be at all-time highs. Investors will be watching closely to earnings reports, the results, the guidance, and the dialogue on earnings calls. Investors may see great reports this week and decide to take profits "at the top." -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq set another all-time high this week after moving back above the 21d EMA. If the index pulls back, the most critical level is around 14,200. A break below that level would signal a bearish double-top pattern. On the positive side, the levels are: The high of this past week was a new all-time high at 14,846.06. The round number 15,000 is likely to be a new area of resistance. On the downside, there are a few key levels: The 10d MA is at 14,595.36. The 21d EMA is at 14,510.57. 14,500 has been a support area in the past. 14,178.66 is the low of the past week. A break below this level would signal a bearish double top. The 50d MA is at 14,118.58. 14,000 has been an area of support/resistance. There is a pivot at 13,548.93. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Two weeks with opposite characteristics. The previous week gave us give red candles while this week gave us five green candles. The volatility in bonds and equities was enough to raise some fears among investors but not enough to drive a correction. It looks like we could get some more gains this week with the big tech earnings reports among hundreds of other earnings reports. The reports so far have huge year-over-year comparisons in results, but investors are also getting positive guidance for the year. If we do not get gains and the index pulls back again, watch for the 14,200 level to hold. If we dip below that level, it would be a bearish signal. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
4
Market Week in Review - 7/12/2021 - 7/16/2021Summary: Worries over the health and speed of the recovering economy remained this week, and the big mega-caps weren't enough to keep the indexes moving higher. Investors weren't sure what to do with a mixed bag of economic data, causing volatility in bonds and equities. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, July 12, 2021 Facts: +0.21%, Volume higher, Closing range: 69%, Body: 12% Good: Higher high, higher low, body and closing range in upper half of candle Bad: Red body, low advance/decline ratio Highs/Lows: Higher high, higher low Candle: Thin red body in upper half of the candle, long lower wick from morning dip Advanced/Decline: 0.8, more declining stocks than advancing stocks Indexes: SPX (+0.35%), DJI (+0.36%), RUT (+0.08%), VIX (-0.06%) Sectors: Financials (XLF +0.98%) and Real Estate (XLRE +0.87%) at the top. Energy (XLE -0.15%) and Consumer Staples (XPL -0.16%) were the bottom. Expectation: Sideways or Higher New all-time highs across three of the major indexes is not a bad way to start the week. The 10-year Treasury note auction passed without many surprises, giving the indexes a boost in the afternoon. The Nasdaq closed with a +0.21% advance on slightly higher volume. The candle shows a bit of indecision as markets dipped in the morning but then recovered and made gains in the afternoon after the auction. The 12% Red body in the upper half of the candle is above a long lower wick. The closing range is 69%. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, July 13, 2021 Facts: -0.38%, Volume higher, Closing range: 12%, Body: 26% Good: Higher high, outside day that keeps index in uptrend, support at ~14,675 Bad: Long upper wick from afternoon selling, red body at bottom of candle Highs/Lows: Higher high, lower low Candle: Outside day, long upper wick signals a bearish reversal day Advanced/Decline: 0.21, five decline stocks for every advancing stock Indexes: SPX (-0.35%), DJI (-0.31%), RUT (-1.88%), VIX (+5.88%) Sectors: Technology (XLK +0.41%) and Consumer Staples (XLP -0.03%) at the top. Consumer Discretionary (XLY -1.20%) and Real Estate (XLRE -1.30%) were the bottom. Expectation: Lower Higher than expected inflation data wasn't enough to keep the indexes from making new highs, but the rally couldn't last, and markets closed lower on Tuesday. A weaker than expected 30y bond auction sent yields higher and spooked investors in the afternoon. Big tech held onto gains, helping the Technology sector end the day in the positive. The Nasdaq closed the day with a -0.38% loss on higher volume. The candle has a long upper wick that represents the morning rally which turned into an afternoon sell-off. The 26% red body sits at the bottom of the candle, creating a 12% closing range above a short lower wick. The outside day with a bearish reversal confirms the underlying weakness where five stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, July 14, 2021 Facts: -0.22%, Volume lower, Closing range: 8%, Body: 86% Good: Nothing Bad: Thick red body, closing range, lower high Highs/Lows: Lower high, lower low Candle: Mostly red body surrounded by tiny wicks Advanced/Decline: 0.28, more than three decline stocks for every advancing stock Indexes: SPX (+0.12%), DJI (+0.13%), RUT (-1.63%), VIX (-4.62%) Sectors: Consumer Staples (XLP +0.89%) and Real Estate (XLRE +0.88%) at the top. Financials (XLF -0.46%) and Energy (XLE -2.98%) were the bottom. Expectation: Lower Apple gets an upgrade, and big tech rises again as the rest of the market fades around it. Producer Price Index data was higher than expected. Still, Jerome Powell continued to focus on inflation being transitory and the need for further economic support until the jobs market fully recovers. Despite the advances in big tech, the Nasdaq closed -0.22% lower. Showing the lopsided gains in the market, the QQQ ETF (weighted by cap size) was up +0.18%, while the QQQE ETF (equal-weighted) was down -0.12%. The Nasdaq candle is almost all red body (86%), with tiny upper and lower wicks. The closing range is 8%. There were more than three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, July 15, 2021 Facts: -0.70%, Volume higher, Closing range: 46%, Body: 47% Good: Bounce off support at 21d EMA Bad: Another LH/LL on slightly higher volume Highs/Lows: Lower high, lower low Candle: Thick red body in upper half of candle, long lower wick Advanced/Decline: 0.5, two declining stocks for every advancing stock Indexes: SPX (-0.33%), DJI (+0.15%), RUT (-0.55%), VIX (+4.17%) Sectors: Utilities (XLU +1.13%) and Consumer Staples (XLP +0.41%) at the top. Technology (XLK -0.82%) and Energy (XLE -1.40%) were bottom Expectation: Sideways or Lower Is the big tech trade finished? Or is this just a pause before another leg up? Economic data in the morning caused volatility at the market open, which eventually went to the bears. The selling continued until the afternoon when the buyers came back into the market. The Nasdaq closed the day with a -0.70% loss on slightly higher volume. The candle has a thick red body in the upper half and a long lower wick in the lower half. The closing range is 46%, and the body covers 47% of the candle. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, July 16, 2021 Facts: -0.80%, Volume lower, Closing range: 7%, Body: 81% Good: Nothing Bad: Close below 21d EMA, mostly red body, low closing range Highs/Lows: Lower high, lower low Candle: Almost entirely red body, upper wick longer than lower wick Advanced/Decline: 0.32, three declining stocks for every advancing stock Indexes: SPX (-0.75%), DJI (-0.86%), RUT (-1.24%), VIX (+8.47%) Sectors: Utilities (XLU +1.01%) and Health (XLV +0.27%) at the top. Materials (XLB -1.51%) and Energy (XLE -2.83%) were bottom. Expectation: Lower The market gave us a painful Friday to end a painful week. Utilities were again the top sector as investors took defensive positions brought on by worries over the pandemic and a slowing economic recovery. The Nasdaq closed with a -0.8% loss. Volume was lower, but the candle was distinctly bearish with a large 81% red body and a dismal 7% closing range. The upper wick, created by an early morning rally, is slightly longer than the lower wick. The index got some support at 14,500 but quickly reversed, moving below the 21-day exponential moving average. There were three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week Worries over the health and speed of the recovering economy remained this week, and the big mega-caps weren't enough to keep the indexes moving higher. Investors weren't sure what to do with a mixed bag of economic data, causing volatility in bonds and equities. All seemed ok after an uneventful 10-year Treasury note auction on Monday. That was the only news of the day. After the auction, the Nasdaq rallied into close and continued the rally into the following day. That's when the trouble started. Tuesday kicked off with higher than expected Consumer Price Index data. Equities continued to rally, but the inflation worries hit the 30-year bond auction. The low demand for the bond sent yields higher. Only big tech companies held onto gains by the end of the day. The big tech rally got another boost on Wednesday when JP Morgan analysts upgraded the price target for Apple after news that the company is boosting iPhone production by as much as 20%. The rally extended to other tech mega-caps and set up a situation where a pullback for the big tech stocks was due. On Thursday, Federal Reserve Banks in New York and Philadelphia released their Manufacturing Data. The New York numbers were at all-time highs while the Philadelphia numbers were lower than expected. Although the Philadelphia numbers were below expectations, they are still high on a historical basis. The numbers supported the narrative that the economic recovery is slowing, sending Treasury Yields back down to where they started the week. And yet, the US Dollar strengthened. The economic worries, volatility in bonds, and extended prices in big tech all combined to sink the indexes lower on Friday, closing a painful week for growth investors. The Nasdaq declined -1.87% for the week. Volume was higher than the previous week. Despite the decline, the index did manage a higher high and a higher low for the week. The closing range of 4% is the lowest in over a year, representing the selling into the close that occurred on Friday. Small Caps suffered the most this week, with the Russell 2000 (RUT) dropping -5.12%. The S&P 500 (SPX) declined -0.97% for the week. The Dow Jones Industrial Average (DJI) lost -0.52%. The VIX volatility advanced +14.04% for the week. The sectors ended the week in a very character than they started the week. None of the leading sectors early in the week were leading by the end of the week. Financials ( XLF ) started the week in first as investors anticipated earnings reports from big banks that began on Tuesday. By Friday, the sector slipped to the middle of the list, ending the week with a -1.61% decline. Technology ( XLK ) and Communication Services ( XLC ) took over the top spots for Tuesday and most of Wednesday. They also reversed downward and ended the week with losses. The only sectors to end the week with gains were Utilities ( XLU ), Consumer Staples ( XLP ), and Real Estate ( XLRE ). The defensive sectors gained ground at the end of the week as worries over the economy grew among investors. Energy ( XLE ) was at the bottom of the list, dropping -7.89% this week. OPEC+ continues to have disagreements, destabilizing the sector along with the price of oil. Add the fears of a slowing recovery, and investors are exiting positions in the sector that performed well in the first half of 2021. Treasury yields on the 30y bond and 10y note slid further this week. Although the 10y note auction passed without surprises, the 30y bond auction was weaker than expected, causing yields to rise midweek. However, the levels returned to where they started the week, and the slide continues. The 2y yields rose slightly for the week as the yield curve continues to flatten. The signal to read here is that investors see more risk in shorter-term debt, requiring more reward (yield). The outlook for the short term is growing more negative. High Yield Corporate Bond (HYG) prices declined but remained near pre-pandemic highs. Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) advanced +0.66% for the week. Silver (SILVER) declined -1.70%, and Gold (GOLD) advanced +0.16%. Crude Oil (CRUDEOIL1!) declined -3.20%. Timber (WOOD) advanced -4.30%. Copper (COPPER1!) declined +-0.12%. Aluminum (ALI1!) declined -0.61%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Three of the four largest mega-caps advanced for the week. Alphabet (GOOGL) had the biggest gain with a +1.16% advance. Microsoft (MSFT) gained +1.01%. Apple (AAPL) rose +0.88%. All three pulled back from intra-week highs on Thursday and Friday. Amazon (AMZN) dropped -3.92% for the week. All four are trading above key moving averages. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. The situation was not good for the four recovery stocks. Carnival Cruise Lines (CCL) took the biggest hit with a -13.77% decline, dropping below the 40w moving average. Delta Airlines (DAL) declined -6.66%, despite beating all analyst expectations on the top line, bottom line, and key metrics. Marriott (MAR) fell -5.21%. Exxon Mobil (XOM) dropped -6.39%, pulling the Energy sector lower. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The declines continue in the four cryptocurrencies. Bitcoin (BTCUSD) lose another -7.44%. Ethereum (ETHUSD) dropped -10.98%. Litecoin (LTCUSD) declined -10.70%. Bitcoin Cash (BCHUSD) fell -11.76%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) ended the week at 0.859. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index moved into the Extreme Fear level. The indicator is at 23, which is the lowest since the 2020 pandemic crash. The NAAIM Money Manager exposure index rose to 93.27 this week. The survey occurs on Wednesdays, so the number does not include any selling on Thursday and Friday. However, it's still interesting that the index rose after the previous week where the market was already weakening. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead The week will start slow, but earnings reports will pick up as Financials kick off the earnings season. Monday There is not much economic news scheduled for Monday. IBM will release earnings on Monday, which may be an early indicator of what's to come from other tech giants this earnings season. Tuesday Building Permits and Housing Starts data will be available on Tuesday morning before the market opens. API Weekly Crude Oil Stock gets released after the market closes. Netflix (NFLX), Philip Morris (PM), Chipotle (CMG), KeyCorp (KEY), Haliburton (HAL), and United Airlines (UAL) will report earnings on Tuesday. Wednesday Crude Oil Inventories are the primary economic data for Wednesday, although some may be interested in Mortgage data released before the market opens. Johnson & Johnson (JNJ), ASML Holding (ASML), Coca-Cola (KO), Verizon (VZ), and Fidelity Financial (FNF) are some of the interesting reports for Wednesday. Analysts will listen closely to Coca-Cola statements around supply chain costs and whether they are transferring increased costs along to consumers. Thursday The weekly Initial Jobless Claims become available on Thursday before the market opens. After the market opens, Investors will get Existing Home Sales data for June. Intel (INTC), Abbott Labs (ABT), AT&T (T), Snap (SNAP), ABB (ABB), Twitter (TWTR), DR Horton (DHI), Southwest Airlines (LUV), Dominos Pizza (DPZ), and American Airlines (AAL) release earnings on Thursday. Friday The Manufacturing and Services purchasing manager indexes released on Friday will be another indicator of economic activity and the speed of the recovery. Friday's earning reports include Honeywell (HON), American Express (AXP), and Schlumberger (SLB). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side There may be a slowdown in the speed of growth compared to the first half of the year, but the economy is still expanding at a historically high rate. The US Dollar is strengthening. Investors continue to support high prices (low yields) in both investment grade and junk corporate bonds, showing confidence in US businesses to be successful in the near term. That confidence is coming from the ability for businesses to secure low interest rates for debt to fund growth, while consumers are continuing to drive demand via increased activity (Retail Sales is higher than expected). Inflation remains high, but consumers are still purchasing, using a record amount of savings to fund new purchases. The Fed's Jerome Powell reaffirmed again this week that they believe inflation is transitory, but they are more than willing to step in to control inflation. Although an interest rate hike would cause some pause, the bigger evil for growth stocks is out-of-control inflation. The slightly more hawkish Fed can help growth investors remain confident in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side At all-time highs, the market was due for a pullback. Despite gains among big tech, the last two weeks have shown a broader weakness in equities. Much of that is from fears of a slowing economic recovery, driving volatility in the bond market, and spilling over into equities. Although Retail sales were higher than expected, Consumer sentiment and expectations data were low. Analysts expected the consumer numbers to be higher since we are emerging from the long pandemic. However, it seems consumers are worried about new variants and also stressed by higher prices for goods. The question is, will there be a further correction, or is the minor pullback this week enough to get support and move higher. The CNN Fear & Greed index moved into the Extreme Fear range, based primarily on the weakness in stock prices and high demand for long-term bonds. That means big investors see a worsening situation on the horizon and possibly a move lower for the indexes. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq set another all-time high this week before pulling back again and closing below the 21d exponential moving average. The index closed with a higher low but with a dismal closing range, sliding into the end of the week. On the positive side, the levels are: The 21d EMA is at 14449.77. 14,500 has been a support area in the past, get back above this area to move higher. The 10d MA is at 14,625.59. The high of this past week was a new all-time high at 14,803.68. The mid-point of the regression trend from the 5/12 low points to 14,989 by the end of the week. The round number 15,000 is likely to be a new area of resistance. On the downside, there are a few key levels: The low of this past week is 14,413.32. The low of the previous week is 14,371.59. Keep making higher lows to keep the uptrend intact. The 50d MA is at 14,004.19. 14,000 has been a key area of support/resistance. There is a pivot at 13,548.93. There is a support area at 13,000. 13,002.54 is a pivot from May. 13,119.60 is the 200d MA. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was a tough week, especially for growth investors. Economic signals are all over the place, causing reactions among investors. Ultimately, volatility will have investors exiting riskier positions and moving to safe-havens. We saw that through the increased demand for long-term bonds and the rise of defensive sectors to the top of the sector list the past two weeks. As it stands, the Nasdaq is still in an uptrend. It looks worrisome, but we have to wait and see what happens in the coming week. A further decline could mean a 5-6% correction before the uptrend resumes. Or the index could turn back toward new all-time highs sooner if new data indicate a more robust economic recovery. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
3
Market Week in Review - 7/6/2021 - 7/9/2021Summary: This week's uncertainty around how fast the economy is recovering drove volatility in cyclical sectors while sending Treasury yields on a slide that exasperated investors' worries. Still, the major indexes narrowly secured gains for the week while the S&P 500 and Dow Jones Industrial Average (DJI) set new records. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, July 6, 2021 Facts: +0.17%, Volume higher, Closing range: 85%, Body: 1% Good: High closing range, long lower wick shows recovery from dip Bad: Volatile outside day with doji star candle, bearish pattern Highs/Lows: Higher high, lower low Candle: Doji star candle with longer lower wick, outside day Advanced/Decline: 0.3, more than three declining stocks for every advancing stock Indexes: SPX (-0.20%), DJI (-0.60%), RUT (-1.36%), VIX (+9.08%) Sectors: Real Estate (XLRE +0.89%) and Utilities (XLU +0.42%) at the top. Financials (XLF -1.75%) and Energy (XLE -3.25%) were at the bottom. Expectation: Sideways or Lower It was a roller-coaster day for the market as prices dipped in the morning and recovered in the afternoon. Investors reacted to the Purchasing Managers index data that indicates the economic recovery may be slowing. Although the Nasdaq could finish the day with a small gain, most stocks across the index declined for the day. The Nasdaq closed with a +0.17% gain, beginning the day with a gap at open but quickly selling off in the morning. Eventually, the bulls came in and brought the index back just above where it opened. The volume was higher than the previous day, and the mid-day reversal ended with a high 85% closing range. The close, being just above the open, created a slim 1% body. The outside day, doji star candle signals a bearish reversal pattern. Despite the gain in the index, there were more than three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, July 7, 2021 Facts: +0.01%, Volume higher, Closing range: 28%, Body: 51% Good: Higher high, higher low Bad: Couldn't hold morning high, low A/D ratio Highs/Lows: Higher high, higher low Candle: Large red body with no upper wick, lower wick created from a morning dip Advanced/Decline: 0.33, three declining stocks for every advancing stock Indexes: SPX (+0.34%), DJI (+0.30%), RUT (-0.95%), VIX (-1.46%) Sectors: Materials (XLB +1.04%) and Industrials (XLI +1.00%) at the top. Communications (XLC -0.15%) and Energy (XLE -1.63%) were at the bottom. Expectation: Sideways or Lower Investors rotated back to cyclical stocks after they underperformed yesterday. Mega-caps also did well on a day with no huge surprises in economic news. Jobs data was a bit lower than expected, but not bad, and there were no unexpected statements in the Fed minutes. The Nasdaq ended the day with a +0.01% gain, carried mainly by mega-caps. There continues to be a much higher number of declining stocks than advancing stocks, with a ratio of 3 to 1 today. The closing range of 28% follows a morning gap-up that quickly sold off to create a long lower wick. The index recovered some of the loss, leaving a 51% red body over the long lower wick. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, July 8, 2021 Facts: -0.72%, Volume lower, Closing range: 79%, Body: 63% Good: Closed above 14,500 support area, lower volume on down day Bad: Gap down at open, lower high, lower low Highs/Lows: Lower high, lower low Candle: Large green body in the middle of two short wicks, the upper wick is slightly longer Advanced/Decline: 0.37, nearly three declining stocks for every advancing stock Indexes: SPX (-0.86%), DJI (-0.75%), RUT (-0.94%), VIX (+17.27%) Sectors: Real Estate (XLRE -0.09%) and Consumer Discretionary (XLY -0.25%) at the top. Industrials (XLI -1.29%) and Financials (XLF -2.00%) were bottom. Expectation: Sideways or Lower Is it a pullback from a new high and or the start of a more significant correction? You won't find any easy answers in the data. A few weeks ago, investors were worried about an overheating economic recovery, and now they seem worried about a slowing recovery. The Nasdaq closed with a -0.72% decline on lower volume. The gap-down at open looked severe and dropped the index below the 14,500 support area, but a mid-day rally brought it back above the support line. The rally created a 63% green body. Prices faded in the late afternoon to create an upper wick and finish the day with a 79% closing range. The lower high and lower low combination is the first in several weeks of gains. The advance/decline line remains low, with almost three declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, July 9, 2021 Facts: +0.98%, Volume lower, Closing range: 78%, Body: 98% Good: Close above the weekly open, high closing range, A/D ratio Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Mostly green body, slightly longer lower wick Advanced/Decline: 2.51, five advancing stocks for every two declining stocks Indexes: SPX (+1.13%), DJI (+1.30%), RUT (+2.17%), VIX (-14.94%) Sectors: Financials (XLF +2.89%) and Energy (XLE +2.13%) at the top. Health (XLV +0.34%) and Utilities (XLU +0.12%) were bottom. Expectation: Higher Friday brought a confident end to a short but volatile week. After the bond yield slide caused a sell-off the previous day, yields recovered, and investors moved back into equities. In contrast to Thursday, all sectors closed with gains on Friday. The Nasdaq closed with a +0.98% advance, with gains broadly shared across the index. There were five advancing stocks for every declining stock. The only thing missing was the volume which was much lower than the previous day. Nonetheless, the high closing range of 95% and the green body that spans 78% of the candle are bullish. It also helps close the week with a positive weekly gain. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week This week's uncertainty around how fast the economy is recovering drove volatility in cyclical sectors while sending Treasury yields on a slide that exasperated investors' worries. Still, the major indexes narrowly secured gains for the week while the S&P 500 and Dow Jones Industrial Average (DJI) set new records. The week opened with investors taking defensive positions in Real Estate and Utilities, showing nervousness over new developments in the pandemic. Among recent surges in the number of cases identified as the Delta variant, Pfizer added worries that the vaccinated population might require a six-month booster shot to remain safe. In a demonstration of just how confused investors are about economic data, cyclical sectors sold off on Tuesday, were repurchased on Wednesday, sold off again on Thursday, and bought back on Friday. Despite gains on the first two days, the number of declining stocks outnumbered advancing stocks 3 to 1 most of the week. The increases in the indexes for the first three days were driven primarily by mega-caps. The most significant sign of change in investors thinking was in the sliding yields for Treasury notes. Yields have been dropping since economic data started to show the recovery is progressing slower than previously expected. Never mind that the economy is still expanding at a historically high rate and inflation continues to be a concern. Analysts needed to recalculate and rebalance for the new speed. The slide in yields came to a critical moment on Thursday when investors who were betting that yields would rise needed to cover those positions. Bond yields move in the opposite direction of prices. Investors were expecting yields to go up, and prices to go down and took short positions in those bonds. When the opposite happened, they needed to buy back the bonds to cover the short position. The result was even higher prices and lower yields. Once bond investors covered those positions, we saw a recovery of yields on Friday and a boost in equities as investors came back into the market. The story is not over yet. There were more advancing stocks than declining stocks on Friday, but volume in the market was meager. The Nasdaq advanced +0.43% this week. Volume was slightly higher than the previous week but lower than average for this year. The low is lower than the last week, and the high is higher, marking an outside week for the index. The closing range of 86% is healthy. The long lower wick represents the dip on Thursday that was bought on Friday. The S&P 500 (SPX) closed the week at another record, advancing +0.40% for the week. The Dow Jones Industrial Average (DJI) also had a record close with a +0.24% gain for the week. The picture was not quite as rosy for small caps, with the Russell 2000 (RUT) declining most of the week. The index gained on Friday, but not enough to end the week positively, falling -1.12% for the week. The VIX volatility advanced +7.23% for the week. It climbed almost 42% intra-week. The short week was defined mainly by Thursday's sell-off in equities as Treasury bond yields were sliding. That gave a boost to two defensive sectors, Real Estate ( XLRE ) and Utilities ( XLU ), but the two sectors were already leading from Monday. The worries ended on Friday, but the two sectors remained in the lead for the week. Technology ( XLK ) and Consumer Discretionary ( XLY ) were the next two sectors at the top of the list, showing a mix of risk-on and risk-off sentiment throughout the week. The cyclical sectors moved from the top of the sector list on Wednesday to the bottom of the list on Thursday, back to the top of the list on Friday. Energy ( XLE ) was a consistent loser throughout the week until finally finding itself at the top of the list on Friday. However, the gains were not enough to move it out of the bottom position for the week. Treasury yields on the 30y, 10y, and 2y all declined for the week. The gap between long-term yields and short-term yields continues to close while the yield curve shape is normalizing. High Yield Corporate Bond (HYG) prices declined slightly but remained near pre-pandemic highs. Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) declined -0.15% for the week. Silver (SILVER) declined -1.36%, and Gold (GOLD) advanced +1.15%. Crude Oil (CRUDEOIL1!) declined -0.77% after clearing its 2018 high last week and setting a new high on Monday. Timber (WOOD) advanced +2.44%. Copper (COPPER1!) advanced +1.33%. Aluminum (ALI1!) declined -2.48%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Microsoft (MSFT) and Alphabet (GOOGL) signaled indecision among investors with their weekly candles. Despite the uncertainty, Microsoft and Alphabet gained +0.10% and +0.21%, respectively. Apple (AAPL) and Amazon (AMZN) showed very bullish weeks. Amazon gained +5.93%, continuing momentum after the government ended an exclusive contract with Microsoft and opened up opportunities for other cloud vendors. Apple gained +3.68% for the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Given the worries over the economic recovery and new fears for the pandemic, it's no surprise to see the continued losses in the recovery stocks. Only Marriott (MAR) ended the week with gains, advancing +0.86%. Exxon Mobil (XOM) declined -3.07%. Delta Airlines (DAL) lost -2.79%. Carnival Cruise Lines (CCL) had the most significant decline, falling -6.91%. All four closed the week above their 40-week moving average. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). All four cryptocurrencies declined for the week as they consolidate in sideways trends. Volume is shrinking while bases develop. At the time of writing, Bitcoin (BTCUSD) declined -2.60%. Ethereum (ETHUSD) fell -7.55%. Litecoin (LTCUSD) dropped -7.28%. Bitcoin Cash (BCHUSD) declined -5.20%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) moved higher, ending the week at 0.735. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index moved further into the fear side mid-week but is on its way back toward neutral. The NAAIM Exposure Index shows money managers at 82.54 average exposure among active money managers. The survey occurs on Wednesdays, so the number does not include any of the selling on Thursday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead The week will start slow, but earnings reports will pick up as Financials kick off the earnings season. Monday The USDA will release the monthly agriculture supply and demand estimate report on Monday. Investors will also watch the 10y and 3y note auction closely in the afternoon. There are no relevant earnings reports for the daily update on Monday. Tuesday On Tuesday, investors will get a fresh look at the consumer price index data. It's likely to continue showing higher inflation in general. Compare the total CPI number to the Core CPI, which excludes Fuel and Food. Investors will also look closely at what subcomponents drive inflation and how transitory prices will be in those areas. Weekly API Crude Oil numbers will be available in the afternoon after the market closes. JP Morgan (JPM) and Goldman Sachs (GS) will kick-off earnings season with pre-market earnings reports. PepsiCo (PEP) will also release earnings in the morning. Another potentially interesting report to watch is Fastenal (FAST) wholesale distributor. Look for signs of more stress or relief in the supply chain. Wednesday The producer price index data released on Wednesday will compliment Tuesday's consumer numbers. The produce prices show a leading indicator of inflation before it passes along to consumers. Bank of America (BAC), Wells Fargo (WFC), Citigroup (C ), BlackRock (BLK) are among the big finance companies reporting earnings before the market opens. Delta Airlines (DAL) will also be a critical earnings release to watch and measure how airlines are recovering as the economy reopened further this past quarter. Thursday Two sets of data will be in focus on Thursday. First, the weekly Initial Jobless Claims will show how the labor market is progressing. Second, the Manufacturing and Industrial Production data in the morning will be closely watched as investors continue to measure the speed of the economic recovery. Taiwan Semiconductor (TSM) will release earnings on Thursday. The earnings release and commentary should show how stretched the semiconductor giant is to meet demand. The impact may be among auto manufacturers who've had to put plants on hold, waiting for chips from suppliers. Other large producers of electronics will also be impacted. In addition, UnitedHealth (UNH), Morgan Stanley (MS), U.S. Bancorp (USB), Progressive (PGR), and Cintas (CTAS) will be interesting reports to watch out for on Thursday. Friday The focus will be on Retail Sales data on Friday morning. Consumer Sentiment and Consumer Expectations data will be available after the market opens. Friday's earning reports include Honeywell (HON) and Charles Schwab (SCHW). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Sliding Treasury Yields tested investor confidence this past week. The markets largely passed the test as yields recovered and the indexes moved higher. There are some key things we can look to for a bullish outlook. First, the lowering treasury yields drive borrowing costs lower for companies. The result is that investors are further buying up both Investment Grade Corporate Bonds and High Yield "Junk" Bonds. Although yields on those bonds also drop as prices go up, the yields are higher than government bonds, and the purchases reflect confidence in US businesses to pay back debts. If inflation is really going to stick, funding growth via cheap debt now could be a smart move by companies. Use the purchasing power now before further inflation hits, and then as inflation continues, the debt obligation becomes cheaper over time. There are plenty of examples in history of wise business owners funding massive growth by acquiring debt in the face of inflation. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The indexes are extended as they continue to set new record closes. As uncertainty remains around how quickly the economy is expanding, investors will continue to rotate between sectors and cap segments. The volatility will send a portion of smart money to safer bets elsewhere. The pullback isn't necessarily a bad thing but will undoubtedly be painful for some. As supply chain pressure remains among higher demand from consumers, inflation will remain a concern. This week's CPI and PPI data may be a crushing blow to investor confidence. Higher than expected numbers will drive more volatility in both bond and equity markets. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq set another all-time high this week before pulling back on economic worries on Thursday. Still, the index remained above the 21d moving average and continues to track along with a regression trend mid-line from the 5/12 low. On the positive side, the levels are: The high of this past week was a new all-time high at 14,755.33. The mid-point of the regression trend from the 5/12 low points to 14,914 by the end of the week. The round number 15,000 is likely to be a new area of resistance. On the downside, there are a few key levels: The 10d MA is at 14,564.53. 14,500 is a support area developed from three days of sideways trading this week. The low of this past week is 14,371.59. The 21d EMA is at 14,363.62. 14,000 has been a key area of support/resistance. The 50d MA is at 13,926.79. There is a pivot at 13,548.93. This is a "higher low" in the current uptrend. There is a support area at 13,000. 13,002.54 is a pivot from May. 13,026.58 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The mixed sentiment among investors on the economic recovery is interesting. Yes, the economic recovery is slowing, yet it's still expanding at a higher than standard rate. The Fed's monetary policy seems to be supporting the growth while still allowing room to taper if the recovery drives unacceptable levels of inflation. That's driving yields lower, bringing borrowing costs down. Small and large companies can borrow at those reduced rates to drive further growth. If inflation continues, the costs to servicing the debt only become cheaper. That to me appears bullish, but maybe I'm a fool. Only history will be the final judge of who is wise and who is a fool. Follow price! Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
1
Market Week in Review - 6/28/2021 - 7/2/2021Summary: The market added another week of record closes across the major indexes while the Nasdaq continued a power trend which is in its twelfth day. Investors were not without worries this week. Their attention was on the pandemic at the beginning of the week. However, it turned to the employment data at the end of the week. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, June 28, 2021 Facts: +0.98%, Volume lower, Closing range: 95%, Body: 94% Good: Very bullish candle on sets a new all-time high Bad: Lower volume, low A/D ratio Highs/Lows: Higher high, higher low Candle: Mostly green body with no lower wick, small upper wick Advanced/Decline: 0.59, three declining stocks for every two advancing stocks Indexes: SPX (+0.23%), DJI (-0.44%), RUT (-0.52%), VIX (+0.90%) Sectors: Communications (XLC +1.13%) and Technology (XLK +1.05%) at top. Financials (XLF -0.73%) and Energy (XLE -2.28%) were bottom. Expectation: Sideways or Higher The S&P 500 and Nasdaq moved higher today, setting more records, while the Dow Jones Industrial Average and Russell 2000 took a step back. New fears of pandemic lockdowns in Asia sent Energy and Industrial stocks lower. The Nasdaq finished the day with a +0.98% gain, producing a bullish green candle that is primarily green body with no lower wick and a small upper wick. Volume was lower than Friday, but Friday's volume was exceptionally high. The closing range of 95% shows bullish support into the close. Other than a slight dip in the early afternoon, investors were in a buying mood all day. Still, there were three declining stocks for every two advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, June 29, 2021 Facts: +0.19%, Volume higher, Closing range: 88%, Body: 30% Good: Green candle on higher volume, great closing range Bad: The low A/D line Highs/Lows: Higher high, higher low Candle: Thin green body in the upper half of the candle, longer lower wick Advanced/Decline: 0.43, two declining stocks for every advancing stock Indexes: SPX (+0.03%), DJI (+0.03%), RUT (-0.58%), VIX (+1.78%) Sectors: Technology (XLK +0.73%) and Consumer Discretionary (XLY +0.25%) at the top. Communications (XLC -0.54%) and Utilities (XLU -1.62%) at the bottom. Expectation: Sideways or Lower Consumer confidence numbers helped send Apple and Microsoft higher and drive gains in the Nasdaq. The gains were not spread broadly across the index, with more declining stocks than advancing stocks. The Nasdaq finished with a +0.19% gain after dipping in the morning. The dip created a longer lower wick, under a 30% green body that ended the day with a 88% closing range. The higher volume did not translate into broad gains. There were more than two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, June 30, 2021 Facts: -0.17%, Volume higher, Closing range: 53%, Body: 12% Good: Higher low Bad: Lower high, thin red body, higher volume on decline Highs/Lows: Lower high, higher low Candle: Indecisive candle with a thin red body in between two equal wicks Advanced/Decline: 0.58, more declining stocks than advancing stocks Indexes: SPX (+0.13%), DJI (+0.61%), RUT (+0.07%), VIX (-1.19%) Sectors: Energy (XLE +1.24%) and Consumer Staples (XLP +0.78%) at the top. Utilities (XLU -0.19%) and Real Estate (XLRE -0.78%) at the bottom. Expectation: Sideways Solid economic recovery data sent the cyclical sectors higher today while other sectors saw modest gains. Data included positive Nonfarm Employment change, Pending Home Sales, and Crude Oil Inventories. After an indecisive candle yesterday, the S&P 500 set a new record to close the quarter. The Nasdaq finished with a -0.17% decline on higher volume. The closing range of 53% is right at the middle of the candle, with a thin 12% red body in the middle of equal length wicks. The "spinning top" candle signals indecision in the market, where both buyers and sellers are active during the trading session. There were more declining stocks than advancing stocks on the Nasdaq. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, July 1, 2021 Facts: +0.13%, Volume lower, Closing range: 88%, Body: 30% Good: High closing range after morning dip, higher high Bad: Dip below 14,500 creating lower low Highs/Lows: Higher high, lower low Candle: Bullish outside day follows an inside day, signals continuation Advanced/Decline: 0.80, more declining stocks than advancing stocks Indexes: SPX (+0.52%), DJI (+0.38%), RUT (+0.81%), VIX (-2.34%) Sectors: Energy (XLE +1.74%) and Utilities (XLU +1.09%) at the top. Technology (XLK +0.17%) and Consumer Staples (XLP -0.30%) were at the bottom. Expectation: Sideways While major indexes advanced for the day, there was some caution in the market as investors await the jobs data coming on Friday. The Nasdaq closed the day with a +0.13% gain after dipping in the morning. The morning dip created a long lower wick for the candle and a lower low for the day compared to the previous day. However, the index recovered and also created a new high. The body is 30% longer than the previous day, creating a bullish outside day. That is typically a continuation pattern in an uptrend but will need to be confirmed tomorrow after the jobs data. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, July 2, 2021 Facts: +0.81%, Volume lower, Closing range: 92% (w/gap), Body: 60% Good: High closing range, large green body, higher high, higher low Bad: Lower volume, low A/D ratio Highs/Lows: Higher high, higher low Candle: Gap up with higher high and higher low Advanced/Decline: 0.39, five declining stocks for every two advancing stocks Indexes: SPX (+0.75%), DJI (+0.44%), RUT (-1.01%), VIX (-2.52%) Sectors: Technology (XLK +1.32) and Health (XLV +0.96) at the top. Financials (XLF -0.11%) and Energy (XLE -0.22%) were at the bottom. Expectation: Sideways or Higher The market gave a big yes to the jobs data but focused investors on mega-caps and leaving small-caps behind. Volume was low, and trading was concentrated into big tech, sending the Technology sector higher. Three of the major indexes had record closes. The Nasdaq closed at another all-time high with a +0.81% advance. The day was dominated by buyers, producing a 60% green body and 92% closing range with the gap at open. However, volume was lower than the previous day, and there were five declining stocks for every two advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week The market added another week of record closes across the major indexes while the Nasdaq continued a power trend which is in its twelfth day. Investors were not without worries this week. Their attention was on the pandemic at the beginning of the week. However, it turned to the employment data at the end of the week. Monday opened the week with some fear from a resurgence in covid cases in Asia. The Utilities competed with Technology as the top sector in the morning. The contrast between growth and defensive moves showed a mixed attitude toward the rise in cases. Energy sunk as some countries reinstated travel bans. The Utilities sector quickly faded as fears melted away. On Monday afternoon, a judge threw out an antitrust case brought by regulators against Facebook. That not only sent Facebook and the Communications sector higher, but it was a boon for big tech companies also facing similar scrutiny. The win for big tech helped send the growth sectors higher throughout the week. Consumer Confidence numbers on Tuesday were another positive for growth stocks. Consumer Confidence is at a post-pandemic high as US citizens see improving conditions heading into the summer months. The numbers surprised wall street and helped further put pandemic worries behind for the week. The gains on the first two days of the week came with a diverging advance/decline line. The advance/decline line is the ratio of advancing stocks to declining stocks. If the index is moving higher, we will ideally see the ratio near or above 1.0, meaning more advancing stocks than declining stocks. The divergence on Monday and Tuesday, specifically the A/D ratio moving lower, signaled a potential pullback. That happened on Wednesday and continued into Thursday morning. After dipping below 14,500 on Thursday morning, it seemed the market turned toward employment data. Initial Jobless Claims on Thursday looked better than expected. Anticipation of positive news on Friday was enough to bring the Nasdaq back above the 14,500 support area. Still, some investors took defensive positions, sending the Utilities sector higher. There are some key things to note in the employment data released on Friday that sent all the Dow, S&P 500, and Nasdaq to record closes. First, the Private Nonfarm Payrolls were much higher than expected, meaning businesses are adding jobs faster than previously expected. Second, Average Hourly Earnings was lower than expected. Between the two, we can say that people are starting to go back to work, requiring more minor wage increases to attract people back into the workforce. Higher wages are a critical factor in making inflation permanent instead of transitory. Seeing that businesses are getting people back to work with less pressure on wages is good news for investors worried about inflation and a possible earlier-than-planned Fed reaction. Not only can you see the investor reaction in the stock indexes, but you can also see it in the lowering yields on longer-term Treasuries. The Nasdaq advanced +1.94% this week, setting another record high. Volume was much lower than the previous week and lower than average for this year. The low this week is higher than the high of the previous week. The closing range of 96% is excellent. The Russell 2000 (RUT) lost +1.23% this week after outperforming the other indexes in the previous week. The S&P 500 (SPX) gained +1.67%. The Dow Jones Industrial Average (DJI) advanced +1.02%. The VIX volatility declined -3.50% for the week and closed the week at a post-pandemic low. Technology ( XLK ) led the sector list this week, propelled higher by strong economic data and significant gains by big tech. Communications ( XLC ) led briefly on Monday after a judge threw out two cases brought against Facebook. The decision was a blow to regulators and a boon to several tech mega-caps facing similar challenges. Utilities ( XLU ) also led at the beginning of the week but quickly retreated and ended the week at a loss. Energy ( XLE ) had a volatile start to the week due to increased pandemic fears. The continued demand for Oil, driving prices higher, eventually brought investors back to the sector. However, it wasn't enough to lift the sector out of the bottom position in the sector list. The three secular growth sectors outperformed the broader S&P 500 index this week, while cyclical sectors underperformed. Treasury yields on the 30y, 10y, and 2y all declined for the day. However, the gap between longer-term yields (7y and longer) and shorter-term yields (2y and 3y) continues to tighten. The signal could be that investors see inflationary pressures as short-term. The market agrees with the Fed that inflation is transitory. The High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced, showing confidence in US businesses. The US Dollar (DXY) advanced +0.47% for the week. Silver (SILVER) advanced +1.46%, and Gold (GOLD) advanced +0.39%. Crude Oil (CRUDEOIL1!) advanced +1.71% and surpassed its 2018 peak. Timber (WOOD) advanced +1.37%. Copper (COPPER1!) advanced +0.07%. Aluminum (ALI1!) advanced +3.34%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps The largest four mega-caps all advanced this week. Apple (AAPL) soared +5.15% higher. Microsoft (MSFT) set another record high with a +4.77% gain. Amazon (AMZN) climbed by +3.22%. Alphabet (GOOGL) gained +2.24%. All four are trading well above their 10-week moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Pandemic fears sent the four recovery stocks lower this week. Marriott (MAR) was able to recover and close the week with a +0.80%. Delta (DAL) tested the 40-week moving average line before recovering some losses and ending the week with a -0.63% decline. Exxon Mobile (XOM) lost -2.30% this week. Carnival Cruise Lines (CCL) had the most significant loss among the four, dropping -7.36% for the week. The company launched its first cruise since the pandemic began on Saturday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). Ethereum (ETHUSD) had the best week with a +17.05% gain. It is the only of the four trading above the 40-week moving average. Bitcoin Cash (BCHUSD) closed right at the 40-week line with a +10.30% advance this week. Litecoin (LTCUSD) gained +9.25%. Bitcoin (BTCUSD) continues to underperform with a +1.66% advance this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) moved higher, ending the week at 0.617. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index is on the fear side but moving toward neutral. The NAAIM money manager exposure index rose to 91.72 this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead There are no relevant earnings reports for the daily update next week. A quiet period before the Financial sector kicks off earnings season the following week. Monday Markets are closed on Monday for the July 4th holiday. Tuesday Tuesday will open the trading week with Purchasing Managers Index data for Services and Non-Manufacturing Employment. There are no relevant earnings reports for the daily update on Tuesday. Wednesday The JOLTs Job Openings report for May will be available on Wednesday morning. In the afternoon, the FOMC will release the meeting minutes from last month. Investors will be interested to see what concerns remain around inflation and employment. The API Weekly Crude Oil stock comes after the market close. There are no relevant earnings reports for the daily update on Wednesday. Thursday Initial Jobless Claims and weekly Crude Oil Inventories data will be available on Thursday. There are no relevant earnings reports for the daily update on Thursday. Friday The Fed will release its semi-annual Monetary Policy Report on Friday. There are no relevant earnings reports for the daily update on Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The same bullish signals from last week continue into this week. Economic data throughout the week only strengthened the bullish outlook and helped the Nasdaq continue its power trend. The S&P 500 is also nearing the criteria for a power trend. One of the most significant indications that investors are no longer worried about inflation is in the performance of both Corporate and Treasury bonds. Corporate interest rates remain low as investors are confident in the near-term performance of US businesses. Yields on mid-term Treasuries are rising relative to longer-term Treasuries, while overall yields remain low. Bond investors see inflation as only a short-term problem. The coming week has few influential earnings reports and only a couple of important items on the economic calendar. While investors anticipate a strong earnings season overall, this week will be an excellent time to get positioned for growth. Clearly from the Growth/Value chart, investors are moving back into Growth. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side It's another light week on economic news and earnings, providing very little to be bearish about in the data. Still, after a few weeks of gains into record closes, it would not be a surprise if the market pulls back a bit or pauses. This past week ended with a lopsided rotation into the largest tech mega-caps that drove indexes higher. Expect some rotation the other way gains spread out across the market before the indexes head much higher. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq found support at 14,500 this week, closing at new all-time highs. On the positive side, the levels are: The high of this past week was a new all-time high at 14,649.11. The mid-point of the regression trend from the 5/12 low points to 14,724 by the end of the week. On the downside, there are a few key levels: 14,500 is a support area developed from three days of sideways trading this week. The 10d MA is at 14,409.11. The low of this past week is 14,417.20. The 21d EMA is at 14,231.69. 14,000 has been a key area of support/resistance. The 50d MA is at 13,880.92. There is a pivot at 13,548.93. This is a "higher low" in the current uptrend. There is a support area at 13,000. 13,002.54 is a pivot from May. Below this level is a correction. 12950.85 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up This week confirmed a bullish thesis for growth stocks and the Nasdaq. While valuations remain high, there still seems to be quite a lot of support for US bonds and equities. That's likely coming from a more robust recovery among US businesses than in other countries globally, especially those countries still struggling to reopen after a rise in Delta variant cases. With the indexes all at record highs, investors will be watching for any signals that the rally is ending. Those aren't likely to come from scheduled events like earnings reports or the economic calendar. Instead, they may come from a surprise turn in the pandemic or another unexpected event. In the meantime, follow price. Trade safe, but don't miss out on the gains. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
1
Market Week in Review - 6/21/2021 - 6/25/2021Summary: It was a great week across all major indexes. The week opened with a gain on Monday that erased losses from the prior Friday. Once investors had a chance to absorb the new Fed hawkish stance and get past a quadruple witching day, they were ready to push back into growth stocks and see the markets another step upward. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, June 21, 2021 Facts: +0.79%, Volume higher, Closing range: 95%, Body: 49% Good: Higher high, long lower wick from bullish rebound off morning low Bad: Lower low, otherwise not much Highs/Lows: Higher high, lower low Candle: Half green body with long lower wick, small upper wick Advanced/Decline: 1.03, One advancing stock for each declining stock Indexes: SPX (+1.40%), DJI (+1.76%), RUT (+2.16%), VIX (-13.66%) Sectors: Energy (XLE +3.21%) and Financials (XLF +1.93%) were top. Utilities (XLU +0.51%) and Consumer Staples (XLP +0.49%) were bottom. Expectation: Sideways or Higher Investors moved back into equities on Monday, helping markets rebound from Friday's sell-off. All major indexes and sectors moved higher while stocks ended the day balanced across gains and losses. The Nasdaq closed with a +0.79% gain. The volume was lower than Friday's unusually high volume. The 49% body is in the upper half of the candle, above a long lower wick formed just after the market open. The index dropped after open, but found support around 14,000 and moved higher the rest of the day. There were about the same number of advancing stocks as declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, June 22, 2021 Facts: +0.79%, Volume lower, Closing range: 89%, Body: 77% Good: New all-time high, thick green body, small wicks Bad: A/D ratio, lower volume Highs/Lows: Higher high, higher low Candle: Mostly green body with short upper and lower wicks Advanced/Decline: 0.74, More declining stocks than advancing stocks Indexes: SPX (+0.51%), DJI (+0.20%), RUT (+0.43%), VIX (-6.77%) Sectors: Consumer Discretionary (XLY +0.94%) and Technology (XLK +0.91%) were top. Real Estate (XLRE -0.45%) and Utilities (XLU -0.61%) were bottom. Expectation: Higher It was a record-setting day for the Nasdaq, setting a new all-time high for the first time since April. The other major indexes also had good gains for the day, while the sector list mainly was positive. Investors responded to better than expected existing home sales data and no new surprises from Fed Jerome Powell's testimony to congress. The Nasdaq gained +0.79% for the day and finished the day with its highest close since April. The closing range of 89% and 77% green body represents a bullish session that only paused mid-day to await Powell's comments. Despite the bullish day, there were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, June 23, 2021 Facts: +0.13%, Volume lower, Closing range: 36%, Body: 12% Good: New high, A/D over 1.0 Bad: Low closing range, weak volume Highs/Lows: Higher high, higher low Candle: Thin green body in the lower half of candle Advanced/Decline: 1.04, About the same number of advancing and declining stocks. Indexes: SPX (-0.11%), DJI (-0.21%), RUT (+0.33%), VIX (-2.16%) Sectors: Consumer Discretionary (XLY +0.77%) and Energy (XLE +0.28%) were top. Materials (XLB -0.64%) and Utilities (XLU -1.06%) were bottom. Expectation: Sideways or Lower Mixed economic data seemed to bring mixed reactions in the market today. The result is a day of slim gains across the market while the indices pause after a couple of days of gains. The Nasdaq gained +0.13%. Volume was lower than the previous day. The thin 12% body is in the lower half of the candle, resulting in a 36% closing range. The longer upper wick was formed in a rally just after the market opened, but the index could not hold onto the gains. There were about the same number of advancing stocks as declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, June 24, 2021 Facts: +0.69%, Volume lower, Closing range: 54% (w/gap), Body: 15% Good: Low above yesterday's high creates bullish rising window, high A/D ratio Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Thin green body near middle of candle, gap up at open, longer upper wick Advanced/Decline: 1.79, Three gaining stocks for every two declining stocks Indexes: SPX (+0.58%), DJI (+0.95%), RUT (+1.31%), VIX (-2.15%) Sectors: Financials (XLF +1.25%) and Communications (XLC +0.94%) at top. Utilities (XLU -0.09%) and Real Estate (XLRE -0.47%) at bottom. Expectation: Sideways or Higher The S&P 500 and Nasdaq set new record closes today, and gains were broad across sectors and stocks. The Russell 2000 also had gains ahead of the $10 trillion-dollar rebalancing happening this weekend. The Nasdaq opened the day with a gap-up and ended with a +0.69% gain. Like yesterday, it could not hold an intraday high set mid-day, retreating near the opening price. The 15% green body is under a 54% closing range. The two-day rising window pattern is a bullish continuation pattern. Three stocks advanced for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, June 25, 2021 Facts: -0.06%, Volume higher, Closing range: 32%, Body: 57% Good: Sideways trading with the high/low range of previous day Bad: Lower high, drop on high volume, thick red body Highs/Lows: Lower high, higher low Candle: Inside day, mostly red body with small upper and lower wicks, lower wick is slightly longer Advanced/Decline: 0.91, more declining stocks than advancing stocks Indexes: SPX (+0.33%), DJI (+0.69%), RUT (+0.03%), VIX (-2.19%) Sectors: Financials (XLF +1.21%) and Utilities (XLU +1.07%) at top. Materials (XLB +0.01%) and Technology (XLK -0.12%) were bottom. Expectation: Sideways or Lower The S&P 500 closed at another record on Friday while the Nasdaq couldn't make new gains. Economic data is sending mixed signals on the progress of the recovery. For example, while higher than the previous month, consumer data was not as high as analysts expected. The Nasdaq traded inside the previous day's high and low range and closed lower by the end of the day. The 57y% red body is in the upper part of the candle. The index formed the longer lower wick in morning volatility that set the intraday high and intraday low within the first hour of the trading session. The closing range of 32% is low. The big spike in volume was due to the Russell 3000 rebalancing activity. As a result, there were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week It was a great week across all major indexes. The week opened with a gain on Monday that erased losses from the prior Friday. Once investors had a chance to absorb the new Fed hawkish stance and get past a quadruple witching day, they were ready to push back into growth stocks and see the markets another step upward. There were not many surprises throughout the week. Economic news was mixed at times, but nothing was so out of the ordinary to cause investors reactions. Testimony by Jerome Powell to Congress contained no significant changes in posture. His statements reinforced that they believed inflation to be transitory but would be willing to raise interest rates if inflation was higher than expected. A reconstitution of the Russell 3000 hit the Friday market, where stocks are moved on and off the list based on the current year's capitalization. The shift causes a rebalance across active and passive indexed funds based on the Russell indexes. That rebalance represented over ten trillion dollars of money moved around stocks on Friday. www.tradingview.com The Nasdaq advanced +2.35% this week, setting new record highs. Volume was higher than the previous week due to the rebalancing of indexed funds following the Russell 3000 reconstitution process. The index continued a trend of higher highs and higher lows. The closing range of 88% is excellent. Overall a strong week with a good gain on higher volume. The Russell 2000 (RUT) had the biggest gain of the major indexes, advancing +4.32% this week and erasing the big loss from the previous week. The Dow Jones Industrial Average (DJI) followed a similar pattern, regaining last week's losses and advancing +3.44% for this week. The S&P 500 (SPX) gained +2.74% and had a weekly record close. The VIX volatility declined -24.63% for the week. Energy ( XLE ) and Financials ( XLF ) topped the sector list this week. Energy continues to rise while crude oil prices hit record highs. Financials ( XLF ) is recovering along with yields on Treasury Bonds, which both were hit by the hawkish stance from the Fed last week. At the bottom of the sector list were the defensive sectors. Utilities ( XLU ) was the only sector to decline this week. The growth sectors mixed with the cyclical sectors in the middle of the list. Treasury yields on 30y and 10y rebounded a bit from last week's losses while the US 2y yield remained about the same. As a result, the spread between long-term and short-term yields widened. The High Yield Corporate Bond (HYG) prices advanced, Investment Grade Bond (LQD) prices declined. The US Dollar (DXY) declined -0.55% for the week. Silver (SILVER) advanced +1.16%, and Gold (GOLD) advanced +0.96%. Crude Oil (CRUDEOIL1!) advanced +3.81%. Timber (WOOD) advanced +2.66%, the first weekly advance in six weeks. Copper (COPPER1!) advanced +4.12%. Aluminum (ALI1!) advanced +4.18%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps The big four mega-caps continue to show strength, trading above the 10-week and 40-week moving averages. Apple (AAPL) tested the 10-week line but closed the week with a +2.03% gain. Microsoft (MSFT) gained +2.15%. Alphabet (GOOGL) advanced +2.00%. Amazon (AMZN) was the only loser of the four, falling -2.45% this week after two weeks of significant gains. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Exxon Mobile (XOM) gained a huge +7.05%, not only on higher oil prices but also the news that the company will reduce costs by laying off some of its workforce. Marriott (MAR) was the only other gainer, advancing +0.94% but remaining below its 10-week moving average. Delta Airlines (DAL) continues to get resistance at the 10-week line, declining -1.18% this week. Finally, Carnival Cruise Lines (CCL) closed below the 10-week line with a -0.18% loss this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The four cryptocurrencies continued to slide lower this week. Bitcoin (BTCUSD) declined -6.70%, closing below its 40-week moving average. Ethereum (ETHUSD) dropped -17.17% but remained above the 40-week line. Both Litecoin (LTCUSD) and Bitcoin Cash (BCHUSD) moved below the 40-week lines with -16.85% and -16.64% losses. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) moved lower, ending the week at 0.567. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index is on the fear side but moving toward neutral. The NAAIM money manager exposure index dropped to 70.86 this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday The Fed member John Williams will speak on Monday morning as the market is opening. The new Russell 3000 list became official after the market close on Friday, and more impact to equities moving on and off the list could occur Monday morning. There are no relevant earnings reports for the daily update on Monday. Tuesday Consumer Confidence numbers for June will be released on Tuesday, after the market open. There are no relevant earnings reports for the daily update on Tuesday. Wednesday Wednesday brings an update on Nonfarm Employment before the market opens. In addition, pending Home Sales and Crude Oil Inventories are available after the market open. Meme stock, Bed Bath & Beyond (BBBY), will release earnings on Wednesday. Thursday Thursday's economic data includes Initial Jobless Claims and Manufacturing Purchasing Managers Index. Walgreens Boots (WBA) releases earnings on Thursday. Friday More economic data becomes available on Friday. Average Hourly Earnings, Nonfarm Payrolls, and the Unemployment Rate will provide insights into the labor market recovery. Trade Balance data will also be released. There are no relevant earnings reports for the daily update on Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The Nasdaq continues in a Power Trend while the other major indices are making advances. Power Trends are times to be very bullish on stocks. Investor's Business Daily has information on how to spot Power Trends. There doesn't seem to be any considerable catalyst coming this week unless there are surprises in economic data. The lack of a catalyst should keep investor sentiment in the positive and help further advance the market. The US Dollar is holding up at its current level. Long-term Treasury yields are recovering a bit while short-term yields continue to remain high. The yield gap remains tighter than it was earlier in the year. It seems the four 2021 fears (Retail Investors, Bonds Volatility, Inflation, and Interest Rates) are all under control for the moment. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side After a big week of gains into record closes, it would not be a huge surprise to have the market pullback or pause here. However, a few surprises in the economic calendar would turn the markets more bearish. First, anytime the Fed speaks, the market will be watching closely. Fed John Williams will be making remarks at the BIS Andrew Crockett Memorial Lecture on Monday morning. Investors will also be watching Employment data throughout the week. The data starts on Wednesday with the ADP Nonfarm Employment Data, continues on Thursday with Initial Jobless Claims, and ends with the Unemployment Rate and Payrolls data. The ideal situation is that the data comes in near expected, not too low or too high. Significant differences in either direction could bring volatility back to the US dollar and bonds and have a negative impact on equities. It's a light week on economic news and earnings. There's not much to be bearish about in the data. But many times, it is when you don't expect them that the bears come out of nowhere. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq found support at 14,000 last week and moved higher this week, closing at new all-time highs. On the positive side, the levels are: The high of this past week was a new all-time high at 14,414.46. The mid-point of the regression trend from the 5/12 low points to 14,556 by the end of the week. On the downside, there are a few key levels: The 10d MA is at 14,187.50. 14,000 has been a key area of support/resistance. The low of this past week is 13,960.04. The 21d EMA is at 14040.86. The 50d MA is at 13,782.40817.47. There is a pivot at 13,548.93. This is a "higher low" in the current uptrend. There is a support area at 13,000. 13,002.54 is a pivot from May. Below this level is a correction. 12862.73 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up If you read last week's review, we learned some important things about investor sentiment in the current market. Out-of-control inflation is the greater evil than higher interest rates. Once investors absorbed the Fed's comments, they showed confidence that the Fed recognizes inflation and is willing to control it with higher interest rates. Yet, the Fed is not rushing to raise those rates unless inflation fears become a reality, comforting the long-term investor. That allowed the market to move a leg up this week. From last week's pivot, nothing changed, and there is not much coming next week that would cause a sentiment change, so I expect sideways or higher for the coming week. Let's watch and see what happens. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 6/14/2021 - 6/18/2021Summary: The markets were volatile this week, with a clear character shift after the Fed statements on Wednesday. The meeting and comments from the Fed this week shifted the outlook from analysts and investors in surprising ways. In addition, the quadruple witching day on Friday added extra volatility that helped amplify what we might expect in the coming weeks. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 "View on the Week." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, June 14, 2021 Facts: +0.74%, Volume higher, Closing range: 99%, Body: 76% Good: High closing range, higher volume, large green body Bad: Advance/decline ratio below 1.0 Highs/Lows: Higher high, lower low Candle: Short lower wick filled opening gap, thick green body, no upper wick Advanced/Decline: 0.86, More declining stocks than advancing stocks Indexes: SPX (+0.18%), DJI (-0.25%), RUT (-0.41%), VIX (+4.73%) Sectors: Technology (XLK +1.01%) and, Communications (XLC +0.66%) were top. Financials (XLF -1.04%) and Materials (XLB -1.23%) were bottom. Expectation: Sideways The Nasdaq continued its march higher while the other major indices paused or pulled back. The gains focused on mid and large-cap growth stocks. The index closed with a +0.75% gain on higher volume than Friday. The closing range reached 99% in the last 30 minutes of trading, while the 76% green body represents a steady climb throughout the day. The higher high marks the seventh session in a row to reach a higher high. The close is only 0.25% below a new all-time high. However, there were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, June 15, 2021 Facts: -0.71%, Volume higher, Closing range: 17%, Body: 79% Good: Held above 14,000 support area Bad: Selling most of the day. Lower high and lower low. Highs/Lows: Lower high, lower low Candle: Thick red body with small upper and lower wicks. Advanced/Decline: 0.42, Two declining stocks for every advancing stock Indexes: SPX (-0.20%), DJI (-0.27%), RUT (-0.26%), VIX (+3.72%) Sectors: Energy (XLE +1.90%) and Industrials (XLI +0.43%) were top. Technology (XLK -0.61%) and Real Estate (XLRE -0.92%) were bottom. Expectation: Sideways or Lower After higher than expected producer price index data this morning, investors prepared themselves for the Fed comments scheduled on Wednesday. Major indices fell on the fear that Fed officials will start to push for earlier interest rate hikes and tapering of asset purchase programs. The Nasdaq closed with a -0.71% loss for the day, on higher volume. The candle is mostly a red body and represents selling throughout the day as the bears stepped in. The closing range of 17% is above a small lower wick formed from a small rally into close. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, June 16, 2021 Facts: -0.24%, Volume higher, Closing range: 60%, Body: 20% Good: Bounce off low in the afternoon to close back above 14,000 Bad: Big dip after fed news Highs/Lows: Lower high, lower low Candle: Slim red body in the upper half of a long candle. Long lower wick. Advanced/Decline: 0.56, Almost two declining stocks for every advancing stock Indexes: SPX (-0.54%), DJI (-0.77%), RUT (-0.23%), VIX (+6.64%) Sectors: Consumer Discretionary (XLY +0.05%) and Financials (XLF -0.11%) were top. Consumer Staples (XLP -1.33%) and Utilities (XLU -1.50%) were bottom. Expectation: Sideways or Lower The Fed has spoken. The market lit up after the Fed pulled forward projected dates for interest rate hikes into 2023. The US Dollar spiked about 1%, long-term Treasury yields rose, and equities dropped. Equities found support after the initial reaction but couldn't quite recover all the losses. The Nasdaq closed the day with a -0.24% decline. That was better than the -1.20% intraday dip. Volume was higher than the previous day. The candle has a long lower wick underneath a 20% body in the upper half of the candle. The closing range of 60% provides some positive ending to a day that ended in a loss. There were almost two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, June 17, 2021 Facts: +0.87%, Volume lower, Closing range: 82%, Body: 82% Good: High closing range after a dip mid-day. No lower wick. Bad: Resistance at 14,200, lower volume, A/D below 1.0 Highs/Lows: Higher high, higher low Candle: Mostly green body with no lower wick, high closing range under small upper wick Advanced/Decline: 0.57, Almost two declining stocks for every advancing stock Indexes: SPX (-0.04%), DJI (-0.62%), RUT (-1.18%), VIX (-2.21%) Sectors: Technology (XLK +1.16%) and Health (XLV +0.76%) were top. Financials (XLF -2.90%) and Energy (XLE -3.40%) were bottom. Expectation: Higher Technology stocks moved higher today, helping boost the Nasdaq while the other major indexes retreated. The mix of investments in growth sectors and defensive sectors show some indecision about the new Fed policy. At the same time, there was an apparent sell-off in cyclical sectors. The Nasdaq advanced +0.87% while volume was lower than the previous day. The gains were steady through the morning before a dip mid-day. However, the index recovered and closed near intraday highs. The closing range of 82% matches an 82% body that left no lower wick. There were almost two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, June 18, 2021 Facts: -0.92%, Volume higher, Closing range: 18%, Body: 55% Good: Held above yesterday's low, and above 14,000. Bad: Huge volume on move lower, low A/D Highs/Lows: Lower high, higher low Candle: Inside day with a thick red body, longer upper wick, low closing range Advanced/Decline: 0.3, More than three declining stocks for every advancing stock Indexes: SPX (-1.31%), DJI (-1.58%), RUT (-2.17%), VIX (+16.74%) Sectors: Consumer Discretionary (XLY -0.53%) and Technology (XLK -0.91%) were top. Utilities (XLU -2.60%) and Energy (XLE -2.96%) were bottom. Expectation: Sideways The quadruple witching day amplified some rotations that happened yesterday and brought all the major indices lower. Value stocks sold off far more than growth stocks, while the US Dollar continued to strengthen. The Nasdaq closed the day with a -0.92% loss. Volume was much higher than the previous day due to the quadruple witching day when index futures, index options, individual stock futures, and stock options all expire on the same day. The closing range of 18% is below a red body with a visible lower wick and longer upper wick. The high is lower than the previous day, while the low is higher than the previous day, marking an inside day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week The markets were volatile this week, with a clear character shift after the Fed statements on Wednesday. The meeting and comments from the Fed this week shifted the outlook from analysts and investors in surprising ways. In addition, the quadruple witching day on Friday added extra volatility that helped amplify what we might expect in the coming weeks. The first thing to note this week is that the Nasdaq outperformed the other indexes. The tech-heavy index outperformed in previous weeks, but this week is a down week in the market, which can be more telling. Moreover, the Nasdaq fell less than the other major indexes, which is notable after the Fed's new hawkish policy. This daily and weekly update is all about learning, and I realized something this week that I wasn't seeing. Heading into Wednesday, I thought investors were worried about the Fed raising interest rates in response to inflation. The reaction to high Producer Price Index data was a pullback in the Nasdaq as it indicated continued inflation. After Wednesday, I realize investors were more worried that the Fed would not raise rates and let inflation run. It makes sense. Inflation usually is good for value stocks and bad for growth stocks. Higher interest rates are also bad for growth stocks, but multiple years of high inflation is the greater enemy. The Fed's dot plots showed that more members see interest rate hikes coming earlier to keep inflation at the 2% target. Although Jerome Powell still states that inflation is transitory, the increased dot plots show that there will be limits to how much they let it run. The reaction is best seen in the US dollar. It increased in strength by 2% this week, with the gains all coming after the Fed comments. Again, that makes sense. The Fed's willingness to control inflation makes the US dollar a safer bet for global investors. You can see the subsequent impact in US Treasuries, with a significant tightening of the spread between long-term and short-term yields. Finally, we can see the reaction in the rotation that was most apparent on Friday's quadruple witching day, which amplified the moves in higher volume. When the equity markets sold off on high volume, growth stocks and tech stocks held up relative to value and cyclical stocks. Some growth stocks even had significant gains. So should we be worried about the Dow Jones Industrial Average gap-down on Friday and the worst week since October 2020? Maybe. But it also makes sense given the other indicators we see. The strengthening US Dollar can impact valuations on the large stable multinational companies in the Dow Jones, just as it can impact the value of silver and gold. But looking closely at the 30 companies in the index, you can almost line them up from value to growth and see that the farther along the spectrum they are to value, the more significant the losses today. The Nasdaq closed with a -0.92% decline for the week. Volume was higher, primarily because of the quadruple witching day on Friday that saw volume 30% higher than usual. The index continued an uptrend on the weekly chart with a higher high and higher low than the previous week. The closing range of 43% is not great, but not terrible either. The S&P 500 (SPX) dropped -1.91% for the week. The Russell 2000 (RUT) was down -4.20%. But it was the Dow Jones Industrial Average (DJI) that made headlines with a -3.45% loss, the worst since October. The VIX volatility gained +32.35% for the week. It was a volatile week in the indexes and the sector list as investors rotated on the Fed's new hawkish stance toward inflation. Energy ( XLE ) led early in the week, but Technology ( XLK ) topped the list by the end of the week, ending the week as the only sector to hold onto gains. In second place was Consumer Discretionary ( XLY ). Growth stocks remained strong compared to Value stocks even in the sell-off that occurred on quadruple witching Friday. The cyclical sectors were at the bottom of the weekly sector list, with Materials ( XLB ) having the worse performance among a drop in commodity prices. The US Treasuries were impacted by the Fed decision, along with the US Dollar. Treasury yields on the 30y and 10y dropped as investors moved back to US dollar and US bonds. However, the 2y yields rose this week as they became less attractive to the longer-term bonds. The High Yield Corporate Bond (HYG) prices declined, Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) advanced +2.0% for the week. Silver (SILVER) declined -7.57%, and Gold (GOLD) declined -6.04%. Crude Oil (CRUDEOIL1!) advanced +1.90%. Timber (WOOD) continues its decline, losing -4.65% this week. Copper (COPPER1!) declined -7.42%. Aluminum (ALI1!) declined -3.50%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps The big four mega-caps looked promising last week, and they look even better this week. Apple (AAPL) joined the other three by breaking out above its 10-week moving average line on higher volume. Amazon (AMZN) continued its breakout last week as it heads into the annual Prime Day event next week. Microsoft (MSFT) retested the 10-week moving average line but ended the week with gains. Alphabet (GOOGL) was the only one of the four with a loss but held well above the 10-week moving average. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Unfortunately, things do not look as well for the four recovery stocks. Exxon Mobil (XOM) lost -2.85%. Carnival Cruise Lines (CCL) dropped -5.85%. Both Exxon and Carnival are still above their 10-week moving average. Delta Airlines (DAL) declined -3.31%, and Marriott (MAR) lost -3.24%, remaining below their 10-week moving averages. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The four cryptocurrencies continue struggling to find lasting gains. Bitcoin (BTCUSD) declined -9.95% this week. Ethereum (ETHUSD) fell -12.64%. Litecoin (LTCUSD) dropped -9.49%. Bitcoin Cash (BCHUSD) declined -9.17%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) moved higher, ending the week at 0.716. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index moved the fear side of the scale. The NAAIM money manager exposure index rose to 98.52. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday Short-term Treasury Bill auctions are on Monday. Fed John Williams speaks on Monday afternoon. There are no relevant earnings reports for the daily update on Monday. Tuesday Existing Home Sales for May gets released on Tuesday, after the market open. In the afternoon, Jerome Powell testifies before congress. API Weekly Crude Oil Stock is updated after the market close. There are no relevant earnings reports for the daily update on Tuesday. Wednesday Manufacturing and Services purchasing manager index data, released on Wednesday, gives a view on demand for products in services in their sectors. In addition, new Home Sales data will be available after the market open. Crude Oil Inventories data also comes on Wednesday, after the market opens. There are no relevant earnings reports for the daily update on Wednesday. Thursday For Thursday, data will be available for Durable Goods Orders. GDP data for Q1 should not change much over previously released numbers. We will also get the Initial Jobless Claims data before the markets open. Finally, there are Fed Bank Stress Test results to be made available after the market closes. Earnings reports on Thursday will include Nike (NKE), Accenture (ACN), FedEx (FDX), Blackberry (BB), and Bed Bath & Beyond (BBBY). The last two have been popular meme stocks. Friday More consumer pricing data released on Friday morning will give another boost to inflation worries but may be tempered by the fact that the Fed is now willing to control inflation. Consumer Expectations and Consumer Sentiment are also important data to be available after the market opens. CarMax (KMX) earnings on Friday may be interesting given the rise in used car prices. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side There seems to be an apparent rotation back into growth stocks, which signals bullishness even as some of the contrarian indicators moving to fear. For CANSLIM investors, the Nasdaq moved into a Power Trend this week. The low of the index held above the 21d EMA for over ten days. The 21d EMA is above the 50d MA for over seven days, and the 50d MA is in an uptrend. The positive day on Thursday signals the power trend. There's no telling how long it would last or if it’s a false signal, but right now, the Nasdaq still looks bullish. It seems investors are balancing fears of inflation with the fact that the Fed recognizes it could be less than transitory and is willing to change policy to control inflation if it continues. Those changes are still far into the future enough to give growth stocks some room to move up. Goldman Sachs declared this past week that Value is winning now but that by the end of the year, Growth stocks would outperform. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side It may look great on the Nasdaq, but the Dow Jones Industrial Average just had its worst week since last October. As much as I can write it off about the rotation from value to growth, it still looks like a concerning chart. If the Dow Jones continues to move lower, it will impact the other major indices and the rest of the market. Although the Fed is overall hawkish on inflation now, Employment data was worse than expected this week. That could put the Fed in a situation where it has to balance inflation worries against concerns of a faltered employment recovery. Likely it will work itself out, but a shaky recovery amidst short-term inflation worries could cause more volatility. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq dipped below but closed above the 14,000 area. It nearly reached a new all-time high but met resistance. It did set a record close on this past Monday. On the positive side, the levels are: The high of this past week was 14,196.21. The all-time high is at 14,211.57. The mid-point of the regression trend from the 5/12 low points to 14,390 by the end of the week. On the downside, there are a few key levels: 14,000 has been a key area of support/resistance. The 10d MA is at 14,028.65. The low of this past week is 13,903.73. The 21d EMA is at 13,888.95. The 50d MA is at 13,782.40. There is a pivot at 13,548.93. This is a "higher low" in the current uptrend. There is a support area at 13,000. 13,002.54 is a pivot from May. Below this level is a correction. 12,789.84 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was an interesting week to observe the indexes and indicators I use in the daily update and week in review. The Nasdaq looks bullish, but the Dow Jones Industrial seems bearish. There is a shift in sentiment toward the US Dollar that could be the best indicator to watch. It will impact how much money flows into other US dollar-based investments, including Bonds and Equities. It could also shift investors from Value back to Growth. Looking at another view of what's going on, we can again visit the growth vs. value chart. The market could quickly reverse the move, but for now, growth is getting investors' intention again. If Nasdaq's Power Trend plays out, we can expect more gains and new highs. If it's a false positive, then perhaps it's time to go to the sidelines and wait for better conditions. The stocks in your portfolio will be the ultimate decision-maker for you. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
6
Market Week in Review - 6/7/2021 - 6/11/2021Summary: It was a week of slow but sure advances, with every day reaching a higher high than the previous day. Only one day saw a decline in the closing price, and that was only -0.09%. Volume was high entering the week and then wained later in the week while the advance/decline line remained above 1.0 on average through the week. Crazy meme stocks aside, the week wasn't exhilarating, but it's a good week of building support for higher prices. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 Meaning of Life." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, June 7, 2021 Facts: +0.49%, Volume higher, Closing range: 93%, Body: 76% Good: Positive move on higher volume, good breadth. Bad: Nothing Highs/Lows: Higher high, higher low Candle: Small upper and lower wick surrounding a thick green body Advanced/Decline: 1.47, Three advancing stocks for every two declining stocks Indexes: SPX (-0.08%), DJI (-0.36%), RUT (+1.43%), VIX (+0.00%) Sectors: Real Estate (XLRE +0.94%) and Communications (XLC +0.52%) were top. Industrials (XLI -0.69%) and Materials (XLB -1.22%) were bottom. Expectation: Sideways or Higher Growth investors seemed cautious in the first half of the session but turned bullish by the close. The caution showed up in the leading sectors after the market opened. As the morning ended, the action began rotating back toward growth. The Nasdaq gained +0.49%, on higher volume. A short lower and upper wick surrounding a 76% green body represents the steady climb throughout the day. The closing range of 93% came after the index made a late afternoon intraday high, dipped, and quickly recovered. There were three advancing stocks for every two declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, June 8, 2021 Facts: +0.31%, Volume higher, Closing range: 62%, Body: 14% Good: Positive move on higher volume, higher high, higher low Bad: Red body, indecisive candle, expected resistance at 14,000 Highs/Lows: Higher high, higher low Candle: Thin red body in upper half of candle, longer lower wick Advanced/Decline: 1.16, More advancing stocks than declining stocks Indexes: SPX (+0.02%), DJI (-0.09%), RUT (+1.06%), VIX (+3.83%) Sectors: Energy (XLE +0.86%) and Consumer Discretionary (XLY +0.81%) were top. Consumer Staples (XLP -0.84%) and Utilities (XLU -0.85%) were bottom. Expectation: Sideways or Lower The growth trade is continuing to build steam as investors await more inflation data later this week. The cautious start yesterday morning abated, and investors slowly rotated back into some growth and cyclical sectors today. Meme stocks continued crazy moves. The Nasdaq closed with a +0.31% gain on higher volume. A long lower wick formed in the morning selling after a gap-up open that tested 14,000 resistance. Despite the morning selling, the index recovered to close just below where it opened, creating a thin 14% red body in the upper half of the candle. There were more advancing stocks than declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, June 9, 2021 Facts: -0.09%, Volume lower, Closing range: 5%, Body: 71% Good: Higher high, higher low, low above Monday's high Bad: Could not stay above 14,000 Highs/Lows: Higher high, higher low Candle: Mostly red body, no lower wick, short upper wick Advanced/Decline: 0.86, More declining stocks than advancing stocks Indexes: SPX (-0.18%), DJI (-0.44%), RUT (-0.71%), VIX (+4.92%) Sectors: Health (XLV +0.97%) and Utilities (XLU +0.89%) were top. Financials (XLF -0.94%) and Industrials (XLI -1.02%) were bottom. Expectation: Sideways or Lower The major indices bounced around today while investors await inflation data released by the Labor Department tomorrow. A dip in Treasury yields helped boost some large mega-caps and growth stocks, but stocks in the Nasdaq did not share the gains broadly. The Nasdaq closed with a -0.09% decline after briefly rising above 14,000 for the first time since early May. Volume was lower than the previous day. The candle is mostly red body with a closing range of 5%. The upper wick formed just after the open. The index approached 14,000 again in the early afternoon but reversed after the 10y note auction. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, June 10, 2021 Facts: +0.78%, Volume lower, Closing range: 91%, Body: 68% Good: High closing range, close above 14,000 Bad: Lower volume Highs/Lows: Higher high, lower low Candle: Outside day, mostly green body with a longer lower wick Advanced/Decline: 0.66, Three declining stocks for every two advancing stocks Indexes: SPX (+0.47%), DJI (+0.06%), RUT (-0.68%), VIX (-10.0%) Sectors: Health (XLV +1.71%) and Real Estate (XLRE +1.02%) were top. Materials (XLB -0.60%) and Financials (XLF -1.17%) were bottom. Expectation: Sideways or Higher Consumer price data was higher than expected, but not that high. After an initial premarket reaction, the major indices moved higher on the day while yields continued their drop and volatility moved out of the market. The Nasdaq advanced +0.78% on lower volume and closed above 14,000. The candle is mostly green body with a short lower wick and even shorter upper wick. The high closing range of 91% and body of 68% is bullish, but there were three declining stocks for every two advancing stocks and volume overall was lower. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, June 11, 2021 Facts: +0.35%, Volume lower, Closing range: 100%, Body: 61% Good: 100% closing range with good advance/decline ratio Bad: Lower volume Highs/Lows: Higher high, lower low Candle: Short lower wick under green body, no upper wick Advanced/Decline: 1.2, More advancing stocks than declining stocks Indexes: SPX (+0.19%), DJI (+0.04%), RUT (+1.06%), VIX (-2.79%) Sectors: Financials (XLF +0.64%) and Technology (XLK +0.60%) were top. Real Estate (XLRE -0.63%) and Health (XLV -0.71%) were bottom. Expectation: Higher The gains in equities were small but steady through this week. On Friday, the market rallied into close and headed into the weekend with a confidence boost. The Nasdaq closed with a +0.35%, capping a week of gains that saw every day reach higher than the previous day. Volume was lower and faded in the last three days. Today's candle ended with a 100% closing range, thanks to a rally in the final 30 minutes of the session. The small lower wick is under a 61% green body. There were more advancing stocks than declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week It was a week of slow but sure advances, with every day reaching a higher high than the previous day. Only one day saw a decline in the closing price, and that was only -0.09%. Volume was high entering the week and then wained later in the week while the advance/decline line remained above 1.0 on average through the week. Crazy meme stocks aside, the week wasn't exhilarating, but it's a good week of building support for higher prices. Compare these past three weeks to the weeks from March 25 to April 16. Those weeks led to a new all-time high, but the support was not there, and the index quickly retreated. It's interesting to go back to the weekly updates from that period and compare the underlying support in the market. The chart shows several gap-up opens as the index rallied, but the gains were driven mainly by a few big mega-caps, and the advance/decline ratio remained below 1.0 during the same period. Consumer demand was rising while a fire breaks out in a Japan chipmaker facility and a ship blocks the Suez canal, disrupting supply chains across industries. Biden released his infrastructure plans, sending commodity prices even higher. The coming inflation alarm should have been so easy to see, but investors were still moving money back into big tech and growth stocks. Finally, on Friday, 4/30, inflation data surprises investors sending the index lower and eventually back down to 13,000. It also didn't help that Janet Yellen hinted toward higher interest rates, and hackers attacked an oil pipeline on the east coast of the US. The past three weeks, including this week, we have seen gains in the index while investors face the reality of inflation and growing confidence in the Fed's promises not to change monetary policy. However, while they were building positions back into growth stocks, there is also an indication of caution. We aren't clear of all the worries yet. Everyone will be looking closely at comments in the Fed meeting minutes and statements made this coming week. But for now, it seems we have much more stable growth in prices and a path toward higher highs. The Nasdaq closed with a +1.85% gain for the week. Volume was lower than the previous week. The closing range of 100% is thanks to a rally in the last 30 minutes of trading on Friday. There is a barely visible lower wick, while the weekly candle is mostly green, representing the consistent gains through the week. The Russell 2000 (RUT) gained +2.16% for the week as it moves above a base, forming since March. The S&P 500 (SPX) closed the week at a record high, gaining +0.42% for the week. The Dow Jones Industrial Average (DJI) declined -0.80% this week. The VIX volatility moved -4.59% lower, closing the week at pre-pandemic levels. It was a mix of defensive sectors and growth stocks at the top of the sector list this week, while the cyclical sectors took a step back. Real Estate ( XLRE ) led the sector list, continuing to gain on a solid housing market, higher rents, as well as a defense against potential inflation. Health Care ( XLV ) also rallied this week, ending the week in second place on the sector list. Eli Lilly ( LLY ) helped boost the sector with news that the FDA may approve a new Alzheimer's therapy. The stock and the sector faded late in the week on the controversy over statements made by the company. Technology ( XLK ) and Consumer Discretionary ( XLY ) were third and fourth on the list, with steady increases throughout the week as investors became more confident in the growth trade. The cyclical stocks fell this past week. Financials ( XLF ) suffered from lower treasury yields, potentially impacting interest rates that drive revenue for the sector. Industrials ( XLI ) and Materials ( XLB ) declined as more of congress pushes back on Biden's infrastructure spending proposals. The US Treasury 30y, 10y, and 2y yields declined for another week, and the spread between long and short-term yields tightened significantly. The High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) advanced +0.42% for the week. Silver (SILVER) declined -0.35%, and Gold (GOLD) declined -0.70%. Crude Oil (CRUDEOIL1!) advanced +2.58%, continuing to move toward highs in 2018. Timber (WOOD) continues its decline, losing -2.04% this week. This is the fifth week of declines. Copper (COPPER1!) advanced +0.76%. Aluminum (ALI1!) advanced +0.42%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps The big four mega-caps look promising this week. Amazon (AMZN) and Microsoft (MSFT) moved above their 10-week moving average lines, with Amazon gaining +4.39% and Microsoft gaining +2.83%. Amazon's gain comes after several weeks of support at the 40-week moving average line. Microsoft's gain was after several weeks of resistance at the 10-week line. Apple (AAPL) gained +1.16% but still closed below the 10-week moving average. Alphabet (GOOGL) continues to show the most strength among the four with a +1.53% gain this week and remaining above the 10-week moving average since early in April. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Exxon Mobil (XOM) rose +1.17% this week while oil prices continuing to rise. Carnival Cruise Lines (CCL) declined -2.00%. Delta (DAL) and Marriott (MAR) gained +1.13% and +1.00% as both form a base just below the 10w moving average line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). Bitcoin (BTCUSD) has been riding support at the 40-week moving average line, gaining +8.98 this week. Ethereum (ETHUSD) declined +7.04%, meeting resistance at the 10-week moving average line. Litecoin (LTCUSD) declined -3.04% but also has support at the 40-week moving average. Bitcoin Cash (BTHUSD) declined -6.42%. Despite the declines from Ethereum and Bitcoin Cash, their average relative strength remains higher than the CIX. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) moved lower, ending the week at 0.558. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index is just to the greed side of neutral. The NAAIM money manager exposure index declined slightly to 79.65. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday There is not much economic news scheduled for Monday. There are no relevant earnings reports for the daily update on Monday. Tuesday Producer Price Index data is scheduled for release on Tuesday. We will also get an update on Retail sales data. Both sets of data come before the market open. API Weekly Crude Oil Stock data will be released after the market close. Earnings reports for Tuesday include Oracle (ORCL), H&R Block (HRB), and La-Z-Boy (LZB). Wednesday Build Permits and Housing Starts data will be released in the morning on Wednesday. Crude Oil Inventories get an update after the market opens. The most important events for the day will come in the afternoon. The Fed will release Meeting Minutes and a Fed Interest Rate Decision at 2:00 pm. The Fed Economic Projections will follow that. Investors will watch these updates from the Fed very closely, and the reactions could be oversized in either direction. There are no significant earnings releases for this daily update on Wednesday. Thursday Initial Jobless Claims data is expected to continue to improve on Thursday. The Philadelphia Fed Manufacturing Index will also be released before the market opens. Adobe (ADBE), Kroger (KR), and Jabil (JBL) release earnings on Thursday. The Jabil report will be before the market opens. Friday There is not much significant economic news scheduled for Friday. There are no relevant earnings reports for the daily update. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side This week's bullish and bearish outlook both focus on the Fed comments for Wednesday. Will the Fed have a strong stance toward continuing monetary policy to support the economy further back to health? There are several reasons why they will continue. Jerome Powell has made it clear that they would not change economic support until employment fully recovers. Although employment data is getting better, as indicated by the nonfarm jobs report two weeks ago and the lower initial jobless claims, the labor market is still not fully recovered to pre-pandemic levels. The fears of a monetary policy change have mainly come from rising inflation. Investors have had to balance high inflation data with the level of trust they have in the Fed's statements that inflation is transitionary. There is plenty to indicate that it is transitionary. Much of the price increase pressures have been due to supply chain issues among rising consumer demand, which should ease in the next quarter. Biden's infrastructure plans are meeting resistance among Republicans and even some Democrats. The negotiations will result in a smaller plan and less pressure on commodity prices, helping to ease inflation worries. Employment and inflation will be two significant factors in the Fed's comments on Wednesday. There will be others, including the broader health of the global economy and the progress of the pandemic recovery in Europe and Asia. Altogether, one can expect the Fed to continue monetary policy without any hint of tapering just yet. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Or the Fed might start "talking about talking about" tapering. The mere hint of discussion about when the tapering should start will send investors into a tantrum even if a year away. Even worse is if the Fed starts to signal to worry about inflation being less transitionary than previously thought. That will have investors reconsidering the net present value of future growth in their portfolios and perhaps move into instruments better protected from inflation. Whatever the Fed says on Wednesday, we can expect investors to be very sensitive and reactions to be significant. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq closed above the 14,000 resistance area this week. The 21d EMA crossed back above the 50d MA, a good confirmation of the upward trend. The index is also staying close to the middle of a regression trend channel from the 5/12 low. On the positive side, the levels are: The high of this past week was 14,069.42. Let's make a new weekly high. The all-time high is at 14,211.57. The mid-point of the regression trend from the 5/12 low points to 14,256 by the end of the week. On the downside, there are a few key levels: 14,000 has been a key area of support/resistance. The index has only stayed above this level for a few days at a time since the beginning of 2021. The 10d MA is at 13,847.87. The low of this past week is 13,784.89. The 21d EMA is at 13,765.00, moving back above the 50d MA. The 50d MA is at 13,740.87. There is a pivot at 13,548.93. This is a "higher low" in the current uptrend. There is a support area at 13,000. 13,002.54 is a pivot from May. Below this level is a correction. 12,730.95 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It seems we have something significant to watch every week recently. A few weeks ago, it was inflation. Then it was employment data. This past week, investors focused on consumer sentiment and prices. This coming week, all the focus will be on the Fed on Wednesday. Wednesday's Fed comments could support the index to move back into new all-time highs, or it could be another pivot to the downside and retests of major support areas. There's no way to predict what will happen. The important thing is to know the event is coming and have a plan for your portfolio. Maybe you plan to hold through any news. Perhaps you plan to take some profits. Or set stops at a place that you are comfortable with the risk level. Either way, have a good week. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 6/1/2021 - 6/4/2021Summary: The short week pivoted primarily on Friday's unemployment data, a key signal for investors of how well the economy is recovering. The Nasdaq declined through the first three days but rallied back on Friday after the data was released. The caution for investors was apparent in the top sector list before and after Friday's upside reversal. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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. 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 Meaning of Life." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, June 1, 2021 Facts: -0.09%, Volume lower, Closing range: 37%, Body: 59% Good: Higher high, advance/decline ratio above 1.0, support at 13,700 Bad: Low closing range, faded from morning rally to a lower low Highs/Lows: Higher high, lower low Candle: Outside day, thick red body with a tiny upper wick and longer lower wick. Advanced/Decline: 1.32, more advancing stocks than declining stocks. Indexes: SPX (-0.05%), DJI (+0.13%), RUT (+1.14%), VIX (+6.68%) Sectors: Energy (XLE +3.85%) and Real Estate (XLRE +1.71%) were top. Utilities (XLU -0.61%) and Health (XLV -1.64%) were bottom. Expectation: Sideways or Lower The Dow Jones Industrial Average attempted to set a record, but the small-cap Russell 2000 performed the best among major indices today. As for the Nasdaq, the first day of the summer months started with a rally but faded quickly and continued last week's sideways moves. The Nasdaq closed the day down -0.09% on lower volume. The opening price was nearly the high of the day, but then the index dropped to 13,700 before finding any support. That formed a 59% red body under a barely visible upper wick. The lower wick developed after the morning selling turned to afternoon buying. Despite the slight decline, there were more stocks advancing than stocks declining. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, June 2, 2021 Facts: +0.14%, Volume higher, Closing range: 77%, Body: 15% Good: Gain on higher volume, high closing range, support at 13,700 Bad: Lower high, thin green body Highs/Lows: Lower high, higher low Candle: Inside day, short spinning top with slight longer lower wick Advanced/Decline: 0.91, more declining stocks than advancing stocks. Indexes: SPX (+0.14%), DJI (+0.07%), RUT (+0.13%), VIX (-2.24%) Sectors: Energy (XLE +1.86%) and Real Estate (XLRE +1.39%) were top. Consumer Discretionary (XLY -0.46%) and Materials (XLB -0.84%) were bottom. Expectation: Sideways or Higher Another sideways move for the indexes while investors remained on the sidelines waiting for the economic data coming over the next two days. To pass the boredom, investors watched, or maybe even gambled with meme stocks that had another day of huge swings. The Nasdaq closed with a small +0.14% gain after dipping in the afternoon and finding support again at 13,700. Volume was higher, and the closing range of 77% is good with a thin green 15% body. The short upper wick was formed from gains in the morning, while the longer lower wick formed in selling at the start of the afternoon. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, June 3, 2021 Facts: -1.03%, Volume higher, Closing range: 47% (w/gap), Body: 30% Good: Not much Bad: Gap down at open, broke support at 13,700, close below major moving averages Highs/Lows: Lower high, lower low Candle: Long lower wick, red body in upper half of the candle Advanced/Decline: 0.6, More than three declining stocks for every advancing stock Indexes: SPX (-0.36%), DJI (-0.07%), RUT (-0.81%), VIX (+3.09%) Sectors: Consumer Staples (XLP +0.62%) and Utilities (XLU +0.60%) were top. Technology (XLK -0.93%) and Consumer Discretionary (XLY -1.19%) were bottom. Expectation: Sideways or Lower Mixed economic data moved investors into defensive mode on Thursday while they await more news on the labor market scheduled for Friday. Today's data gave a boost to the US Dollar but stoked fears of the Fed tapering off monetary policy earlier than expected. The defensive sectors were up for the day while growth sectors took a step back from recent gains. The Nasdaq closed with a -1.03% decline on higher volume, marking a day of distribution for investors. The closing range of 47% is not terrible, but the 30% red body shows the index could not fully recover from the sell-off after market open. The longer lower wick is representative of the failed attempt to rally back to above key moving average lines. There were more than three declining stocks for every two advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, June 4, 2021 Facts: +1.47%, Volume lower, Closing range: 91%, Body: 87% Good: Held morning gains throughout day for a higher high and higher low Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Mostly green body with a tiny upper wick, no lower wick, small gap up Advanced/Decline: 1.04, About the same number of advancing and declining stocks Indexes: SPX (+0.88%), DJI (+0.52%), RUT (+0.31%), VIX (-8.87%) Sectors: Technology (XLK +1.92%) and Communications (XLC +1.43%) were top. Real Estate (XLRE +0.09%) and Utilities (XLU -0.15%) were bottom. Expectation: Higher The market responded positively to jobs data released in the morning, sending indexes higher and boosting growth sectors. The unemployment rate dropped more than expected while non-farm payrolls May started to accelerate. The Nasdaq gained +1.47% for the day on lower volume. The high closing range of 91% and green body covering 87% of the candle represent morning gains that turned into a steady hold near intraday highs in the afternoon. There is no lower wick and a small upper wick. There were about the same number of advancing stocks as declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- View on the Week The short week pivoted primarily on Friday's unemployment data, a key signal for investors of how well the economy is recovering. The Nasdaq declined through the first three days but rallied back on Friday after the data was released. The caution for investors was apparent in the top sector list before and after Friday's upside reversal. Energy led early in the week as oil prices continued to climb to highs not seen since 2018. On Thursday, Consumer Staples and Utilities topped the list, a defensive move for investors to prepare ahead of any disappointment in the employment data on Friday. It also didn't help those fears that the tone changed slightly from the Fed, announcing they'd be selling the bonds and bond ETFs they purchased during the pandemic-driven economic crisis. The purchases were small compared to other monetary policies, but investors view it as just the beginning of more tapering. The employment data on Friday morning was a mix of results against analyst expectations. Unemployment was better than expected. Nonfarm Payrolls was better than April, showing acceleration but less than expected. One interpretation for the data is that it was good enough to show the economic recovery but not so great that the Fed would change monetary policy. The meme stocks were back in the headlines this week, with GameStop (GME), AMC (AMC), Bed Bath & Beyond (BBBY), and Workhorse (WKHS) among stocks that were pumped up by retail investors, forcing gamma squeezes that sent several of them soaring as high as 100% mid-week. The Nasdaq closed with a +0.48% gain for the week. Volume was lower than the previous week. The closing range of 92% was good but is above a long lower wick created in the first part of the week. The index climbed back on Friday to end the week with a thin 5% body, the close for the week just below the open. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) closed the week near all-time highs. The S&P 500 gained +0.61% for the week, while the Dow Jones gained +0.66%. The Russell 2000 (RUT) closed the week with a +0.77% gain. The VIX volatility index declined -2.03% for the week. Energy ( XLE ) and Real Estate ( XLRE ) led the sector list for the week, establishing their lead early in the week. Energy got a boost from the rise in oil prices on high demand. Real Estate is gathering momentum from rising housing and rental prices while also being a great hedge against inflation. The focus on employment data released on Friday morning is clear in two pivots. There was a sharp sell-off of most sectors except Consumer Staples ( XLP ) and Utilities ( XLU ) on Thursday ahead of the report. The two sectors are good defensive plays when investors get nervous about how the market may react to news or events. After the report was released, Technology ( XLK ), Consumer Discretionary ( XLY ), and Communications ( XLC ) rallied on Friday. It seems the employment data was good enough to keep a positive outlook, while not so good to drive more fears of tapering by the Fed. Health Care ( XLV ) was the worst-performing sector for the week. The US Treasury 30y, 10y, and 2y yields declined for the week, and the spread between long and short-term yields tightened more. Yields on longer-term treasuries dropped on Friday's economic news. They have been in decline since the huge gains in March. At the time, the accelerating yields and widening spread raised fears in investors and caused a sell-off of big tech and growth stocks. The High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) advanced +0.09% for the week. The dollar index spiked on Thursday but then returned to the base on Friday following the employment data. Silver (SILVER) declined -0.42%, and Gold (GOLD) declined -0.67%. Both dipped as the dollar rose on Thursday but recovered some of the loss on Friday. Crude Oil (CRUDEOIL1!) advanced +4.45%, continuing to move toward highs in 2018. Timber (WOOD) declined -1.52%. This is the fourth week of declines. Copper (COPPER1!) declined -3.07%. Aluminum (ALI1!) declined -1.64%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps The 10-week and 40-week moving average lines are providing support and resistance for the four largest mega-caps. Alphabet (GOOGL) has support at the 10w line, riding above the line for the past four weeks and gaining +1.56% this week. Microsoft (MSFT) is finding resistance at the 10w line for three weeks, gaining +0.44% this week. Apple (AAPL) and Amazon (AMZN) are below their 10w lines but getting support at the 40w line. Apple (AAPL) gained +1.03% for the week, while Amazon (AMZN) declined -0.52%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Exxon Mobil (XOM) rose +5.28% this week as oil prices gained for another week. Carnival Cruise Lines (CCL) gained +3.32% as the demand for leisure options rises. However, Delta (DAL) and Marriott (MAR) had losses of -3.57% and -1.06%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). There was more volatility in the major cryptocurrencies this past week. Ethereum (ETHUSD) was the biggest gainer with a +12.3% advance. Bitcoin (BTCUSD) volatility continues on random tweets by Elon Musk, gaining +1.2%. Litecoin (LTCUSD) advanced +3% while Bitcoin Cash (BCHUSD) declined -0.5%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) moved lower, ending the week at 0.586. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index is just to the fear side of neutral. The NAAIM money manager exposure index rose to 82.27, the second week of increases. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday There is not much economic news on the calendar for Monday. Marvell (MRVL) and Vail Resorts (MTN) are the most significant earnings reports for Monday. Tuesday Trade Balance data for April will be released before the market opens on Tuesday. After the market opens, the JOLTS Job Openings report for April will be available. There is a 3-Year Note Auction in the afternoon, and Weekly Crude Oil Stock will be released after the market closes. There are no relevant earnings reports for the daily update. Wednesday Wednesday morning will bring Crude Oil Inventories data after the market opens. In the afternoon, a 10-Year Note Auction may have an impact on interest rates. GameStop (GME), RH (RH), and Lovesac (LOVE) will release earnings on Wednesday. Thursday Economic news on Thursday includes the OPEC Monthly Report early in the morning. Core Consumer Price Index data gets released before the market open. Initial Jobless Claims also gets its weekly update. In the after, the Federal Budget Balance for May will be made available. On Thursday, the only significant earnings report for the daily update is Chewy (CHWY). Friday We'll get the first consumer sentiment and expectations data for June after the market opens on Friday morning. There are no relevant earnings reports for the daily update. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Unrealized fears have driven much of the choppy market these past several months. First, it was the fear in January of what retail investors and meme stocks might do to damage confidence in equity markets. But after a brief and slight dip in January, the fear of missing out drove significant gains in the first half of February. In early March, we saw the wild climb of treasury yields and steepened yield curve, destabilizing the bond market and providing no safe hedge for investors. Everyone was shouting Yield Curve Control, and in early March, we saw the first significant drop in equities. But the yields stopped climbing, and bonds found stability. Then it was the fear of out-of-control inflation and the potential action from the Fed. Any good economic news was met with a quick sell-off of growth stocks as the Fed tapering was sure to come at any moment. That never happened, but it didn't stop investors from selling off growth in May. So here we found ourselves this week, with fear of surprise employment data. Honestly, I heard all week investors were concerned about the data, but I never knew if they were worried it would be too good or too bad. But the data came, and the fears slid away as investors moved back into growth stocks, albeit on lower volume. Following such a fantastic year in 2020, with the quick recovery from March lows and great returns for almost any investment, it's no wonder investors are waiting for the big correction. But there are plenty of indications that there is still upside in growth stocks. First, much of the rotation has been into cyclical sectors in recent months, including Industrials and Materials. The rotation was to recovering industries that were impacted by the pandemic. It was also to stocks expected to benefit from spending in Biden's infrastructure plans. nIt's clear that the infrastructure plans will need to be scaled back to get agreement across the aisle, and the capital gains tax seems to have quite a bit of resistance as well. Inflation fears have also been a considerable headwind for growth stocks, with commodity prices soaring ahead of price index data. However, we finally see a downward trend with commodity prices (not including oil). Wood, copper, and aluminum that are part of this update are all trending downward. Those dropping prices should begin showing up in the producer and consumer price index data soon. Finally, long-term treasury yields continue to slowly but surely come down, and the yield curve is flattening. The US Dollar dropped back to the level we saw at the beginning of the year. Both the low-interest rates and the weakened US Dollar can be supportive for big tech and growth stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side There is still plenty that can change to induce more fear in investors. The G7 agreed to a minimum global tax of 15% to reduce multinationals' ability to steer profits toward low-tax countries to avoid taxes in their home country. It's not clear yet what the real impact will be for big tech and growth companies. New consumer price index data this week may be enough to stir up inflation fears again. After the Fed decided to sell off bond purchases last week, investors will be watching very closely for any further change in tone. The market wants to price in any monetary policy changes before they become real. Fear after fear has come and gone this year without any realization of what was feared. But at some point, one of these fears may just come true and give the market the anticipated correction. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq dipped below the 21d EMA and 50d MA this week but quickly recovered to close above the key moving averages. By the end of the week, the index was back above 13,800, where it started the week. On the positive side, the levels are: The high of this past week was 13,836.17. 14,000 has been a key area of support/resistance. The index has only stayed above this level for a few days at a time since the beginning of 2021. The mid-point of the regression trend from the 5/12 low points to 14,072 by the end of the week. The all-time high is at 14,211.57. On the downside, there are a few key levels: There is a support area at 13,600 - 13,700. The 10d MA is at 13,693.41. The key moving averages are lined up close to each other. The 50d MA is at 13,654.08. The 21d EMA is at 13,639.43. The low of this past week is 13,548.93. There is a support area at 13,000. 12,786.81 is a low pivot point from the late March dip. Stay above this low to keep an upward trend since early March. 12,612.16 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Employment data on Friday breathed new life into big tech, growth stocks, and the Nasdaq. However, the gains were on lower volume, so we'll need to wait until Monday to find out if there is any follow-through on higher volume. With the G7 global tax agreement over the weekend, some initial reactions could keep investors modest to start the week. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
1
Market Week in Review - 5/24/2021 - 5/28/2021Summary: The week opened with reassurances that the Fed would not change monetary policy, helping to move the dialogue off inflation and turn the trade back toward growth. However, caution remained. There were gains, but some indecision in the indexes remained, and rotation was back into value and defensive plays at the end of the week. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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 Meaning of Life." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, May 24, 2021 Facts: +1.41%, Volume lower, Closing range: 70%, Body: 66% Good: Higher high, higher low, high closing range Bad: Upper wick from fade before close, lower volume, A/D ratio Highs/Lows: Higher high, higher low Candle: Large green body under a long upper wick. No lower wick. Advanced/Decline: More declining stocks than advancing stocks. Indexes: SPX (+0.99%), DJI (+0.54%), RUT (+0.54%), VIX (-7.73%) Sectors: Communications (XLC +1.82%) and Technology (XLK +1.78%) were top. Health (XLV +0.10%) and Utilities (XLU -0.18%) were bottom. Expectation: Sideways or Higher The Fed made new promises today to keep an easy monetary policy, helping boost growth stocks. Stocks that suffered from inflation fears were the ones that had the most gains today. The Nasdaq rose +1.41%, but on lower volume for the day. The closing range of 70% results from a fade in prices before close, but the candle still has a 66% green body from the bullish day. Despite the bullish day in the indexes, there were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, May 25, 2021 Facts: -0.03%, Volume higher, Closing range: 21%, Body: 54% Good: The higher high and higher low continues the uptrend Bad: Could not revisit the high just after open, and higher volume in selling with low A/D Highs/Lows: Higher high, higher low Candle: Shallow red body within a tight intraday range. Slightly longer upper wick. Advanced/Decline: Two declining stocks for every advancing stock. Indexes: SPX (-24%), DJI (+0.24%), RUT (-0.97%), VIX (-7.73%) Sectors: Consumer Discretionary (XLY +0.32%) and Real Estate (XLRE +0.28%) were top. Utilities (XLU -1.21%) and Energy (XLE -2.03%) were bottom. Expectation: Sideways or Higher The indices pulled back a bit from yesterday's gains after consumer confidence numbers were lower than expected, indicating some possible bumps in the economic recovery. That left us still waiting for a higher volume advance with more breadth in gains across the market. The Nasdaq moved sideways with a small -0.03% declined by the end of the day. Volume was higher for the day. The index fell after a very brief rally after open, creating a 54% red body with small upper and lower wicks. The closing range of 21% is in the middle of the afternoon trading range, with the index moving sideways most of the day. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, May 26, 2021 Facts: +0.59%, Volume higher, Closing range: 83%, Body: 62% Good: Higher volume with breadth of gains across index Bad: No higher high Highs/Lows: Lower high, higher low Candle: Inside day. A shallow green body with the high and low within the previous day's range. Advanced/Decline: Two advancing stocks for every declining stock. Indexes: SPX (+0.19%), DJI (+0.03%), RUT (+1.97%), VIX (-7.31%) Sectors: Consumer Discretionary (XLY +0.95%) and Energy (XLE +0.89%) were top. Consumer Staples (XLP -0.21%) and Health (XLV -0.58%) were bottom. Expectation: Sideways or Higher Investors put their inflation worries aside today and jumped back into growth and small-cap stocks. The breadth of gains across stocks on higher volume in the indices shows the kind of accumulation we've wanted. There is still overhead supply to deal with among many growth stocks, but today is a move in the right direction. The Nasdaq closed the day with a +0.59% gain on higher volume. The candlestick is an inside day where the high and low are within the high and low of the previous day. The closing range of 83% over a 62% green body represents a bullish day, but the narrow trading range exposes some remaining caution among investors. There were more than two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, May 27, 2021 [chart [https://www.tradingview.website/chart/IXIC/imyDyxkr-Daily-Market-Update-for-5-27/ Facts: -0.01%, Volume higher, Closing range: 46%, Body: 8% Good: Higher high and higher low Bad: Could not hold onto intraday gains Highs/Lows: Higher high, higher low Candle: Indecisive spinning-top red candle, thin red body in the middle of two long wicks. Advanced/Decline: Three advancing stocks for every two declining stocks. Indexes: SPX (+0.12%), DJI (+0.41%), RUT (+1.06%), VIX (-3.57%) Sectors: Industrials (XLI +1.37%) and Financials (XLF +1.15%) were top. Consumer Staples (XLP -0.62%) and Utilities (XLU -0.67%) were bottom. Expectation: Sideways or Lower Positive employment and durable goods orders data gave a boost to the cyclical sectors today. Investors rotated out of big tech and some growth stocks and into value stocks and small caps. Even so, there were a broad set of gains on higher volume, even in the tech-heavy Nasdaq. The Nasdaq closed nearly where it opened with a slight -0.01% loss. The spinning-top style candle has a thin 8% red body in the middle of equal length upper and lower wicks, resulting in a 46% closing range. The candle signals indecision among investors, which is in line with this week's market character. Despite the slight loss, there were three advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, May 28, 2021 Facts: +0.09%, Volume lower, Closing range: 2%, Body: 59% Good: Higher high and higher low Bad: Low closing range, couldn't hold mid-day high Highs/Lows: Higher high, higher low Candle: Red body with no lower wick, visible upper wick. Advanced/Decline: 0.76, more declining stocks than advancing stocks. Indexes: SPX (+0.08%), DJI (+0.19%), RUT (-0.18%), VIX (+0.12%) Sectors: Real Estate (XLRE +0.67%) and Utilities (XLU +0.54%) were top. Consumer Discretionary (XLY -0.14%) and Communications (XLC -0.33%). Expectation: Sideways or Lower Little by little. That's been how the index gains have come this week. Higher lows pushed up higher highs through the week as investors grapple with a mix of economic news and shrugged off inflation data. It was the same for Friday. Price index data was higher, but it didn't seem to bring any surprises. Consumer data was a mix of results against expectations, causing a bit of uncertainty. Add a three-day weekend, and investors moved into defensive plays. The Nasdaq closed with a +0.09% gain but faded from the mid-day high. Volume was lower for the day and lower in the afternoon selling, which was a good sign for bulls. The closing range of 2% and red 59% body creates a candlestick with no lower wick. The upper wick formed from the morning rally. Today's session marks seven days of a higher low. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The week opened with reassurances that the Fed would not change monetary policy, helping to move the dialogue off inflation and turn the trade back toward growth. However, caution remained. There were gains, but some indecision in the indexes remained, and rotation was back into value and defensive plays at the end of the week. Monday was the best day of the week for the Nasdaq, gaining +1.41% for the day. It came on lower volume but started the upward trend in both price and volume for the rest of the week. Tuesday brought a pull-back as investors took profits from Monday's session. However, Consumer Discretionary remained at the top of the sector list, and Technology had small gains despite the pull-back in the tech-heavy Nasdaq index. Overall, it still looked good for growth stocks. Wednesday proved that investors were still interested in growth stocks. They put inflation worries to bed and reinvested, taking stocks higher on higher volume, with two advancing stocks for every declining stock. The pace changed a bit on Thursday after attention moved back to infrastructure spending and robust economic recovery data. That caused a rotation back to cyclicals and value stocks that investors ignored earlier in the week. Still, the Nasdaq held close to the previous day's price on higher volume, and there was a breadth of gains across stocks in the index. There were no surprises for the end of the week. The index moved higher in the morning but couldn't hold the gains as investors moved into defensive positions for the three-day weekend and the start of the typically low-performing summer months. The Nasdaq climbed +2.06% for the week. Volume was higher than the previous week. The closing range was 73%, a good sign and strengthened by the higher high and higher low. The small-cap Russell 2000 (RUT) had the best week of the major indices, gaining +2.42%. The S&P 500 (SPX) advanced +1.16%. The Dow Jones Industrial Average (DJI) gained +1.16%. The VIX volatility index declined -16.36% for the week. Growth sectors stole the show this week as investors put inflation worries aside and boosted Communications ( XLC ) and Technology ( XLK ) early in the week. The focus was on the growth sectors from Monday to Wednesday. Technology faded back in the list, buy Consumer Discretionary ( XLY ) joined Communications to end the week at the top of the list. On Thursday, there was a rotation into cyclicals, bringing Industrials ( XLI ) higher in the list. Industrials ended the week in fourth place. Friday brought out the defensive plays heading into a three-day weekend and the start of the summer months. That gave a boost to Real Estate ( XLRE ), Health Care ( XLV ), Utilities ( XLU ), and Consumer Staples ( XLP ). Real Estate ( XLRE ) ended in third place for the week, while Health Care and Utilities remained at the bottom two sectors for the week. The US Treasury 30y, 10y, and 2y yields declined for the week, and the spread between long and short-term yields tightened more. The High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) seemed to find an area of support around 90, dipping early in the week but then ending the week with a +0.03% advance. Silver (SILVER) advanced +1.38%, and Gold (GOLD) advanced +1.19%. Crude Oil (CRUDEOIL1!) advanced +4.21%, hitting recent highs. Timber (WOOD) declined -0.10%. This is the third week of declines. Copper and Aluminum had significant advances on Thursday thanks to a renewed focus on infrastructure spending. Copper (COPPER1!) advanced +3.50%. Aluminum (ALI1!) advanced +5.48%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Alphabet (GOOGL) continues to be the strongest of the four largest mega-caps this week. It has consistently outperformed the index this year. This week, Alphabet advanced +2.73%, continuing the climb after touching its 10w moving average line. Microsoft (MSFT) is also doing well with a +1.84% gain this week and topping the 10w line before closing below it. Amazon (AMZN) gained +0.62%, losing momentum from earlier in the week and closing just above the 40w moving average line. Apple (AAPL) had its fifth week of declines, losing -0.65% this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Exxon Mobil (XOM) was the only one with a loss this week, declining -0.93% but getting support at the 10w moving average line. Carnival Cruise Lines (CCL) rose +8.80% for the week and could be ready to break out of a base. Delta Airlines (DAL) moved above the 10w moving average line with a +5.46% gain. Marriott (MAR) gained +3.29% but remained below the 10w moving average line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I started tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The cryptocurrencies bounced back from two weeks of losses. Bitcoin (BTCUSD) gained +4.29%. Ethereum (ETHUSD) gained +18.79%. Litecoin (LTCUSD) gained +26.37%. Bitcoin Cash (BCHUSD) gained +24.21%. Ethereum is the only of the four near its 10w moving average, having poked above it earlier in the week. The other three are trading in between the 10w and 40w moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment www.tradingview.com The put/call ratio (PCCE) moved lower, ending the week at 0.593. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index remains on the fear side. The NAAIM money manager exposure index rose to 68.3 after dipping to 44.2 the previous week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday Monday is Memorial Day in the US, and the markets will be closed. Tuesday On Tuesday, the ISM will release Manufacturing data, including the purchasing managers index and employment data, showing the sector preparing for future rise or fall in demand. Zoom Video (ZM), Hewlett Packard (HPE), and Digital Turbine (APPS) will release earnings reports on Tuesday. Wednesday Some more updates from the Federal Reserve come on Wednesday with the release of the Beige book and comments from Fed member Raphael Bostic in the afternoon. API Weekly Crude oil stock updates come after market close. Advanced Auto Parts (AAP) will release earnings. Otherwise, there are not many interesting earning reports for the daily update. Thursday More employment data is coming on Thursday with Nonfarm Employment Change, Initial Jobless Claims, Productivity, and Labor Costs. Services PMI is a leading indicator of demand for services such as hotels, restaurants, and others. Crude Oil Inventories will be available late in the morning. Fed members are scheduled to speak in the afternoon. Thursday's earnings reports include Broadcom (AVGO), Crowdstrike (CRWD), Lululemon (LULU), Docusign (DOCU), Slack (WORK), MongoDB (MDB), Five Below (FIVE), Pagerduty (PD), Sumo Logic (SUMO), Friday Fed Chair Jerome Powell is scheduled to speak early in the morning on Friday. Then more employment data will be released before markets open. After the market opens, Factory Orders will be released. There are no earnings reports relevant for the daily update on Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Investors turned their attention back to the growth stock trade this past week. The new confidence comes after the Fed reinforced that they will make no monetary policy changes until they see employment and economic activity recovers fully. That also helped the US Dollar and interest rates remain low, which can boost big tech and growth stocks. It's reasonable to expect more upside for growth stocks in the next few weeks. It also seems that retail investors are entering back into the picture. For better or worse, the meme stocks that got much attention early in the year are starting to see the same gains again. Once those trades play out, we could see additional retail activity in some of the favorite growth names as well. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Sell in May and go away is the age-old mantra. As investors came to the end of this week, we saw them move into defensive sectors that tend to stay steady regardless of the ups and downs of the market. That could be because there is a three-day weekend coming up, but investors may also be prepping for the drawdowns that often come in the summer months. The months of June to September historically don't do as well as other months. Each of those months has gains less than 60% of the time in stock market history. Any economic news this week that is disappointing may be the catalyst that ensures investors go away. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The index moved back above the 21d EMA and 50d MA lines this week. The 21d EMA is approaching the 50d MA and may cross above in the next week, confirming a good uptrend. The index is also back above the 13,600 - 13,700 support/resistance area. It rose above this area on Wednesday and stayed above it through the end of the week. On the positive side, the levels are: The high of this past week was 13,820.87. The rally attempt of two weeks ago made it to 13,828.62. A move above that level adds confidence to this rally. 14,000 has been a key area of support/resistance. The index has only stayed above this level for a few days at a time since the beginning of 2021. The all-time high is at 14,211.57. On the downside, there are a few key levels: The key moving averages are lined up close to each other. The 50d MA is at 13,611,29. The 21d EMA is at 13,596.57. The 10d MA is at 13,553.05. The low of this past week is 13,551.01. There is a support area at 13,000. 12,786.81 is a low pivot point from the late March dip. Stay above this low to keep an upward trend since early March. 12,612.16 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up It was the most exciting rally this week. It started with a bang but then slowed through the remainder of the week. A slow, steady climb may be boring, but it isn't necessarily a bad thing, helping build new support levels that can keep the index moving higher instead of making new lows. Next week is a short week with a lighter set of economic news and earnings reports. The main concern now is how the market enters the summer and whether investors will go on vacation or keep driving prices higher. If you are in the US, enjoy your Memorial Day Weekend! Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
5
Market Week in Review - 5/17/2021 - 5/21/2021Summary: Are you tired of hearing about inflation yet? Well, it's still very much the focus of investors and driving the wild up-and-down movements in the Nasdaq. This week's most crucial moment was clearly on Wednesday at 2:00 pm when the Fed released the minutes from last month's meeting. Investors poured over the report looking between the lines for hints of inflation concerns and potential fed action to control it. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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 Meaning of Life." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, May 17, 2021 Facts: -0.38%, Volume lower, Closing range: 85%, Body: 8% Good: Close in upper part of range, bulls took over in afternoon Bad: Lower high, selling most of day Highs/Lows: Lower high, higher low Candle: Tiny thin body over a long lower wick. Advanced/Decline: More declining stocks than advancing stocks Indexes: SPX (-0.25%), DJI (-0.16%), RUT (+0.11%), VIX (+4.84%) Sectors: Energy (XLE +2.32%) and Materials (XLB +0.88%) were top. Communications (XLC -0.79%) and Utilities (XLU -0.82%) were bottom. Expectation: Sideways or Higher Monday started with a dip, just like the past several Mondays. This week's difference is that the bulls entered in the afternoon, bringing the major indices back to near their open. Small Caps performed best on the day as inflation still weighed on big tech and mid-cap growth. The Nasdaq closed with a -0.38% loss on lower volume. The 85% closing range over an 8% green body is in the upper part of the candle over a long lower wick. The candle indicates the bulls weren't willing to let go, but still, there was indecision in the market. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, May 18, 2021 Facts: -0.56%, Volume higher, Closing range: 2%, Body: 61% Good: Higher high, higher low Bad: Couldn't hold morning rally, closed day at low Highs/Lows: Higher high, higher low Candle: Red body under a long upper wick and almost no lower wick Advanced/Decline: More declining stocks than advancing stocks Indexes: SPX (-0.85%), DJI (-0.78%), RUT (-0.73%), VIX (+8.22%) Sectors: Real Estate (XLRE +0.19%) and Health (XLV +0.03%) were top. Industrials (XLI -1.46%) and Energy (XLE -2.32%) were bottom. Expectation: Sideways or Lower Surprisingly robust earnings reports from big retail before market open sent major indices on a rally in the morning. Still, the bullish exuberance couldn't hold on, and the indices closed the day with losses. Despite the downward pressure on the indexes, the growth stock list had a relatively good day. The Nasdaq closed with a -0.56% loss for the day but was able to turn in a higher high and higher low than the previous day. The index rose in the early morning but then fell the rest of the day, creating an upper wick in the morning but ending the day with a 2% closing range underneath a 61% red body. Volume was higher for the day, with intraday volume more elevated in the morning than in the afternoon. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, May 19, 2021 Facts: -0.03%, Volume higher, Closing range: 2%, Body: 61% Good: Thick green body shows buying after a gap down at open Bad: Gap down at open Highs/Lows: Lower high, lower low Candle: All green body, barely visible upper and lower wicks Advanced/Decline: Two declining stocks for every advancing stock Indexes: SPX (-0.29%), DJI (-0.48%), RUT (-0.78%), VIX (+3.94%) Sectors: Technology (XLK +0.35%) and Communications (XLC +0.16%) were top. Materials (XLB -1.53%) and Energy (XLE -2.49%) Expectation: Sideways or Higher You shake my nerves, and you rattle my brain! There is no question what investors worried about today. They took risk off the table at open ahead of the Fed minutes. Then morning comments from Fed member Quarles started to attract investors back in but at lowering volume. When the meeting minutes were released, volume popped back up as the market reacted. The Nasdaq closed with a -0.03% loss, much better than the -1.71% dip at open. Volume was higher than the previous day. The 95% green body and 98% closing range shows the buying throughout the day. There is the potential, as with 5/11, that the gap down caused some shorts to cover and take profits. But much of the action seemed to be centered around the 2 pm release of the Fed minutes. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, May 20, 2021 Facts: +1.77%, Volume lower, Closing range: 89% (w/gap), Body: 86% Good: No lower wick, thick green body with high closing range Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Gap up at open, mostly green body with a short upper wick Advanced/Decline: Three advancing stocks for every two declining stocks Indexes: SPX (+1.06%), DJI (+0.55%), RUT (+0.64%), VIX (-6.81%) Sectors: Technology (XLK +1.91%) and Communications (XLC +1.71%) were top. Financials (XLF +0.05%) and Energy (XLE -0.15%) were bottom. Expectation: Higher A better-than-expected jobs report was enough to continue the trend in Technology and Communications stocks that started yesterday. Eyes remain on the Fed and inflation. Still, a drop in the US dollar and US treasury rates, in addition to lowering expectations from a few retailers, gave investors some relief that the economy was not overheating out of control. The Nasdaq closed the day with a +1.77% advance. Volume was lower, but the gap-up and higher high and higher low are both great signs. With the gap, the closing range was 89%. An 86% green body sits under a short upper wick formed late in the date. There is no visible lower wick. There were three advancing stocks for every two declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, May 21, 2021 Facts: -0.48%, Volume lower, Closing range: 5%, Body: 95% Good: Higher high, higher low, lower volume on down day Bad: Selling throughout session, high at open, low near close Highs/Lows: Higher high, higher low Candle: Barely visible lower wick, no upper wick, mostly red body Advanced/Decline: Slightly more declining than advancing stocks Indexes: SPX (-0.08%), DJI (+0.36%), RUT (+0.34%), VIX (-2.52%) Sectors: Financials (XLF +0.99%) and Utilities (XLU +0.52%) were top. Consumer Discretionary (XLY -0.50%) and Technology (XLK -0.55%) were bottom. Expectation: Sideways Big tech and growth stocks paused after two days of gains, while investors boosted recovery stocks after good economic data in the morning. The purchasing manager indexes for Manufacturing and Services were higher than expected, indicating an uptick in demand in both sectors. The Nasdaq started the day in the positive but ended with a -0.48% decline after a full day of selling. Volume was lower than the previous day. The Nasdaq did put in a higher high and higher low than Thursday. However, the candle is an almost entirely red body, with a 5% closing range. There were slightly more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) Are you tired of hearing about inflation yet? Well, it's still very much the focus of investors and driving the wild up-and-down movements in the Nasdaq. This week's most crucial moment was clearly on Wednesday at 2:00 pm when the Fed released the minutes from last month's meeting. Investors poured over the report looking between the lines for hints of inflation concerns and potential fed action to control it. On Monday and Tuesday, the Nasdaq retreated ahead of the Fed minutes release. Investors focused on cyclical sectors (XLE, XLB) on Monday and defensive sector sectors (XLRE, XLV, XLU) on Tuesday. The market opened with a gap down on Wednesday. Investors responded to the gap and slowly bought back stocks through the morning as volume dropped on the Nasdaq. At the 2:00 pm release of the fed minutes, volume immediately picked back up, and a rally began that lasted through Thursday. The rally also came with a change in the sector list. The growth sectors of Technology (XLK) and Communications (XLC) led from Wednesday morning through Thursday. On Friday, the growth sectors paused while some of the value plays had a chance to catch up. I'll include the Growth/Value chart that frequently shows up in the weekly review. In the chart, you can see the spike in growth relative to value on Wednesday and Thursday, with a slight retreat on Friday. There is not enough for a trend yet. And there is still question of which way the market will go in the next few weeks. The first question is in this chart. Is this spike in growth vs. value an indication of a trend? Have popular growth stocks found a bottom and ready to climb again? Or is it merely a quick spike, and investors will move back to the value trade? The Nasdaq advanced +0.31% on the lowest volume week thus far in 2021. The closing range of 73% is a good sign, while the inside week and thin green body show indecision in direction. The other three major indices all declined for the week. The S&P 500 (SPX) lost -0.43%. The Dow Jones Industrial Average (DJI) declined -0.51%. The Russell 2000 (RUT) fell -0.42%. The VIX volatility index closed the week with a +6.59% weekly gain. Sector performance provides some clues this week on how investors are thinking about inflation and the Fed. Like the market character changed around the Wednesday release of the Fed meeting minutes, the sectors also saw a change in leadership. The question remains if that new character sticks for the coming weeks or gets disrupted as the inflation story unfolds. Real Estate ( XLRE ), Health Care ( XLV ), and Utilities ( XLU ) top the list for the full week, and that reflects well the overall mood of investors. These sectors are used as defensive sectors. Regardless of whether economic conditions serve better cyclical stocks or growth stocks, the services in these defensive sectors are always required. Consumer Staples ( XLP ) is also up in that list and outperformed the S&P 500 index. For the remaining sectors, it's worth looking at performance before and after the Wednesday Fed release. Coming into the week, there was a clear focus on cyclical sectors, with Energy ( XLE ) and Materials ( XLB ) leading on Monday. Investors turned defensive on Tuesday, popping the defensive sectors to the top. And then the gap down at open came on Wednesday with shifting investments on lower volume leading into the meeting minutes release at 2p. After Wednesday, it's clear there was a change in sentiment. Technology ( XLK ) and Communications ( XLC ) came out of the gap-down and performed best through the end of the week, despite a small pullback for both on Friday. They performed well enough to end the week outperforming the S&P 500 index. That leaves the cyclical sectors at the bottom of the list. Materials ( XLB ), Industrials ( XLI ), and Energy ( XLE ) were the bottom three sectors. For these sectors, much rests on Biden's infrastructure plans passing through congress, but the proposals continue to be rejected by Republicans. It's reasonable to expect that with continued headwinds for the infrastructure bill, we'll see some downside for cyclical sectors, see inflation decelerate a bit, and give some life to growth stocks, even if for a short period. The US Treasury 30y and 10y yields declined for the week while the 2y yield rose. That tightened the spread between long and short-term yields. Both the High Yield Corporate Bond (HYG) prices declined while Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) continues choppy trading with gains and losses this week. It ended the week at a -0.31% decline. Silver (SILVER) advanced +0.45% while Gold (GOLD) advanced +2.07%. Crude Oil (CRUDEOIL1!) declined -2.65%. The material commodities continued to pull back from record highs two weeks ago. Timber (WOOD) declined -2.62%. Copper (COPPER1!) declined -4.30%. Aluminum (ALI1!) declined -3.52%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Big Four Mega-caps Only Alphabet (GOOGL) is trading above its 10w moving average of the big four mega-caps, gaining +0.69% this week. Apple (AAPL) declined -0.61%. Microsoft (MSFT) declined -1.20%. Amazon (AMZN) declined -0.61%. Note that the Nasdaq gained while the largest mega-caps in the index declined. The means the Nasdaq gains came from a broader set of stocks, a positive sign. However, having the big four mega-caps participate in gains would give a boost to investor sentiment. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. This week, all four recovery stocks declined. Do investors see the recovery as stalling, or do they see the recovery already priced into these stocks? Exxon Mobil (XOM) declined -3.04%. Marriott (MAR) dropped -2.99%. Delta Airlines (DAL) lost -2.38%. Carnival Cruise Lines declined -0.11%. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I'll start tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, tracking five cryptocurrencies, including these four (Ripple is the fifth). The major cryptocurrencies are in a two-week slide. Bitcoin (BTCUSD) declined -20.48% this week. Ethereum (ETHUSD) is down -37.81%. Litecoin (LTCUSD) dropped -42.89%. Bitcoin Cash (BTHUSD) is down -45.85%. The first two are down nearly 50% from highs. The latter two are down more than 60% from highs. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) remained high, ending the week at 0.668. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed Index remains on the fear side. The NAAIM money manager exposure index declined to 44.21. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday There is not much economic news scheduled for Monday. Fed member Brainard will speak in the morning, and Bostic will speak at noon. Lordstown Motors (RIDE) will report earnings on Monday. Tuesday Consumer Confidence and New Home Sales numbers will be released after the market opens on Tuesday. Intuit (INTU), AutoZone (AZO), Zscaler (ZS), Nordstrom (JWN), MakeMyTrip (MMYT), and UP Fintech (TIGR) will release earnings updates. Wednesday Crude Oil Inventories will be released on Wednesday after the market opens. Earnings releases will include Nvidia (NVDA), Pinduoduo (PDD), Snowflake (SNOW), Workday (WDAY), and Okta (OKTA). Thursday On Thursday, Durable Goods orders data will get an update. We will also get the revised GDP numbers for Q1, which should align with the previously released numbers. Initial Jobless Claims and Pending Home Sales will also get an update. Salesforce.com (CRM), Medtronic (MDT), Costco (COST), VMWare (VMW), Autodesk (ADSK), Dollar General (DG), Veeva Systems (VEEV), HP Inc (HPQ), Best Buy (BBY), Dollar Tree (DLTR), Burlington Stores (BURL), GameStop (GME), and Gap (GPS) release earnings on Thursday. Friday Friday will bring another update on inflation with the PCE Price Index data. In addition, we will see updates for Goods Trade Balance, Personal Spending, Retail Inventories, and Consumer Sentiment. Big Lots (BIG) and Ehang Holdings (EH) will release earnings. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side It looks like a sentiment change toward growth stocks occurred this past Wednesday when concerns about inflation did not come with any strong hints of monetary policy changes from the Fed. The Fed has pointed to several employment indicators suggesting that easy monetary policy will need to continue for some time until the economy fully recovers. It also seems inflation may be transitionary as the fed promised. Consumer confidence, retail numbers, and the retail earnings reports this week all point to a possible pullback from high inflation in the second half of the year. With the low prices for growth stocks, compared to 52-week highs, an all-clear signal could come with quite a rally as Investors rotate from value into growth. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Despite the gains this week, volume was lower, suggesting that big institutions are not yet accumulating. That means the brief rally for growth stocks could be short-lived. The big mega-caps did not benefit from the rally, and several met resistance at their 10w moving average lines and remained below the critical level. Wednesday may have been met with relief by investors, but sensitivity to inflation and any reaction from the Fed remains. If the infrastructure bill finds support with republicans, we can also expect rotation back into cyclical sectors that will benefit from the extra spending. The demand for commodities will drive prices higher and potentially cause more inflation. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq closed the week below the critical 21d EMA and 50d MA lines. The index climbed to 13,600 this week before hitting resistance and closing lower on Friday. Note the similarity to late February and early March when the index found support at 13,000, then resistance at 13,600 and dipped lower than 13,000 in the next several days. That's what I'll be watching for this week, hoping we head back to 14,000 instead. On the positive side, the levels are: The 21d EMA is at 13,525.47. The 50d MA is at 13,578.31. There is a resistance area between 13,600 and 13,700. The high of this past week was 13,616.58. The rally attempt of the previous week went to 13,828.62. Get above this level to end the sequence of lower highs. 14,000 has been a key area of support/resistance. The index has only stayed above this level for a few days at a time since the beginning of 2021. The all-time high is at 14,211.57 is the all-time high. On the downside, there are a few key levels: The 10d MA is at 13,336.71. The low of this past week is 13,072.23. That low is just above the 13,000 support line. 12,786.81 is a low pivot point from the late March dip. Stay above this low to keep an upward trend since early March. 12,543.86 is the 200d MA. This could be a support point if the index falls below 13,000. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up I am still waiting for the Nasdaq to show some solid support from institutional investors. It's going to require broad gains, including mega-caps, mid-caps, and small-caps, on higher volume to get the index moving in an uptrend. That kind of support is necessary to carry many of the influential stocks past resistance areas. There is a good possibility that the index will move lower before a new uptrend occurs. That's not necessarily a bad thing if the index moves lower first, and we can end the months of sideways chop that tests a growth investor's endurance. Then after finding a solid bottom, the index and big tech and growth can have at least a few weeks of solid gains. Watch out for progress on the infrastructure bill and any more hints at inflation worries as potential catalysts to the downside. Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
3
Market Week in Review - 5/10/2021 - 5/14/2021Summary: The focus was all on inflation this week. The updated consumer price index numbers were due on Wednesday, and investors entered the week expected the worst. On top of inflation, an oil pipeline closure on the east coast meant even more upward price pressure for consumers. Monday started the week with a terrible-looking marubozu candle which has no upper or lower wick. Prices went straight down from open to close. Utilities was the leading sector as investors took defensive positions. Five stocks declined for every advancing stock. Notes The 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. I occasionally have some errors or typos and will correct them in my blog or 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 Meaning of Life." If not, then this first part is a great play-by-play recap for the week. Click the daily charts for more detail on sectors, indexes, and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, May 10, 2021 Facts: -2.55%, Volume higher, Closing range: 0%, Body: 100% Good: Nothing Bad: All red body, selling from open to close with a failed rally of the 50d MA Highs/Lows: Lower high, lower low Candle: Marubozu red, no upper or lower wick Advance/Decline: Two declining stocks for every advancing stock Indexes: SPX (+0.74%), DJI (+0.66%), RUT (+1.35%), VIX (-9.24%) Sectors: Utilities (XLU +1.01%) and Consumer Staples (XLP +0.76%) were top. Communications (XLC -1.92%) and Technology (XLK -2.52%). Expectation: Lower Inflation looms over big tech and growth stocks like an approaching hurricane, keeping investors wondering when and how big it will hit. Last week's jobs data supported the government's case that there is still support needed for economic recovery and that inflation is transitionary. But a shutdown oil pipeline over the weekend has investors worried. And the future updates on consumer and producer price index data are causing them to take a cautious stance. The result was a big hit to big tech and growth stocks as the Nasdaq closed with a -2.55% decline on higher volume. The ominous marubozu candle has no upper and lower wick. It is 100% red body with a 0% closing range. This high of the day was the open, and the low of the day was the close. There was a brief rally as the index hit the 50d moving average, but it was short-lived and failed to send the index below the key support line. Five stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, May 11, 2021 Facts: -0.09%, Volume lower, Closing range: 89%, Body: 87% Good: Solid green body as bulls take over after gap down Bad: Lower high, lower low, lower close Highs/Lows: Lower high, lower low Candle: Thick green body with short upper wick and high closing range Advance/Decline: Two declining stocks for every advancing stock Indexes: SPX (-0.87%), DJI (-1.36%), RUT (-0.26%), VIX (+11.09%) Sectors: Materials (XLB +0.33%) and Communications (XLC -0.29%) were top. Financials (XLF -1.77%) and Energy (XLE -2.57%) were bottom. Expectation: Sideways or Lower A gap down must have shocked the bulls into action as the major indices crawled their way back up from morning lows. The results show a rotation happened underneath a market sell-off. Growth stocks benefited from the rotation, while the broader market had more than two declining stocks for every advancing stock. The Nasdaq closed down -0.09% on lower volume. Despite a thick green-bodied candle, the lower high, lower low, and lower close continue a downtrend that's in its ninth day. The body covers 87% of the candle with a closing range of 89% under a thin upper wick. Two stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, May 12, 2021 Facts: -2.67%, Volume lower, Closing range: 10%, Body: 64% Good: Nothing Bad: Lower high, lower low, lower close, all day selling Highs/Lows: Lower high, lower low Candle: Longer upper wick over a tick red body, tiny lower wick Advance/Decline: Five declining stocks for every advancing stock Indexes: SPX (-2.14%), DJI (-1.99%), RUT (-3.26%), VIX (+26.33%) Sectors: Energy (XLE +0.48%) and Health (XLV -0.94%) were top. Technology (XLK -2.81%) and Consumer Discretionary (XLY -3.39%) were bottom. Expectation: Sideways or Lower Consumer price index data was higher than expected, which is excellent for the US dollar, but sent investors into a selling frenzy as they reacted to higher inflation and the possibility of higher interest rates. It's a conflicting mix of being glad the economy is recovering and trying to price in the impact to valuations and potential reactions by the Fed to an overheated economy. The Nasdaq closed down -2.67% on the fourth day in a row of lower highs, lower lows, and lower closes. The closing range of 10% comes underneath a 64% red body, and a long upper wick formed in a quick but short-lived rebound at open. The selling pressure existed throughout the day as five stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, May 13, 2021 Facts: +0.72%, Volume lower, Closing range: 49%, Body: 11% Good: Higher close, support at 13,000 Bad: Negative red body, indecisive after swings up and down intraday on lower volume Highs/Lows: Lower high, higher low Candle: Spinning top, inside day with a thin red body and long upper and lower wicks Advance/Decline: More declining stocks than advancing stocks Indexes: SPX (+1.22%), DJI (+1.29%), RUT (+1.68%), VIX (-16.17%) Sectors: Utilities (+1.93%) and Industrial (XLI +1.87%) were top. Consumer Discretionary (XLY +0.71%) and Energy (XLE -1.22%) were bottom. Expectation: Sideways or Lower Buy the dip? That seems to be what drove prices higher today on optimism after a positive jobs report. But caution is still in the market with Utilities as the leading sector, growth stocks essentially not participating, and an advance/decline ratio still below 1.0. The Nasdaq closed higher but on lower volume, advancing +0.72% for the day. The indecisive candle has a thin red body nearly in the middle of the long upper and lower wicks. The closing range is 49%, with a narrow 11% red body. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, May 14, 2021 Facts: +2.32%, Volume lower, Closing range: 86%, Body: 80% Good: Higher high, higher low, buying all day until just before close Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Thick green body under a small upper wick. Tiny lower wick. Advanced/Decline: More than three advancing stocks for every declining stock Indexes: SPX (+1.49%), DJI (+1.06%), RUT (+2.47%), VIX (-18.68%) Sectors: Energy (XLE +3.10%) and Technology (XLK +2.20%) were top. Utilities (XLU +0.49%) and Consumer Staples (XLP +0.44%) were bottom. Expectation: Sideways or Higher A lighter volume but positive day followed lower than expected economic indicators, including Retail Sales and Consumer Sentiment. Perhaps the economic recovery is pausing as consumers react to the increases in prices. A little water on the fire could be good news to investors who are afraid things are overheating. The Nasdaq closed with a +2.32% advance on lower volume. The thick green body over a tiny lower wick represents the buying throughout the day. A short upper wick came in the last hour of trading as investors took profits heading into the weekend. There were more than three advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The focus was all on inflation this week. The updated consumer price index numbers were due on Wednesday, and investors entered the week expected the worst. On top of inflation, an oil pipeline closure on the east coast meant even more upward price pressure for consumers. Monday started the week with a terrible-looking marubozu candle which has no upper or lower wick. Prices went straight down from open to close. Utilities was the leading sector as investors took defensive positions. Five stocks declined for every advancing stock. Tuesday opened with a gap down and then a seemingly bullish day as the index climbed back to the previous day's close. What most likely happened was many shorts taking profits. Just as a gap up is usually following by profit-taking on long positions, a gap down will often cause shorts to buy back stocks to cover their positions and take profits. The exceptional performance of highly shorted growth stocks on Tuesday is evidence of the profit-taking. Wednesday was inflation day. The consumer price index grew higher than expected, and it sent investors into a frenzy, causing the index to dip once more. For the second day this week, five stocks declined for every advancing stock. As expected, the producer price index also came in higher than analyst expectations. But it seemed not as much of a surprise, and the index found a support level at 13,000, tested it mid-day, and then closed near the open. The inside day showed an indecisive market with reactions to better employment numbers, mixed with nervousness around the inflation impact. Utilities led the sector list again. Then on Friday, an interesting thing happened. Economic data was worse than expected. Retail sales data for April went down instead of up, and Consumer Sentiment for May was lower than expected. But it seemed investors loved the news. It could be that inflation truly is temporary, as the Fed has been saying. Or at least it supported the idea that there is still more time needed before declaring a win for the economic recovery. www.tradingview.com The Nasdaq declined -2.34% for the week. The closing range of 62% shows the recovery on Thursday and Friday, bringing the index back into the upper half of the trading range. The candle is nearly identical to the previous week's candle, which had a similar sell-off in the first half of the week with some support in the latter part of the week. All four major indices we track declined for the week. The Dow Jones Industrial Average (DJI) fell -1.14%. The S&P 500 (SPX) lost -1.39%. The Russell 2000 (RUT) dropped -2.07% but was down over 6% in the middle of the week. The VIX volatility index spiked +73.34% during the week but ended the week with just a +12.7% gain. It was a mix of defensive and cyclical stocks that led the sector list this week. Only three sectors ended the week with gains, while the high growth sectors took the most significant declines. Consumer Staples ( XLP ) topped the list, with Utilities ( XLU ) in fourth place. Both are defensive sectors for investors. Real Estate ( XLRE ) was lower in the list but still outperformed the sectors. Financials ( XLF ) and Materials ( XLB ) joined Consumer Staples as the only sectors to end the week with gains. Technology ( XLK ) and Consumer Discretionary ( XLY ) were at the bottom of the list. Both contain high growth companies that are likely to be impacted by inflation and potential increases in interest rates. They started to recovery on Thursday and Friday after the US Dollar and Treasury interest rates dropped. The US Treasury 30y, 10y, and 2y yields all rose for the week. The spreads widened a bit between long and short-term yields. Both the High Yield Corporate Bond (HYG) prices and Investment Grade Bond (LQD) prices declined sharply in the middle of the week but recovered to end the week with a small loss. The US Dollar (DXY) rose +0.67% on Wednesday but then retreated, ending the week with a +0.08% advance. Silver (SILVER) declined -0.10% while Gold (GOLD) advanced +0.60%. Crude Oil (CRUDEOIL1!) advanced +0.48%. The material commodities pulled back from record highs. Timber (WOOD) declined -2.81%. Copper (COPPER1!) declined -1.71%. Aluminum (ALI1!) declined -3.11%. Investors seemed to rotate back and forth between growth and value this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The big four mega-caps continued to slide this week but outperformed the Nasdaq overall. Microsoft (MSFT) dipped below the 10w MA but closed above the line, losing only -1.71% for the week. Amazon (AMZN) lost -2.09%, closing below its 10w MA line. Apple (AAPL) dipped below its 10w and 40w MA but ended above both, closing the week with a -2.12% loss. Alphabet (GOOGL) was the only of the four to underperform the index, declining -3.13%. However, Alphabet stayed above the 10w moving average line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. The results were mixed this week. Carnival Cruise Lines (CCL) gained +1.64% but remained below its 10w MA line after a weekly lower high and lower low. Delta Airlines (DAL) had a similar pattern but advanced only +0.43%. Marriot (MAR) declined -2.32%. Exxon Mobile (XOM) led energy stocks lower for the week, closing with a -2.66% weekly loss. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Cryptocurrency I'll start tracking four major cryptocurrencies on the week in review. The four are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The latter two are not the largest by market cap but seem to be well-known and are part of the CIX capital.com index, which is tracking five cryptocurrencies, including these four (Ripple is the fifth). Nothing to note at the moment other than Bitcoin is bouncing between 60,000 and support at around 49,000. Ethereum is pulling back slightly from a 70% rally over the past two weeks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) rose this week to its highest daily level since November. It recovered by the end of the week to end at 0.658. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed index is on the fear side but not yet approaching extreme fear. The NAAIM money manager exposure index is at 46.86 after moving above 100 two weeks ago. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday The week will open with Manufacturing data on Monday morning. Several FOMC members will speak after the market opens. Tencent Music (TME), Niu Tech (NIU), Desktop Metal (DM), Fisker (FSR), Riot Blockchain (RIOT) will report earnings on Monday. Tuesday Building Permits and Housing Starts data will release on Tuesday. API Weekly Crude Oil Stock data will update after market close. Earnings releases will include Walmart (WMT), Home Depot (HD), Sea (SE), Baidu (BIDU), Trip.com (TCOM), and Macy's (M). Wednesday Crude Oil Inventories get an update on Wednesday. In the afternoon, FOMC member Bostic speaks, and the FOMC Meeting Minutes will be released. Investors will look closely for wording that shows concern over inflation and any hints toward monetary policy changes. Cisco (CSCO), Lowe's (LOW), JD.com (JD), Target (TGT), TJX (TJX), Synopsys (SNPS), Vipshop (VIPS), and FUTU Holdings (FUTU) report earnings. Thursday Initial Jobless Claims and the Philadelphia Fed Manufacturing Index data will be released Thursday. Earnings Reports include Tencent (TCEHY), Applied Materials (AMAT), Ross Stores (ROST), and Deckers Outdoor (DECK). Friday On Friday morning, the Purchasing Manager Index data for Services and Manufacturing will be released just aftermarket open. The data shows an expected increase/decrease in activity to meet customer demand in the two sectors. Existing Home Sales will also be released after the market opens. Deere & Company (DE), Foot Locker (FL), and Buckle (BKE) are on the shortlist of earnings reports for Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Now that investors have a complete picture of inflation for the month, they can focus on other data points. They can focus on which sectors are performing well and which stocks have had good earnings results and show additional growth this year. The lower-than-expected retail sales and consumer sentiment data on Friday poured a little water on the fire burning around inflation. That will provide some relief for investors overly worried about the impact of inflation and the prospect for higher interest rates. As the dollar came back down in value after spiking on Wednesday, big tech and growth stocks found support and healthy gains. As the value trade deflates on lower retail and consumer sentiment data, growth stocks could benefit, boosting the Nasdaq. The could accelerate if investors decide now is the time to buy these stocks at a reduced price. The Fed is still on our side. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The index lost several key support levels this past week and has much to prove before investor confidence returns. The put/call ratio remains higher than in recent months, showing investors are nervous about what's to come. That nervousness could mean we have not hit the bottom of this pull-back yet. The increases in the index this past week came on lower volume. That could be because the gains were mainly coming from shorts covering positions vs. an actual bullish rally. If so, the support could be weak, and another leg lower may be in store. The Fed can flip sides at any time. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq dropped below the 50d MA and found support at the 13,000 level. That 13,000 level is a crucial area to watch. On the positive side, the levels are: The 10d MA moved below the 21d EMA and 50d MA, marking the sudden drop. It's currently at 13,487.41 and the first critical level to reach. The 50d MA is at 13,539.94. The 21d EMA is at 13,598.43. The high of this past week was 13,687.93. The rally attempt of the previous week went to 13,828.62. Get above this level to end the sequence of lower highs. 14,000 has been a key area of support/resistance. The index has only stayed above this level for a few days at a time since the beginning of 2021. The all-time high is at 14,211.57 is the all-time high. On the downside, there are a few key levels: The low of this past week is 13,002.54. That low is just above the 13,000 support line. 12,786.81 is a low pivot point from the late March dip. Stay above this low to keep an upward trend since early March. 12,479.80 is the 200d MA. 12,397.05 is a low pivot point from the early March dip. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The inflation storm hit this week, and it was a rough ride for growth investors. Thankfully, we found some support on Thursday and Friday and hope that the bulls are coming back in to buy stocks at a discount. The big question is whether all the news on an overheating economy is baked in now and the market will start to make another leg up. Or will the economic data continue to shake investors out of equities? Good luck, stay healthy, and trade safe!
NASDAQ:IXIC
by drewby4321
4
Market Week in Review - 5/3/2021 - 5/7/2021 Summary: The market is the great fortune teller, always trying to price in the future, not the present. We saw that in action this week in several ways. The first was with Janet Yellen's comments on Tuesday that interest rate hikes might be needed in the future. That sent investors into a frenzy sell-off before she walked back the comments. Notes The 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. 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 daily charts for more detail on sectors, indexes and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, May 3, 2021 Facts: -0.48%, Volume lower, Closing range: 8%, Body: 85% Good: Held above the 21d EMA Bad: Lower high, lower low, could not stay above 14,000 Highs/Lows: Lower high, lower low Candle: Thick red body with small upper and lower wicks Advance/Decline: Slightly more declining stocks than advancing stocks Indexes: SPX (+0.27%), DJI (+0.70%), RUT (+0.49%%), VIX (-1.61%) Sectors: Energy (XLE +2.75%) and Materials (XLB +1.49%) were top sectors. Communications (XLC -0.53%) and Real Estate (XLRE -0.54%) were bottom. Expectation: Sideways or Lower The cyclical sectors soared. The others did not. A rotation into reopening and cyclical stocks played well for all the major indexes except the Nasdaq which is heavy in big-tech and growth stocks. The Nasdaq closed down -0.48% on lower volume. A brief rally attempt in the morning brought the index above 14,000 before selling off and testing the 21d EMA several times before closing just above the intraday lows. The thick red body covers 85% of the candle is surrounded by a short upper and lower wick with a closing range of 8%. There were slightly more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, May 4, 2021 Facts: -1.88%, Volume higher, Closing range: 37% (w/gap), Body: 45% Good: Bounced off 50d moving average line Bad: Gap down on news, high volume distribution Highs/Lows: Lower high, lower low Candle: Thick red body in upper half of candle, long lower wick Advance/Decline: Almost four declining stocks for every advancing stock Indexes: SPX (-0.67%), DJI (+0.06%), RUT (-1.28%), VIX (+6.39%) Sectors: Materials (+1.09%) and Financials (XLF +0.80%) were top. Consumer Discretionary (XLY -1.04%) and Technology (XLK -1.79%) were bottom. Expectation: Sideways or Lower The market sold off sharply at open after comments from Janet Yellen suggested that interest rates might need to increase to keep the economy from overheating. Investors fled sectors more sensitive to interest rate hikes and rotated into the cyclical sectors. The Nasdaq opened with a gap-down and closed the day with a -1.88% decline on much higher volume. The index continued to decline after open until it hit the 50d moving average and found support through the afternoon. The result is a long lower wick underneath a 45% red body and a 37% closing range, considering the gap as part of the range. There were nearly four declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, May 5, 2021 Facts: -0.39%, Volume lower, Closing range: 13%, Body: 76% Good: Lower than average volume Bad: Lower high, thick red body from afternoon decline Highs/Lows: Lower high, higher low Candle: Inside day, thick red body with similar small upper and lower wicks Advance/Decline: Two declining stocks for every advancing stock Indexes: SPX (-0.37%), DJI (+0.29%), RUT (-0.31%), VIX (-1.69%) Sectors: Energy (XLE +3.23%) and Materials (XLB +1.27%) were top. Real Estate (XLRE -1.47%) and Utilities (XLU -1.69%) were bottom. Expectation: Sideways or Lower This is not the rally we are looking for. The Dow Jones Industrial average closed at a record high today while the rest of the market struggled to hold any gains, with the Nasdaq and Russell 2000 falling further behind the other major indexes. The Nasdaq closed with a -0.39% loss for the day on lower than average volume. The 13% closing range is under a 76% body with a short lower wick created from a late afternoon dip. The short upper wick was formed just after open before the bears took over. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, May 6, 2021 Facts: +0.37%, Volume higher, Closing range: 99%, Body: 38% Good: High closing range with gain on higher volume Bad: Lower low with dip below 50d moving average Highs/Lows: Lower high, lower low Candle: Hammer with long lower wick and smaller body in upper half of candle Advance/Decline: Almost three declining stocks for every advancing stock Indexes: SPX (+0.82%), DJI (+0.93%), RUT (+0.00%), VIX (-3.97%) Sectors: Financials (XLF +1.49%) and Consumer Staples (XLP +1.29%) were top. Consumer Discretionary (XLY -0.22%) and Health (XLV -0.13%) were bottom. Expectation: Sideways or Higher Another record was set for the Dow Jones Industrial average while value stocks continue to outpace growth stocks. Two intraday rallies might just be the action the Nasdaq needed to join the rally, but the gains were mostly isolated to the mega-caps. The Nasdaq closed with a +0.37% gain on higher volume. The mid-day rallies formed a long lower wick with a smaller 38% green body in the upper half of the candle, forming a hammer. A hammer can signal a trend reversal but needs to be confirmed the following day. The closing range of 99% comes after a rally late in the afternoon. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, May 7, 2021 Facts: +0.88%, Volume lower, Closing range: 60% (w/gap), Body: 21% Good: Higher close, higher high, higher low, confirmation of yesterday's hammer Bad: Lower volume, gap-up may need revisiting Highs/Lows: Higher high, higher low Candle: Longer upper wick over a thin green body in lower half of candle, gap-up at open Advance/Decline: About three gaining stocks for every declining stock Indexes: SPX (+0.74%), DJI (+0.66%), RUT (+1.35%), VIX (-9.24%) Sectors: Energy (XLE +1.78%) and Real Estate (XLRE +1.22%) were top. Utilities (XLU +0.30%) and Consumer Staples (+0.00%) were bottom. Expectation: Sideways or Higher More records were set as the S&P 500 and Dow Jones Industrial average both had record closes while the Nasdaq and Russell 2000 joined the rally, also making gains. Employment data in the morning caused the dollar to fall which can give a boost to mega-caps and growth stocks. The Nasdaq closed with a +0.88% gain. Volume was lower and the morning rally faded through the day, giving the candle a 60% closing range (including the gap) and a thin 21% body under a long upper wick. Nonetheless, the positive gain with a higher high and higher low is a confirmation of the previous day's reversal hammer candle. There were three gaining stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The market is the great fortune teller, always trying to price in the future, not the present. We saw that in action this week in several ways. The first was with Janet Yellen's comments on Tuesday that interest rate hikes might be needed in the future. That sent investors into a frenzy sell-off before she walked back the comments. The second indication of future focus was that investors were much more focused on the guidance in earning reports than they were on the current results. Earning reports that beat expectations, but lowered or kept guidance the same were punished. Earnings reports that didn't meet expectations, but could provide higher guidance were rewarded. But possibly the biggest indication is the rotation from the growth stocks of the past year, to the value re-opening and infrastructure stocks of this year. While the Dow Jones industrial average (DJI) and S&P 500 (SPX) were setting new records, the Nasdaq (IXIC) was still dropping, dipping below its 50d MA before finding any support. It was nearly the same for small-caps and the Russell 2000 (RUT). Thursday was the pivot day for both the Nasdaq and RUT, with long lower wicks and high closing ranges. The rally continued into Friday and provides some optimism for possible continuation into next week. But there is still a lot of rebuilding to do across both indexes. Many leading stocks will face overhead supply resistance as they move back toward new highs. While the two lagging indexes attempt to rally back to new highs, expect investors to stay hyper-focused on inflation and any responses from the Fed. Changes in monetary policy will be met with a swift reaction. The Nasdaq declined -1.51% for the week, ending the week in the middle of the range with a 52% closing range. Volume was lower than the previous week, with much of the volume focused on Tuesday's sell-off and Thursday's mid-day bounce. The Dow Jones Industrial average (DJI) didn't have a single declining day during the week and advanced +2.67% over the five days. The S&P 500 (SPX) gained +1.23% for the week. The Russell 2000 (RUT) gained +0.23% after taking a round trip below its 21d EMA and 50d MA but closing just above where it opened for the week. The VIX volatility index declined -10.32% for the week. It was the cyclical sectors that ruled the week. Energy ( XLE ), Materials ( XLB ), Financials ( XLF ) and Industrials ( XLI ) were the top four sectors of the week. The cyclical sectors are benefiting from a pick-up in economic activity driving demand for products from building materials, infrastructure and the manufacturing of consumables. Supply has not been able to keep up with the increased demand, driving commodity prices higher. Timber, Copper , Aluminum are all skyrocketing. And demand for oil is increasing as transportation picks back up. While the Dow Jones Industrial average (DJI) and S&P 500 (SPX) hit new all-time records, there were four sectors that lost for the week. Technology ( XLK ) and Consumer Discretionary ( XLY ) fell on Monday thru Wednesday along with the Nasdaq, as investors rotated to re-opening and infrastructure stocks. Real Estate ( XLRE ) and Utilities ( XLU ) were the bottom two sectors. Investors did not have interest in the defensive equity plays this week. Investors remain confident in the equities market, but are playing toward value, re-opening and infrastructure. The US Treasury 30y, 10y and 2y yields all declined for the week, continuing to flatten the yield curve since its sharpest point in March. Both the High Yield Corporate Bond (HYG) prices declined slightly while Investment Grade Bond (LQD) prices advanced. The US Dollar (DXY) declined -1.17% for the week, resting just above a support area from 2018. Commodities, especially the resources required for recovery, continue to reach new historic high prices. Silver (SILVER) and Gold (GOLD) advanced +5.94% and +3.53% for the week. Crude Oil (CRUDEOIL1!) advanced +0.85%. Timber (WOOD) advanced +5.43%. Copper (COPPER1!) advanced +4.40% and Aluminum (ALI1!) advanced +5.90%, putting in the fifth week in a row of gains. This growth/value comparison we've been tracking is showing the big rotation back into value over the past week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The big four mega-caps were looking a little ugly on the daily charts this past two weeks. But it's always important to take a broader look at the weekly, and although not great, it doesn't look so bad either. Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN) all touched their 10e moving average lines, found support and closed above them. Microsoft was even able to get a slight gain for the week, advancing +0.11%. Apple (AAPL) was down -0.95%. Amazon (AMZN) had the biggest loss of -5.07%, but still stayed above the key moving average line. Alphabet (GOGL) had a dip but recovered, closing just -0.07% from where it opened the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Exxon Mobile (XOM) had a huge gain this week, advancing +9.07%. However, my other recovery stocks are all down. Delta Airlines (DAL) lost -1.74%. Marriott (MAR) declined -1.23%. Carnival Cruise Lines (CCL) lost -4.29%. So the focus on re-opening stocks may be more about the infrastructure plays and manufacturing goods required to meet increasing consumer demands. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) closed the week at 0.650, a little lower from the previous week, but was up and down throughout the week. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed index is on the greed side but not far off neutral. The NAAIM money manager exposure index declined to 87.79, after topping 100 last week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead There are still a high number of earnings reports, so keep an eye on your portfolio so you are not surprised. Monday There is not much significant economic news scheduled for Monday. JD.com (JD), Marriott (MAR), Roblox (RBLX), Trade Desk (TTD), Trex (TREX), Magnite (MGNI) and VUZIX (VUZI) are a few of the interesting earnings reports for Monday. Tuesday On Tuesday, we will get the Monthly OPEC Report and the EIA Shot-Term Energy Outlook. The JOLTS Job Openings report for March will be released just after market open. FOMC Members are scheduled to speak throughout the day. There's also a 3y note-auction which is not quite as important as the 10y, but may be viewed as a preview for the longer term auction performance. Earnings releases will include Electronic Arts (EA), Palantir (PLTR), Unity Software (U), Quantumscape (QS), Plug Power (PLUG), Upstart (UPST), Lemonade (LMND), Open Lending (LPRO), Selectquote (SLQT), Wednesday Consumer Price Index data for April will be released on Wednesday. An indicator of inflation, the numbers will be watched closely. Crude Oil Inventories will be updated in the morning after market open. The 10y treasure note auction will be in the afternoon. Toyota Motor (TM) along with a large number of Japanese company earnings reports will be released on Wednesday. Some other interesting reports will include Dynatrace (DT) and Bumble (BMBL). Thursday The weekly update on Jobless Claims comes on Thursday. Also Produce Price Index data will be released in the morning. Earnings Reports include Alibaba (BABA), Walt Disney (DIS), AirBnB (ABNB), Coinbase (COIN), DoorDash (DASH), Farfetch (FTCH), Celsius (CELH), and DermTech (DMTK). Friday Friday brings an update to Core Retail Sales for April. Export/Import Price Index data will also be released. Closer to open, the Industrial Production and Business Inventories data will be released. Consumer Expectations and Consumer Sentiment numbers for May will come after the market open. Another large round of Japanese earnings reports come on Friday. UP fintech (TIGR) is also schedule to report on Friday. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Although there is caution in the market at all-time highs for two of the major indexes, there is a switch from previous weeks where Utilities and Real Estate were leading sectors, back to less cautious sectors. And although investors are still playing the value trade against the growth trade, we saw a growth and tech to start to play in the rally on Thursday as well. It's also very possible based on data available from banks, that hedge funds have been short selling the growth play which has forced prices even lower. The data says the increasing amount of shorts are coming via ETFs, which in light of the GameStop frenzy, seems to be the safer way to play the short side for now. But if the Nasdaq and the passive indexes start to rally, the hedgefunds will need to cover shorts nonetheless, possibly unlocking a short squeeze at a broader level. As the long as the fed keeps monetary policy, the market will continue to be propped up and any short-sell plays will eventually hit their limit and the buying has to begin again. Let's see. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side We've just had several weeks of first quarter earnings reports that beat the previous year, but shared lower guidance for the coming quarters. Many of those companies were driving the market to historical gains over the past year. Now that Q2 has arrived, the year-over-year comparable earnings will get much tougher. That's going to mean more downside for companies that are driving the high prices in the market. Still, as the economic recovery picks up more steam, investors worry over inflation and interest rates will increase as well. Any small statement like we saw from Yellen this past week could send investors for the exits. And if we actually see a response from the Fed that would touch monetary policy, it will certainly mean a taper tantrum if not done carefully. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq found itself below the 21d EMA again this week, but found support at the bottom of the channel from the March 2020 lows. That channel remains intact and the index closed above the 50d MA despite the dip. On the positive side, the levels are: The 21d EMA is at 13,797.33 and is a key level for the index to rise above. The 10d MA is at 13,882.14. 14,000 has been a key area of support/resistance. The index has only stayed above this level for a few days at a time since the beginning of 2021. This past weeks high is 14,042.12. The all-time high is at 14,211.57 is the all-time high and the high of this week. 14,923 is the middle line of the channel from the March 2020 bottom. The index has been in the channel, but below the midline for the past ten weeks. On the downside, there are a few key levels: A previous support area is around 13,600. The lower line of the channel from the March 2020 bottom is around 13,563 for next week. The 50d MA is is at 13,529.61 and is an important line to stay above. The low of this past week is 13,439.39. Let's get a higher low for next week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up If you are a growth investor, it was probably a pretty tough week for your portfolio. Investors were focused on the value play and there was a ton of selling pressure for growth early in the week. But as the Dow Jones Industrial average and S&P 500 close the week at all-time highs, it could be just the right time to take profits and rotate them back into growth stocks. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 4/26/2021 - 4/30/2021 Summary: The week began with continued momentum from the end of the previous week as investors speculated ahead of earnings reports from the biggest most influential companies in the market. Those companies gained on Monday as investors became more bullish, sending the put/call ratio to an overly bullish level. The result was that much of the positive earnings reports were already priced into the market, setting expectations even higher. Notes The 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. 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 daily charts for more detail on sectors, indexes and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, April 26, 2021 Facts: +0.87%, Volume higher, Closing range: 89%, Body: 64% Good: Move up on higher volume and broadly shared gains Bad: Nothing Highs/Lows: Higher high, higher low Candle: Longer lower wick from dip at open, short upper wick after testing new high Advance/Decline: Three advancing stocks for every two declining stocks Indexes: SPX (+0.18%), DJI (-0.18%), RUT (+1.15%), VIX (+1.79%) Sectors: Energy (XLE +0.67%) and Materials (XLB +0.59%) were top. Utilities (XLU -0.57%) and Consumer Staples (XLP -1.12%) were bottom. Expectation: Higher Momentum from the end of last week continued into Monday as markets open the week higher and the S&P 500 and Nasdaq set new records. There are some signs that investors are rotating out of safe bets and buying up speculative positions ahead of earnings reports. The Nasdaq had a record-setting close, ending the with a +0.87% gain and fell just shy of setting a new all-time high price. Volume was higher and advancing stocks outnumbered declining stocks, great bullish signals for the rally. The closing range of 89% comes after a small dip before close. A longer lower wick was created by a dip just after open before the bulls quickly took over. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, April 27, 2021 Facts: -0.34%, Volume higher, Closing range: 24%, Body: 75% Good: Higher high, higher low Bad: Gap up at open, but couldn't hold on, distribution day on higher volume Highs/Lows: Higher high, higher low Candle: No upper wick, thick red body with a short lower wick Advance/Decline: Two declining stocks for each advancing stock Indexes: SPX (-0.02%), DJI (+0.01%), RUT (+0.14%), VIX (-0.45%) Sectors: Energy (XLE +1.21%) and Industrials (XLI +0.83%) were top. Health (XLV -0.58%) and Utilities (XLU -0.77%) were bottom. Expectation: Sideways The Nasdaq opened with a gap up but couldn't hold on, selling off briskly in the morning along with the other major indexes. Eventually positive consumer confidence numbers and continued growing demand outlook from OPEC helped the markets to settle down and end the day with a relatively small pull back overall. The Nasdaq closed with a -0.34% decline on higher volume. The distribution day resulted in a 75% red body that ended with a 25% closing range. A small lower wick was formed in the morning before the index found support above 14,000. The higher high and higher low continue an uptrend since last Wednesday. There were two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, April 28, 2021 Facts: -0.28%, Volume lower, Closing range: 17%, Body: 32% Good: Lower volume, sideways movement, with support above 14,000 Bad: Lower high and lower low with a low closing range Highs/Lows: Lower high, lower low Candle: Long upper wick above a small red body and low closing range Advance/Decline: Just slightly more declining stocks than advancing stocks Indexes: SPX (-0.08%), DJI (-0.48%), RUT (+0.13%), VIX (-1.59%) Sectors: Energy (XLE +3.45%) and Communications (XLC +0.92%) were top. Real Estate (XLRE -0.35%) and Technology (XLK -0.93%) Expectation: Sideways or Higher The market attempted to rally a few times today but came back to rest at intraday lows. The good news is those lows seemed to be support areas that the bears could not bust below. The two intraday rallies came in the morning and afternoon, the first possibly on earnings reactions and the second on no surprises from the FOMC press conference. The Nasdaq closed with a -0.28% loss in a day after testing and getting support around 14,050 three times. The long upper wick was formed from the morning and afternoon rally. The small 32% red body rests in the bottom of the candle above a 17% closing range and a small lower wick. Volume was lower for the day and there were just slightly more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, April 29, 2021 Facts: +0.22%, Volume higher, Closing range: 50%, Body: 47% Good: New all-time high, higher volume, recovery from morning selling in afternoon Bad: Couldn't hold the high, lower low Highs/Lows: Higher high, lower low Candle: Outside day, long lower wick with a thick red body in upper half of candle Advance/Decline: Just slightly more declining stocks than advancing stocks Indexes: SPX (+0.68%), DJI (+0.71%), RUT (-0.38%), VIX (+1.91%) Sectors: Communications (XLC +2.77%) and Financial (XLF +1.78%) were top. Technology (XLK -0.08%) and Health (XLV -0.40%) were bottom. Expectation: Sideways or Higher We got higher, we got lower and we got sideways. It was a whiplash day for the markets that saw record highs be broken right before a painful morning sell-off. Then the afternoon rally brought most of the major indexes back into positive territory and left the S&P 500 at another all-time record close. The Nasdaq ended the day with a +0.22% gain, a close that is within the highs and lows of the week, marking a sideways move. Volume was higher as the morning high set a record for the index, before selling off to a morning low which is also a low for the week. Finally in the afternoon, the index climbed back to the positive, leaving us with a long lower wick underneath a 47% red body and 50% closing range. There were nearly two declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, April 30, 2021 Facts: -0.85%, Volume lower, Closing range: 15%, Body: 6% Good: Not much Bad: Failed rally in the morning, newer low in the afternoon Highs/Lows: Lower high, lower low Candle: Long upper wick and thin red body show the failed morning rally Advance/Decline: Three declining stocks for every advancing stock Indexes: SPX (-0.72%), DJI (-0.54%), RUT (-1.26%), VIX (+5.68%) Sectors: Utilities (XLU +0.79%) and Real Estate (XLRE +0.66%) were top sectors. Technology (XLK -1.36%) and Energy (XLE -2.53%) were bottom. Expectation: Lower It was not a great end to the month of April, with a failed rally in the morning that turned into lower lows in the afternoon. Investors are watching economic data closely, especially focused on measures of inflation driving expectations for an overheated economy. The Nasdaq closed the last day of April with a -0.85% decline on lower volume. The 6% body under a long upper wick and 15% closing range are the result of a morning rally attempt that faded quickly and turned into lower lows at the end of the day. The index was able to close just above the intraday low. Three stocks declined for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The week began with continued momentum from the end of the previous week as investors speculated ahead of earnings reports from the biggest most influential companies in the market. Those companies gained on Monday as investors became more bullish, sending the put/call ratio to an overly bullish level. The result was that much of the positive earnings reports were already priced into the market, setting expectations even higher. The first warning sign that the speculation may have fragile support was the reaction to Tesla's earnings report. Despite beating earnings and revenue estimates, the challenges faced by the company was too much for investors to remain positive even though none of those challenges were news. Next came a positive report by Microsoft, met with selling in after hours. AMD's positive report turned from gains in aftermarket to losses the next day. Apple and Amazon both turned gains into losses after positive reports. The only sector that was able to stay bullish was communications, with positive reports from Alphabet (GOOGL) and Facebook (FB) being met by investors with big gains. The two companies stand to benefit immensely from the increase in consumer activity as advertisers will increase spending to capture share of pocket books. The result was a choppy week for the indexes. The Nasdaq gapped up on Tuesday, but ended the day with losses. Those losses turned into more losses on Wednesday. Then a huge outside day hit on Thursday, setting a new all-time high for the index, but then dipping to the weekly low before ending the day with a small gain. Friday ended the week with another swing, but closing right where it opened. Small caps and the Russell 2000 (RUT) outperformed early in the week, but the rally ended after Wednesday and the index dropped on Thursday and Friday. With so many positive earnings reports, why the negative reaction in the market? Inflation. It's looming like Godzilla emerging from the ocean, meeting up with King Kong (the Fed) and fighting over future outlook. Inflation is a necessary part of the economy growing back to pre-pandemic levels. And the Fed says that the inflation will be transitionary and they expect it to drop back to around or below 2% by end of the year. But analysts aren't sure. They fear that Inflation will eventually cause the Fed to take action and rase interest rates. So in the meantime, inflation is going to often cause good economic news to be met with a negative nelly reaction from investors. That seems to have driven much of what we saw this week. The Nasdaq closed down -0.39% for the week on higher volume. The closing range was a dismal 8% with a small body sitting in the bottom half of the candle. The upper wick is formed from the attempted rallies on Tuesday and Thursday. The S&P 500 (SPX) gained +0.02% for the week. The Dow Jones Industrial average (DJI) lost -0.50%. The Russell 2000 (RUT) declined -0.24%. The Russell 2000 (RUT) gained +0.41% for the week thanks to a strong small cap performance late in the week. The S&P 500 lost -0.13% for the week. The Dow Jones Industrial average (DJI) declined -0.46%. The VIX volatility index rose +7.39% and is trending up the last two weeks. Energy ( XLE ) led the weekly sector list for the first time since the first week of March. The sector was helped by oil prices that rose on Tuesday and Wednesday, and positive earnings reports from Exxon Mobile and Chevron. Financials ( XLF ) and Communications ( XLC ) stocks solidified second and third place with strong opens on Thursday. Financials was boosted by positive earnings reports from Capital One and S&P Global . Communications got a big lift from Alphabet and Facebook , as advertising revenues soar amidst consumers getting back to spending. Despite several positive earnings reports in the sector, Technology ( XLK ) ended the week in last place. Investor outlook appears to be that these big tech companies will not continue the same amount of growth in the next few quarters, especially compared to the previous year's numbers. The US 30y treasury bond and US 10y treasury note yields both declined for the week. The US 2y note yield also declined. The yield curve is slightly steeper than the previous week, but spreads are still trending sideways for the past two months. Both the High Yield Corporate Bond (HYG) prices advanced while Investment Grade Bond (LQD) prices declined. The US Dollar (DXY) had its first gain after several weeks of declines. It advanced +0.51% this week. Silver (SILVER) and Gold (GOLD) declined -0.38% and -0.47% for the week. Crude Oil (CRUDEOIL1!) advanced +1.53%. Timber (WOOD) declined for another week, losing -0.70% Copper (COPPER1!) advanced +2.58% and Aluminum (ALI1!) advanced +1.71%. That's four weeks of advances for the two metals required for infrastructure and manufacturing activity. This growth/value comparison we've been tracking is starting to trend back in favor of value. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The big four mega-caps had mixed weeks. Amazon (AMZN) and Alphabet (GOOGL) ended the week with gains. Amazon advanced +3.79% for the week and Alphabet advanced +2.33%. Apple (AAPL) and Microsoft (MSFT) could not hold onto gains early in the week, despite both releasing positive earnings and revenue reports. Apple (AAPL) retreated -2.13% while Microsoft lost -3.43%. All big four mega-caps continue to trade above 10w and 40w moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. All four had gains this week. Marriott (MAR) had the smallest gain with a +0.11% advanced. Carnival Cruise Lines (CCL) and Delta Airlines (DAL) gained +2.53% and +2.45%. Exxon Mobil (XOM) exited the week with a +3.01% gain. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) closed the week at 0.790, showing a little more caution among investors. On Monday it was a 0.492, very bullish. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed index is on the greed side but not far off neutral. The NAAIM exposure index moved up to 103.72. That's the first time exposure moved above 100 since February. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday Monday will start the month of May with Manufacturing data, which should show growth in the sector given the other economic recovery data showing demand for goods. Earnings reports on Monday will include Alibaba (BABA), Estee Lauder (EL), Loews (LO), SolarEdge (SEDG), and Avis (CAR). Tuesday Tuesday will bring Exports, Imports and Trade Balance data before market open. Factory Orders data will be released after market open and API Weekly Crude Oil Stock levels will be released after market close. Tuesdays earnings reports will include Pfizer (PFE), T-Mobile (TMUS), CVS (CVS), Zillow (Z), Verisk (VRSK), LYFT (LYFT), Skillz (SKLZ). Wednesday ADP Nonfarm Employment data will be released on Wednesday morning. In addition, the purchasing manager indexes for Services and Non-Manufacturing sectors will be released after the market opens. Crude Oil Inventories will be updated in the morning as well. PayPal (PYPL), Uber (UBER), Boking (BKNG), General Motors (GM), MercadoLibre (MELI), Twilio (TWLO), Rocket (RKT), Hilton (HLT), Etsy (ETSY), HubSpot (HUBS), 10x Genomics (TXG), Qorvo (QRVO), Zynga (ZNGA), Fastly (FSLY), Redfin (RDFN), Palomar (PLMR) is an abbreviated list of a massive number of earnings reports for Wednesday. Thursday The weekly Initial Jobless Claims numbers will be released on Thursday morning as well as Nonfarm Productivity and Unit Labor Costs. Thursday will be another busy day of earnings reports. Linde (LIN), Anheuser Busch (BUD), Volkswagen (BWAPY), Square (SQ), Fidelity (FIS), Moderna (MRNA), Roku (ROKU), Expedia (EXPE), Beyond Meat (BYND), AMC Entertainment (AMC) are some of the interesting reports. Friday More labor statistics will be released on Friday with the Average Hourly Earnings data, Nonfarm Payrolls, Labor Participation data and the Unemployment rate all released before market open. Adidas (ADDYY), BMW (BMWYY), DraftKings (DKNG), Cinemark (CNK) are a few of the companies to report on Friday and end a big earnings week. This another super busy week of earnings reports. Check your own portfolio for earnings dates so you aren't surprised. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side It may not be quite the week we were looking for, but we got a higher high and a higher low, setting up the markets for an uptrend from here. Even days with a dip, the index still seems to be closing around 14,000 which can be a support level from which to move higher. The Fed has stood strong on the statement that they would not touch interest rates despite inflation going above 2%. Now that the price data this past week is behind us, investors can move their focus off inflation and focus on the underlying economic strength that will be shown in manufacturing data, purchasing index data and employment data. That should put more confidence behind the positive earnings reports this past week. The treasury yield curve remains about the same over the past two months, easing fears that longer term interest rates would outpace short term rates and make money more expensive for growth companies. The US Dollar bounced off of recent lows on Friday, but remains low compared to the past year. That should help large multinationals. Another week of good earnings reports might be enough to turn sentiment upward and get a more positive reaction from investors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side The failed rally attempts among great earnings reports could just be the beginning. Investors don't trust that market leaders can continue the amazing growth they've showed over the past year. They also see headwinds coming if inflation continues at a high rate, causing a reaction by the Fed. The looming inflation numbers mean that even with great economic news, investors might just see added fuel to the fire of an overheated economy that needs to be controlled with higher interest rates. Combine that with a breakout of the US Dollar from a descent since the beginning of April and the two could cause quite an impact to valuations for the big multinational companies. The advance/decline ratio was above 1.0 only six times in April. Meaning most days in April there were more declining stocks than advancing stocks on the Nasdaq. That might be different in the broader market, but it doesn't bode well for big tech and growth stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq closed just below 14,000 this past week, but seemed to return to the area after dips. We want to get above that line and stay there to support further gains and break into new all-time highs. On the positive side, the levels are: 14,000 will be the first line to pass, also taking the index above the 10d moving average. The all-time high is at 14,211.57 is the all-time high and the high of this week. 14,850 is the middle line of the channel from the March 2020 bottom. The index has been in the channel, but below the midline for the past nine weeks. On the downside, there are a few key levels: The low of this past week is 13,941.63. Let's get a higher low for next week. The 21d exponential moving average is at 13,860.07. A previous support area is around 13,600. The 50d moving average has been moving sideways and is at 13,511.49. The lower line of the channel from the March 2020 bottom is around 13,515 for next week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up Can it get any better? That's what investors want to know. The economy is super charged for recover and the Fed continues support. But the more overheated the economic growth becomes, the more nervous investors will get. That's why seemingly positive news is being met with dips in the market. So the next week, we'll watch for reactions to earnings reports and economic news. If the reports are positive and the reactions are good, then we can rest easy. Otherwise, we'll be watching for those key levels to see just how nervous investors have become. If we lose support in some of the key levels, then a defensive position will be warranted. Lots of earning reports next week. Keep your eye on your portfolio so you are not surprised. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 4/19/2021 - 4/23/2021Summary: The start to the week was not much of a surprise. Major indexes pulled back from record highs set the previous week. Those highs were from overextended mega-caps and the daily gains were not shared broadly across the market. We were watching for a day with broader gains and higher volume. Notes The 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. 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 daily charts for more detail on sectors, indexes and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, April 19, 2021 Facts: -0.98%, Volume lower, Closing range: 36%, Body: 35% Good: Afternoon support after hitting 13,850 Bad: Lower high, lower low, back below 14,000 line Highs/Lows: Lower high, lower low Candle: Body in the middle of candle, about equal upper and lower wicks Advance/Decline: Almost four declining stocks for every advancing stock Indexes: SPX (-0.53%), DJI (-0.36%), RUT (-1.36%), VIX (+6.40%) Sectors: Real Estate (XLRE +0.31%) and Health (XLV +0.02%) were only gaining sectors. Technology (XLK -0.83%) and Consumer Discretionary (XLY -1.12%) were bottom. Expectation: Sideways or Lower After closing last week at record highs, it's reasonable that the equity markets pull back a bit before advancing again. That pull back came abruptly as the session opened in the morning but the markets found some support heading into the afternoon. The Nasdaq declined -0.98% on lower volume for the day. The upper wick formed in the first 15 minutes of trading, The declines came mostly in the morning, forming the lower wick. The candle finished the day with a 36% closing range at the bottom of a red 35% body in the center of the candle. There were almost 4 declining stocks for every one advancing stock on a day of lower highs and lower lows. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, April 20, 2021 Facts: -0.92%, Volume lower, Closing range: 38%, Body: 47% Good: Support at 21d EMA and 13,700 area Bad: Closing range from morning sell-off Highs/Lows: Lower high, lower low Candle: Thick red body with a longer lower wick Advance/Decline: Almost five declining stocks for every advancing stock Indexes: SPX (-0.68%), DJI (-0.75%), RUT (-1.96%), VIX (+8.00%) Sectors: Utilities (XLU +1.27%) and Real Estate (XLRE +1.11%) were the top sectors. Financials (XLF -1.87%) and Energy (XLE -2.65%) were bottom. Expectation: Sideways or Lower The market continued to pull back for another day as investors begin to absorb more earnings reports. Those results and the guidance not only impact to their respective stock prices but also indicate what parts of the economy are recovering faster or slower. The Nasdaq closed down -0.92% on lower volume with a closing range of 38%. That closing range came after heavy morning selling, a bounce off the 21d EMA and a few tests of the 13,700 area. The index find support there and rallied a bit into close to finish with a thick red 47% red body over a longer lower wick. There were almost five declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, April 21, 2021 Facts: +1.19%, Volume lower, Closing range: 100%, Body: 84% Good: Test of 21d EMA in morning then buying throughout the day, rally into close Bad: Lower volume Highs/Lows: Higher high, higher low Candle: Long green body with no upper wick, small lower wick Advance/Decline: Five advancing stocks for every two declining stocks Indexes: SPX (+0.93%), DJI (+0.93%), RUT (+2.35%), VIX (-6.32%) Sectors: Materials (XLB +1.82%) and Financials (XLF +1.39%) were the top sectors. Communications (XLC +0.17%) and Utilities (-0.84%) were bottom. Expectation: Higher The gains were broad across segments and sectors today, pivoting the indexes to the upside after a few days of declines. The only thing that was missing is higher volume that would indicate more institutional support in the gains. We'll take what we got for now and then keep a close eye in the days to come. The Nasdaq finally had the advance/decline ratio above 1.0 after eight sessions in a row of more decliners than advancers. Along with great support from mega-caps, the index closed with a +1.19% gain and a closing range of 100%. The 84% green body is above a small lower wick formed from a dip at open. Otherwise, the bulls led the index higher through the whole day. There were over 5 advancing stocks for every 2 declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, April 22, 2021 Facts: -0.94%, Volume higher, Closing range: 19%, Body: 55% Good: Higher high, higher low Bad: Mid-day reversal on high volume Highs/Lows: Higher high, higher low Candle: Reversal candle, gap up with long upper wick, turning into a lower close Advance/Decline: More declining stocks than advancing stocks Indexes: SPX (-0.92%), DJI (-0.94%), RUT (-0.31%), VIX (+6.91%) Sectors: Real Estate (XLRE -0.43%) and Health (XLV -0.45%) were top. Technology (XLK -1.17%) and Materials (XLB -1.69%) was bottom. Expectation: Sideways or Lower The day started by honoring the expectation we had of a move higher, but a mid-day reversal busted that expectation, erasing the gains and sending prices plummeting. The reason was obvious. News broke that Biden would propose a huge increase in capital gains tax. So we'll look closely at the impact and what we might expect from here. The Nasdaq closed with a -0.94% decline on higher volume. The higher volume distribution starting at the 1pm news alert. The 94% red body is below a longer upper wick that formed from the morning rally before the news. The closing range is 19% and shows some recovery from the initial selling of the news. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, April 23, 2021 Facts: +1.44%, Volume lower, Closing range: 78%, Body: 75% Good: Now lower wick, strong buying all morning Bad: Slight dip into close as the weekend arrives Highs/Lows: Higher high, higher low Candle: Mostly green body with a longer upper wick from the dip at close Advance/Decline: Two advancing stocks for every declining stock Indexes: SPX (+1.09%), DJI (+0.67%), RUT (+1.76%), VIX (-7.38%) Sectors: Financial (XLF +1.87%) and Materials (XLB +1.64%) were top. Utilities (XLU -0.13%) and Consumer Staples (XLP -0.26%) were bottom. Expectation: Higher Strong economic data sent the markets higher on Friday as investors shook off the capital gains tax worries. Small caps took the lead for another session as gains were shared broadly across segments and sectors. The Nasdaq gained +1.44% on lower volume than yesterday, but higher volume than earlier in the week. The 75% body is above a very tiny lower wick. The closing range of 78% is just below a longer upper wick that formed in the last 30 minutes of the session from selling into the weekend. There were two advancing stocks for every declining stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The start to the week was not much of a surprise. Major indexes pulled back from record highs set the previous week. Those highs were from overextended mega-caps and the daily gains were not shared broadly across the market. We were watching for a day with broader gains and higher volume. After two days of pullbacks, that hit the small caps the hardest, the turn in the in the market came on Wednesday. The advance/decline line finally moved above 1.0 with five advancing stocks for every two declining stocks, but volume was still lower than previous days. It looked like we would get the broad gains and higher volume on Thursday as the market opened with another rally. But the rally was short lived. News of Biden raising the capital gains tax hit the street and investors sold off positions in the afternoon. But even in the selling, small caps were still outperforming and there was a sense that the sell the news event would find a bottom and the rally could resume. And it did. Friday picked back up where we were trying to go on Thursday morning. There were broad gains across the market. And although volume was lower than Thursday, it was higher than the previous days and gave us the positive signal we were looking for. This growth/value comparison we've been tracking continued to move sideways this week as growth and value plays moved together. The Nasdaq retreated -0.25% for the week, but ended with a closing range of 87% after recovering from the dip at the beginning of the week and rebounding from the capital gains tax scare mid-week. The index was able to set just a slightly higher high than the previous week, but also set a lower low. More importantly, the index closed above 14,000 for a second week in a row. Volume was lower than the previous week. The Russell 2000 (RUT) gained +0.41% for the week thanks to a strong small cap performance late in the week. The S&P 500 lost -0.13% for the week. The Dow Jones Industrial average (DJI) declined -0.46%. The VIX volatility index rose +6.65% over a back-and-forth week. Despite the declines across the major indexes, there were two sectors that soared. Real Estate ( XLRE ) ended the week as the top sector, advancing over 2%. Three factors helped the sector breakout and then stay on top the whole week. The economic recovery is a boon for the real estate industry as occupancy rates climb driving demand and prices higher. Interest rates remain low thanks to the Fed's continued easy money policy, keeping costs low. And in a climate of nervous investors, fearful of new lockdowns around the world, the real estate sector becomes a nice defensive play that has growth potential as well. Healthcare ( XLV ) was the second best sector of the week. The sector has lagged behind the S&P 500 since the beginning of the year. Positive earnings reports from UnitedHealth ( UNH ) and Johnson & Johnson ( JNJ ) over the past few weeks gave it the momentum needed to catch up with a 1.81% advance this week. The only other sectors that had gains for the week were Materials ( XLB ) and Industrials ( XLI ), both responding positively to great economic recovery news. At the bottom of the sector list were Energy ( XLE ) and Consumer Discretionary ( XLY ). Energy stocks continue to underperform as oil prices have been dropping in recent weeks. Consumer Discretionary was a big part of the S&P 500 setting records the previous three weeks and was due to pause or pullback this week. Earnings reports from Tesla ( TSLA ) and Amazon ( AMZN ) next week will have a big influence on the sector performance. The yield curve continues to flatten this week with the US 30y treasury bond and US 10y treasury note yields both declining. The US 2y note yield rose slightly. Both the High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced for the week. The US Dollar (DXY) continues to slide from the end of March, declining another -0.86% this week. Silver (SILVER) and Gold (GOLD) both advanced for the week. Crude Oil (CRUDEOIL1!) declined -1.46%. Timber (WOOD) declined -1.71% but is still near highs. Copper (COPPER1!) and Aluminum (ALI1!) both advanced for another week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The big four mega-caps continue to outpace the rest of the market. Alphabet (GOOGL) moved up +0.75% for the week. Microsoft (MSFT) gained +0.16% while Apple (AAPL) advanced +0.12%. Only Amazon (AMZN) declined for the week, losing -1.72%. All four are trading above their 10w and 40w moving average lines. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Only Carnival Cruise Lines (CCL) could end the week with a light gain after dipping below its 10w moving average line and closing above it. Marriott (MAR) also dipped below the line but close above it, declining just -0.18% for the week. Exxon Mobil (XOM) declined -1.92%, closing the week below the 10w moving average. Delta (DAL) declined -1.80% and also remained below the line. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) closed the week 0.651. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed index moved to the greed side but not far off neutral. The NAAIM exposure index remained about the same, moving just slightly lower to 95.6. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Monday will kick-off the week with Core Durable Goods orders data for March. The data is a leading indicator showing increased manufacturing data to respond to higher consumer demand. The House Price Index data on Tuesday will be interesting. It has been at its highest level since 2014. Higher prices are supposed to be bullish for the USD. Consumer Confidence data will be released just after market open. The API Weekly crude oil report will be released after close. Wednesday's news will include the Good Trade Balance and Retail Inventories before market open. Crude Oil Inventories after the market open. There is a Fed Interest Rate Decision and FOMC Press Conference after 2pm. On Thursday, new GDP data will be released which is expected to be 6.5%. Initial Jobless Claims data will hopefully continue to fall. Pending Home Sales data will be released after market open. Inflation will be front and center again on Friday. PCE Price Index data will be released in the morning. That will compliment Personal Spending data and Consumer Expectations and Sentiment that have all been driving higher demand and higher prices. The frequency of earnings reports will start to pick up next week. Investors will be watching all earnings reports closely to measure sector performance in the economic recovery. Kicking off on Monday will be reports from Tesla (TSLA), NXP Semiconductors (NXPI), Canon (CAJ), Albertsons (ACI). On Tuesday, Microsoft (MSFT), Alphabet (GOOGL), Visa (V), Eli Lily (LLY), United Parcel Service (UPS), Starbucks (SBUX), General Electric (GE), 3M (MMM), AMD (AMD), ABB (ABB), and FireEye (FEYE). Wednesday includes reports from Apple (AAPL), Facebook (FB), Qualcomm (QCOM), Boeing (BA), Shopify (SHOP), ServiceNow (NOW), ADP (ADP), Spotify (SPOT), Ford (F), eBay (EBAY), and Teladoc (TDOC). On Thursday, Amazon (AMZN), Mastercard (MA), Comcast (CMCSA), Thermo Fisher Scientific (TMO), McDonald's (MCD), Baidu (BIDU), Atlassian (TEAM), Twitter (TWTR), Fortinet (FTNT), Royal Caribbean (RCL), and Logitech (LOGI). Friday will close the big earnings week with Alibaba (BABA), Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX), AstraZeneca (AZN), Johnson Controls (JCI), and Komatsu (KMTUY). It would be an understatement to say this is not an exhaustive list. Check your own portfolio for earnings dates so you aren't surprised. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side Despite the scare on Thursday, the market gave us a lot to be excited about in the last three days. We saw the advance/decline line finally move above 1.0 as the small caps began to rebound and drive the Russell 2000 higher. With the mega-caps also moving up, it will provide a lot of momentum into next week, possibly getting the Nasdaq to a new all-time high. More economic news throughout the week should support the view that the economy is booming and drive further positive sentiment to the market. Treasury yields are coming down, making money cheaper again. The USD dollar weakening can be a boost to large multinationals. Positive earnings reports this week may be just the boost the market needs to head higher. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Volume continues to move lower even as the market gains, potentially signaling a top. From the start of the year, the highest volume weeks are red declining weeks. This may be the reduction of retail investors participating in the active market, but it could also be institutions reducing positions. Any of the economic news events this week could be a negative surprise start a sell-off. Especially any hints from the Fed of monetary policy changes would be received with a big negative reaction. Positive earnings reports this week may already be priced in, and any disappointing results or guidance will certainly alarm investors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq closed above 14,000 two weeks in a row, but can it move toward an all-time high? That's the question for this week. On the positive side, the levels are: 14,062.74 is the high of this week. That will be the first price to beat this week. The all-time high is at 14,175.12. 14,727 is the middle line of the channel from the March 2020 bottom. The index has been below the midline for the past nine weeks. On the downside, there are a few key levels: The 10d MA is at 13,928.15. The index dipped below this line the past week, but closed above it on Friday. The 21d exponential moving average is at 13,739.15. The low of this past week is 13,698.67. Let's get a higher low for next week. The 50d moving average is at 13,504.97. The lower line of the channel from the March 2020 bottom is around 13,360 for next week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up There are smart people that say the market is extended and positive news and earning reports are already priced in. There are also smart people who believe the recovering economy and support of the Fed is going to send the market higher. I try to see both sides in the market week in review, so how to decide? Follow price. Next week, with all the earning reports and economic news, the only questions that need to be answered is what happens to the indexes and what happens to the stocks in your portfolio. Live by your investment rules and let them be your guide. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
Market Week in Review - 4/12/2021 - 4/16/2021Summary: There are some interesting questions to answer this week. How much of the economic recovery is already priced into the equity markets? Are investors done with the value trade and moving back to growth, or does value still have more gains ahead? Does the market really see inflation as a threat or is it just necessary and transitionary in the current cycle? Notes The 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. 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 daily charts for more detail on sectors, indexes and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, April 12, 2021 Facts: -0.36%, Volume higher, Closing range: 71%, Body: -5% Good: Higher low than previous day, high closing range Bad: Distribution day, lower high, loss on higher volume Highs/Lows: Lower high, higher low Candle: Inside day, thin red body in upper half of candle Advance/Decline: Almost three declining for every advancing stock Indexes: SPX (-0.02%), DJI (-0.16%), RUT (-0.16%), VIX (+1.32%) Sectors: Consumer Discretionary (XLY +0.64%) and Real Estate (XLRE +0.59%) were top. Technology (XLK -0.48%) and Energy (XLE -0.79%) were bottom. Expectation: Sideways or Lower After several days of big gains, its ok for the markets to take a pause. Morning selling turned into buying as treasury auctions showed little trouble and yields remained under control. But the confidence wasn't enough to hold the indexes near intraday highs as investors turned their attention to inflation data becoming available Tuesday morning. The Nasdaq closed the session with a -0.36% decline on higher volume, marking a distribution day for the index. The thin red body of 5% represents indecision between the good news on treasury auctions, but the potential for bad news in inflation data. The positive is that the body is in the upper half of the candle with a high closing range of 71%, showing a slightly more bullishness in the market. There were 3 declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, April 13, 2021 Facts: +1.05%, Volume lower, Closing range: 86%, Body: 89% (w/gap) Good: Higher high, higher low, large green body and high closing range Bad: Small dip at end of day Highs/Lows: Higher high, higher low Candle: Large green body under a small upper wick, no lower wick Advance/Decline: Three declining stocks for every two advancing stocks Indexes: SPX (+0.33%), DJI (-0.20%), RUT (-0.22%), VIX (-1.54%) Sectors: Utilities (+1.19%) and Consumer Discretionary (+1.06%) were top. Consumer Staples (-0.53%) and Finance (-0.33%) were bottom. Expectation: Sideways or Higher Bigger than expected inflation didn't hold back the markets from setting new records today. The S&P 500 set another new record close while the Nasdaq inches toward key support levels. The gains were driven mostly by large mega-caps and not shared broadly across the indexes. The Nasdaq advanced +1.05% for the day and closed just below the 14,000 resistance line. The candle has no lower wick as the intraday low was set at the opening bell. The thick green 86% body led the index to a 89% closing range (including the gap) with the intraday high being set late in the afternoon. The advance was driven by larger cap stocks, as there were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, April 14, 2021 Facts: -0.99%, Volume lower, Closing range: 10%, Body: 75% Good: Higher high, pullback is on lower volume Bad: Selling almost entire day, couldn't hold above 14,000 Highs/Lows: Higher high, lower low Candle: Outside day, candle is mostly body with a longer upper wick from a rally at open Advance/Decline: Slightly more declining stocks than advancing stocks Indexes: SPX (-0.41%), DJI (+0.16%), RUT (+0.84%), VIX (+2.04%) Sectors: Energy (+2.78%) and Materials (+0.72%) were top. Communications (-1.03%) and Technology (XLK -1.06%) were bottom. Expectation: Sideways or Lower The cyclicals moved back to the top of the sector list as investors were motivated by positive import/export data and crude oil inventories. The data provided a good reason for investors to rotate back into the cyclical sectors after chasing gains in big tech over the past few weeks. The Nasdaq pulled back from recent gains, closing the day with a -0.99% decline on lower volume. The 75% red body represents a day for the bears that ended in a 10% closing range. The index set a higher high in the morning but ended the day with a lower low, providing an outside bearish candle. There were more declining stocks than advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, April 15, 2021 Facts: +1.31%, Volume higher, Closing range: 87%, Body: 71% Good: Higher high, higher low, close above 14,000 Bad: Nothing Highs/Lows: Higher high, higher low Candle: Mostly body with about equal upper and lower wicks Advance/Decline: More declining stocks than advancing stocks Indexes: SPX (+1.11%), DJI (+0.90%), RUT (+0.42%), VIX (-2.47%) Sectors: Real Estate (XLRE +1.90%) and Technology (XLK +1.72%) were top. Financial (XLF -0.09%) and Energy (XLE -0.81%) were bottom. Expectation: Sideways or Higher Positive economic data gave a kick in the right direction to equity markets, allowing the S&P 500 and Dow Jones Industrial average to close again at all-time highs. The day was owned by the bulls with just a few pullbacks, but still the gains were not felt by everyone, with more stocks declining than advancing. The Nasdaq closed the day with a +1.31% gain on higher volume. The candle, made up of mostly a green body, has a closing range of 87% about even upper and lower wicks. A higher high and higher low provides direction to the previous days outside range. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Friday, April 16, 2021 Facts: +0.10%, Volume higher, Closing range: 88%, Body: 8% Good: Higher high after early selling turns to late buying Bad: Red body, morning sell-off, slight dip at end of session Highs/Lows: Higher high, higher low Candle: Long lower wick with a thin body at the top of the candle Advance/Decline: More than three declining stocks for every two advancing stocks Indexes: SPX (+0.36%), DJI (+0.48%), RUT (+0.25%), VIX (-1.93%) Sectors: Materials (XLB +1.21%), Utilities (XLU +0.81%) were top. Communications (XLC -0.07%) and Energy (XLE -0.80%) were bottom. Expectation: Sideways or Higher The indexes set more records on Friday, with the Dow Jones Industrial and S&P 500 closing at new all-time highs again. That gains initially came at open after positive building data drove the materials sector to the top of the sector list. It was not a straight line. The market dipped in the morning and the indexes needed to climb back to close near intraday highs. The Nasdaq closed with +0.10%, above yesterday's close but slightly below the opening price. The bears took over shortly after open, bringing the index nearly to yesterday's low. But the bulls fought back and bought it back to make an intraday high before dipping into close. The long lower wick was formed in the morning selling. The thin 8% body is at the top of the candle which has an 88% closing range. There were more than three declining stocks for every two advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) There are some interesting questions to answer this week. How much of the economic recovery is already priced into the equity markets? Are investors done with the value trade and moving back to growth, or does value still have more gains ahead? Does the market really see inflation as a threat or is it just necessary and transitionary in the current cycle? Coming into the week, investors showed caution as they waited for two things. Tuesday's consumer price index data would provide a look at how high inflation moved in March. Second would be the earnings reports for big finance, starting on Wednesday. That caution brought an indecisive candle on Monday, a fight between bulls and bears, creating a thin body where the close was just below the mornings open. The consumer price index data did come in higher than expected on Tuesday. But it seemed the equity markets had already priced in the fear of higher inflation. The numbers had a different consequence. The US Dollar weakened. The weaker US dollar was a boost for multinational mega-caps, amidst the caution in the market. It was interesting to see Utilities top the sector list, signaling caution, while still Consumer Discretionary and Technology came in second and third, helping advance the Nasdaq for the day. After more than a week of strong gains with the largest mega-caps, we were due a pullback as investors take profits and turn to other opportunities. That happened on Wednesday. The mega-caps all dipped, taking the Nasdaq down for the day. Investors turned back to the cyclicals for new opportunities, especially in the Financial sector after positive reports from big banks in the morning. Import/Export data was good, Crude Oil Inventories good, demand for Chinese exports soared. It all showed economic activity accelerating. Perfect for cyclicals. Yet, the enthusiasm for cyclicals was short lived. Thursday was back to big tech and growth stocks with the Financial and Energy sector moving back to the bottom of the sector list. And that Growth vs Value is a theme for the week that's worth more exploring. The sure winner for the week, without much to question, was the Materials sector and the commodities behind it. All data from retail sales, China exports to the huge building permits and housing starts data on Friday, are driving commodity prices higher and boosting the Materials sector. For big tech and Nasdaq, Friday was another indecisive day while the other major indexes hit all-time highs. But the curious thing for the week was how the Nasdaq put in higher highs all week while never seeing the advance/decline ratio move about 1.0. It hasn't been above 1.0 for the past six trading sessions. What was happening? You can see what was happening by looking at the top and bottom lists for mega-caps and growth stocks throughout the week. You'll see the same names show up in the top list one day and the bottom list the next. Nvidia (NVDA) is a great example, going back and forth between top and bottom mover. Chinese stocks FUTU Holdings (FUTU) and UP Fintech (TIGR) had the opposite days from Nvidia. So the advancing stocks one day exchanged places with the declining stocks the next day. That constant rotation within the index kept the advance/decline line below 1.0 while the mega-caps continued to push higher highs though the week. But by the end of the week, the rotations didn't prevent a broad set of stocks moving upward. Looking at the QQQ (weighted) index vs the QQQE (equal weight) index, the gains for the week are a bit more for the weighted index, but not that much higher. So despite rotation, that may have left some investors dazed, eventually the gains were shared broadly on a weekly basis. Another way to view the rotation within the week is the back and forth between value and growth stocks. The last two weeks, investors moved back into growth stocks, clearly seen in the ratio of gains between growth and value stocks. However this week, the rise of growth relative to value stocks paused and went back and forth as it appeared investors weren't sure which was the right play moving forward. The Nasdaq advanced +1.09% for the week. The closing range of 96% marks the third week in a row of a closing range above 95%. Volume was higher. The higher and higher low is also a three week trend. The key level we needed to pass this week was 14,000. The index topped it twice and retreated but then closed above on Thursday. One more test on Friday, confirmed the resistance level turned to a support area and the index closed the week above the line on its way to a new all-time high. The S&P 500 (SPX) and Dow Jones Industrial (DJI) both set new all-time highs for another week. The S&P 500 gained +1.37% for the week. The Dow Jones Industrial average gained +1.18%. The Russell 2000 (RUT) gained +0.86%, completing a three-weeks tight pattern where the index closes within a tight range each week. Small caps are still searching for their spot in the current rally. The VIX volatility index continues lower with a -2.64% decline this week. Utilities ( XLU ) is surprisingly the top sector for the week. Topping the list on Tuesday and nearing the top of the list on Friday the sector had steady gains throughout the week. The sector is usually a defensive move for investors. Perhaps investors nervousness grew as the S&P 500 has been setting new all-time highs. Less of a surprise is to see Materials ( XLB ) at the top of the weekly list. The sector is benefiting not only from investments on infrastructure being discussed in Washington, but also a strong housing sector and a surge in building permits. Energy ( XLE ) had a choppy week, taking the lead on Wednesday, but quickly fading to near the bottom of the list for the weekly. Consumer Discretionary ( XLY ) also had some good days this week, advancing on news of strong retail sales and an advance in consumer credit showing increased spending. The worst performing sector this week was Communications ( XLC ). There have been some reports of decelerating spending on Internet media and social platforms from retailers. That makes sense as demand is naturally increasing and requires less effort for omnichannel marketing to bring in consumers. For the US Treasury yields, note the spread shown in the top of the chart. The green line is the difference between the US 10y and 2y yields. It's been flattening since the panic in March where the performance of equities was so tightly attached to the longer term treasury note yields. The US 30y bond and 10y note yields both declined for the week while the 2y note yields rose, helping narrow the spread between long term and short term yields. Both the High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced for the week. s3.tradingview.com The US Dollar (DXY) retreated -0.70% erasing all the gains during March and giving a boost to multinational companies that can benefit from a weakened US dollar. All commodities, in the six tracked by this update, rose for the week, showing the high demand while economic activity continues to increase. Timber (WOOD) is all time highs. COPPER (COPPER1!) is at its highest since at least 2015. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps The four big mega-caps completed a third week of gains, helping drive the index and their respective sectors higher. Microsoft (MSFT) had the biggest weekly gain, advancing +1.91%. Apple (AAPL) advanced +0.88%. Alphabet (GOOGL) gained +0.53%. All of these three have 10w moving average lines above the 40w moving average line. Amazon (AMZN) advanced +0.81% for the week and is trying to keep the 10w MA above the 40w MA. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Exxon Mobil (XOM) was able to finish the week with a +1.41% gain despite the Energy sector not faring well. Marriott (MAR) had a small gain of +0.10% gain. However, Carnival Cruise Lines (CCL) and Delta Airlines (DAL) lost -7.75% and -5.34% for the week as new waves of the pandemic outside of the US brought in new fears of impact to the travel and leisure sectors. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) closed the week 0.567. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed index moved back and forth around neutral but ended the week on the greed side. The NAAIM exposure index rose to 96.57. Money managers continue to increase exposure in the market. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead Economic news on Monday will start off light with just a few short-term treasury bill auctions scheduled. They likely won't have much influence over yield concerns. Tuesday also will be light. The API weekly crude oil stock update will come at market close. Wednesday, additional crude oil inventory data will be released in the morning. A 20y treasury bond auction will happen in the afternoon. Thursday will bring an update to Initial Jobless Claims and Existing Home sales. On Friday the Manufacturing and Services Purchasing Managers Index data will be released. The data is an indicator for economic activity the respective sectors. New Home Sales data will also be released in the morning. Coca-Cola (KO) will kick-off the week with a premarket earnings release on Monday. After market close, IBM (IBM), United Airlines (UAL), and Steel Dynamics (STLD) could be important earnings reports to watch. Johnson & Johnson (JNJ) and Proctor & Gamble (PG) will both release earnings on Tuesday. They will be joined by Netflix (NFLX), Abbot Labs (ABT), Philip Morris (PM) and Lockheed Martin (LMT). On Wednesday, Roche Holding (RHBY), Verizon (VZ), Chipotle (CMG) will release updates. Thursday's earnings updates will include Intel (INTC), AT&T (T), Snap (SNAP), and DR Horton (DHI). Friday will close the week with earnings reports from Honeywell (HON) and American Express (AXP). Earnings reports for the first quarter of the year are starting to pick up and this isn't meant to be an exhaustive list. Check your own portfolio for earnings dates so you aren't surprised. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side The S&P 500 and Dow Jones Industrial continue to set records with all-time high closes. One could see that as the potential for a pullback in the markets, but it could also be time for the tech and small-caps to have their turn and bring the Nasdaq and the Russell 2000 up to all-time highs as well. Inflation numbers are out in the open and investors didn't run from equity markets. Rather the impact to the US dollar showed there is some silver lining in the higher inflation number, that multinational companies can benefit from a weaker dollar under higher inflation. It also shows investors are taking some heed from the Fed that higher inflation doesn't necessarily mean higher interest rates. Considering the mixed reaction to inflation, then one must be excited about the accelerating performance of the economy. You would be hard pressed to find a time when the economy grew at pace like it is now and the equity markets didn't advance at some level. There is much to be positive about, from the flattening yield curve, to good earnings reports over the past week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Sure, there are positive gains in the market, but the gains are limited to a few players that are over extended or built on thin bases. Although mega-caps have carried the indexes higher, the big companies are now extended and ripe for a pullback. The action for their counterparts in mid-cap growth stocks are all over the place without strong price action to support expectation for further gains. Many popular small-caps seem to be on a downward spiral with no bottom in site. Big finance earnings reports this past week were strong, thanks to improving yields in long term treasuries that impact results for big banks. Financial institutions have also benefited from the huge rise in investment activity in the first quarter. But how will earnings reports outside of the Financial sector look in the coming weeks. More importantly, what will be the outlook set for big tech and growth stocks as they face the post-pandemic recovery? Those could be in for a shock to investors compared to the tail winds of 2020. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch This week we will be watching for a new all-time high for the Nasdaq. Will it come this week, or is one more pullback necessary before the milestone? On the positive side, the levels are: 14,062.50 is the high of this week. That will be the first price to beat this week. The all-time high is at 14,175.12. 14,564 is the middle line of the channel from the March 2020 bottom. The index has been below the midline for the past eight weeks. On the downside, there are a few key levels: The low of this past week is 13,783.95. Let's get a higher low for next week. The 10d MA is at 13,861.74. The index has done well to stay above this line during power trends. The 21d exponential moving average is at 13,639.66. The 21d EMA is now above the 50d MA, a good confirmation of an uptrend. The 50d moving average is at 13,507.28. The lower line of the channel from the March 2020 bottom is around 13,192 for next week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up There's really one thing I'm watching for next week from a macro perspective. Will the advance/decline ratio rise above 1.0? When will there be a broader rally vs growth limited to the mega-caps while everything else rotates? That broader rally will mean there is enough shake out in equities that now investors are starting to set solid bets in the market vs chasing swings. As for the individual investor, the most important price action is the one in your portfolio. Looking past the daily charts, how are your stocks performing on a weekly basis? The day-to-day swings don't matter as much as the weekly action that shows whether there is institutional support and growth heading into the economic recovery. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321
2
Market Week in Review - 4/5/2021 - 4/9/2021The 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 daily charts for more detail on sectors, indexes and market leaders each day. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Monday, April 5, 2021 Facts: +1.67%, Volume lower, Closing range: 94% (w/Gap), Body: +80% Good: Three positive days in a row, above 13,700 confirmed with a quick retest Bad: Lowering volume Highs/Lows: Higher high, higher low Candle: Gap up, mostly green body with a slightly longer upper wick Advance/Decline: About the same number of advancing as declining stocks. Indexes: SPX (+1.44%), DJI (+1.13%), RUT (+0.49%), VIX (+3.35%) Sectors: Consumer Discretionary (XLY +2.27%) and Communications (XLC +2.11%) were top. Energy (XLE -2.39%) was the only declining sector. Expectation: Higher The markets set new records on Monday led by gains from the largest public companies in Consumer Discretionary, Communications and Technology. The S&P 500 and Dow Jones Industrial marked new all-time highs with a bullish session that began the day with opening gap ups. The Nasdaq closed the day with a +1.67% gain on lower volume. The closing range of 94% includes the morning gap-up that led to an 80% green body. A minor fade in the afternoon created a slightly longer upper wick than the lower wick but the higher high and higher low continue a strong uptrend from last week's pivot. There were about the same number of gaining stocks as declining stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Tuesday, April 6, 2021 Facts: -0.05%, Volume lower, Closing range: 24%, Body: +16% Good: Higher high, higher low, held support around 13,700 Bad: Long upper shadow from afternoon selling Highs/Lows: Higher high, higher low Candle: Long upper shadow above a thin green body Advance/Decline: About three declining for every two advancing stocks. Indexes: SPX (-0.10%), DJI (-0.29%), RUT (-0.25%), VIX (+1.17%) Sectors: Utilities (XLU +0.53%) and Consumer Discretionary (XLY +0.43%) were top. Health Services (XLV -0.38%) and Technology (XLK -0.43%) Expectation: Sideways or Higher There was caution in the market on Tuesday after several days of record setting gains. Investors are monitoring the progress of infrastructure plans and the potential for new taxes. At the same time, the pandemic keeps popping up new fears as Canada declares a very serious third wave. The Nasdaq closed with a small -0.05% loss, after climbing 0.5% in the morning. The closing range of 24% is above a thin 16% body signaling indecision. The long upper wick was formed from a morning rally that sold off in the afternoon. Still, the index seemed to have support around the 13,700 area, testing the area twice and settling just below the line at the close. There were 3 declining stocks for every 2 advancing stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wednesday, April 7, 2021 Facts: -0.07%, Volume lower, Closing range: 44%, Body: +17% Good: Stayed near 13,700 support, lower volume, not a distribution day Bad: Indecisive candle, no signal on direction Highs/Lows: Lower high, lower low Candle: Long upper shadow above a thin green body Advance/Decline: About three declining for every two advancing stocks. Indexes: SPX (+0.15%), DJI (+0.05%), RUT (-1.60%), VIX (-5.30%) Sectors: Communications (XLC +0.77%) and Technology (XLK +0.53%) were top. Industrials (XLI -0.46%) and Materials (XLB -1.72%) were bottom. Expectation: Sideways It was a choppy side-ways session today for most of the market. The small caps suffered compared to the larger caps while mid-cap growth stocks had mixed results. Overall, investor sentiment remained cautious without many big reactions to economic news. The Nasdaq closed with a -0.07% decline, another indecisive day without a clear signal on direction. The 17% body is in the lower half of the candle as the index attempted to find a rally twice but reversed quickly back to the 13,700 area. The closing range of 44% is better than the previous day, but the lower higher and lower low show the bears put up a good fight. There were nearly four declining stocks for every advancing stock. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Thursday, April 8, 2021 Facts: +1.03%, Volume higher, Closing range: 99%, Body: +45% Good: Gains all-day with few pullbacks, high closing range, higher volume Bad: Nothing Highs/Lows: Higher high, higher low Candle: Longer lower wick under a green body, no upper wick Advance/Decline: Three advancing for every two declining stocks Indexes: SPX (+0.42%), DJI (+0.17%), RUT (+0.88%), VIX (-1.22%) Sectors: Technology (XLK +1.44%) and Consumer Discretionary (XLY +0.47%) were top. Real Estate (XLRE -0.49%) and Energy (XLE -1.30%) were bottom. Expectation: Higher Investors shook off early nervousness over higher jobless claims and bulls led the markets rally throughout the day. Treasury yields, the US Dollar and commodity prices all supported Technology as the leading sector of the day, carrying the Nasdaq to the leading index of the day. The Nasdaq closed with a +1.03% gain on higher volume. The 99% closing range resulted from a 45% green body at the top of the candle which opened with a gap above yesterday's close. The lower wick was formed in the morning, but the index quickly erased the dip with gains into the afternoon that ended with a rally at close. There were three advancing stocks for every declining stock. -=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 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. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Meaning of Life (View on the Week) The story of the week was the strength of big tech as the four largest mega-caps broke out of bases and drove indexes and their respective sectors higher. The week also saw a breakout of growth stocks relative to value stocks after a few months of rotation. It's still yet to be determined if the trends will stick, but the charts show a positive trend. Although it was Apple with the big weekly gain, Alphabet, Microsoft and Tesla all helped kick-off the momentum on Monday. Microsoft continued gains from the previous week's big announcement deal with the US Army. Tesla announced record production and deliveries for the first quarter over the holiday weekend. The gap-up on Monday took the index well past a declining resistance line. The big gain warranted a pause as the index tested the 13,700 resistance area. The next two days were mostly sideways choppy action. Investors showed caution in the market, signaled by the rise of Utilities from the bottom to the top of the sector chart during Tuesday's session. The caution continued into Wednesday even as mega-caps continued to advance. Then a surprise consumer credit number arrived late on Wednesday. Instead of a $5B expected number for February, consumer credit rose to $27.58 signaling that consumers were not only confident (from the previous weeks data), but were spending money. That was enough to continue the rally and the Nasdaq opened with another gap up on Thursday despite disappointing jobless claims in the morning. On top of the economic data, the USD dollar continued to weaken while the treasury yield curve was flattening and commodity prices showed high demand. It was bullish for the economy and the right context to see big tech and growth stocks soar. Friday ended the week with an outside day. Prices dipped in the morning as inflation worries crept back into investors' minds after the produce price index data was higher than expected. Those worries subsided and the index continued its rally into the close for the week. The Nasdaq advanced +3.12% for the week. The closing range is 99% for a second week in a row. Volume was lower. The lowering volume trend is largely due to the absence of the retail investor. That is confirmed by VandaTrack, which tracks retail investors and shows they are taking a step back from the market. That's bad news if you want to play your hand in the next YOLO meme stock trade. But it's good news if you want to see fewer swings in the value of your portfolio. The higher high and higher low is a great signal of the uptrend. The index closed just above 13,900 and is working toward the round number resistance of 14,000 before it moves toward a new all-time high. The S&P 500 (SPX) and Dow Jones Industrial (DJI) both set new all-time highs, making +2.71% and +1.95% advances for the week. The Russell 2000 (RUT) retreated -0.46% for the week. The Russell 2000 was outperforming since August but has been consolidating since hitting an all-time high in March. Certainly, small-caps and the index will benefit from market rallies, but the question will be at what level of relative performance to the rest of the market. This is something to watch over the coming weeks. The VIX volatility index closed well with the pre-pandemic price range with another -3.69% decline. The absence of retail investors seems to have helped reduce some of the volatility in the market as well. Growth broke out this week relative to value stocks. The dip in relative performance hit a low on March 8 and chopped back and forth before making a big move this week. The S&P 500 was dominated by three growth sectors for the week. Technology ( XLK ) finished the week as the top sector, taking the top spot on Thursday and Friday as big tech companies solidified breakouts from their recent consolidations. Likewise, Consumer Discretionary ( XLY ) and Communication Services ( XLC ) finished in second and third place largely thanks for mega-caps that are overweight in the lists. Energy ( XLE ) was at the bottom of the list with over a 4% decline. Some of that may be attributed to mixed outlook from analysts on supply and demand for oil . But Energy also tends to suffer when a large amount of investment rotates into the three big growth sectors. Only Energy declined for the week. The other sectors had gains, albeit underperformed the broader S&P 500 index . The 30y treasury bond yield gained slightly while the 10y note yield declined. The US 2y note yield also declined. Most importantly, the yield curve continues its trend of flattening, helping improve investor confidence in growth companies impacted by interest rates. Both the High Yield Corporate Bond (HYG) and Investment Grade Bond (LQD) prices advanced for the week. The spread between corporate bonds and treasury bonds still has some tightening to get back to pre-pandemic levels, but the trend is heading in the right direction. The US Dollar (DXY) retreated -0.89% this week giving a boost to big multi-national companies that can benefit from a weakened US Dollar. The recovery of economic activity is accelerating and that can be seen clearly in demand for commodities. Silver (SILVER) and Gold (GOLD) both advanced for the week. Crude Oil Futures (CRUDEOIL1!) declined for the week as investors balance the increased output with expected recovery in demand. Timber (WOOD) advanced for another week. Copper (COPPER1!) and Aluminum (ALI1!) both advanced for the week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Big Four Mega-caps It was a great week for the big four mega-caps. They all drove the indexes and their respective sectors higher. Apple (AAPL) gained + 8.13%, Microsoft (MSFT) gained +5.57%, Amazon (AMZN) gained +6.68%, and Alphabet (GOOGL) gained +6.62%. All four now show the 10 week moving average line above the 40 week moving average line, confirming their uptrends. As an added signal behind the strength of these breakout moves in the mega-caps, note at the volume is higher for all of them and at the bottom, the thick blue bars show a strong outperformance of the Nasdaq. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Four Recovery Stocks I picked four recovery stocks to track against the indexes and other indicators in this weekly report. Carnival Cruise Lines (CCL) gained over 9% after providing a cautiously optimistic outlook for this year during their earnings announcement. Delta Airlines (DAL) and Marriott (MAR) both held onto gains for the week, despite their red candles. Exxon Mobil (XOM) declined for the week, pulled down by downgrade of Chevron and sell-off of Energy stocks. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Investor Sentiment The put/call ratio (PCCE) closed the week 0.588. A contrarian indicator, when the put/call ratio is below 0.7, it signals overly bullish sentiment and could mean an overbought market. The CNN Fear & Greed index remained in the same area, on the side of greed, for most of the week. The NAAIM exposure index rose to 89.85, showing money managers are increasing position sizes again. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Week Ahead There will be Treasury auctions for 10y and 3y notes on Monday afternoon. The performance of those auctions could impact investor sentiment in the bond market and send yields in either direction. Consumer Price Index data for March will be released on Tuesday. The data compliments the produce price index data released this past week. The produce price index data is leading indicator to consumer price index data, both providing an outlook on inflation. Economic news for Wednesday includes Export/Import Price index data before markets open. Crude Oil Inventory data will be released after the market opens. Thursday has several economic data releases. Initial Jobless Claims data before the market opens will hopefully recover a bit from last week's negative surprise. Retail Sales data for March should show an improvement over the February numbers that were brought down by weather events. The Manufacturing Index data and Industrial Production data will also be leading indicators on the recovery of economic activity. Building Permits and Housing Starts data will be released on Friday morning. We will also get an update on Consumer Expectations and Consumer Sentiment. This quarters earning season will pick up next week, dominated by earnings reports in the Financial sector. Monday and Tuesday do not have any notable reports for the daily update. On Wednesday, JP Morgan (JPM), Wells Fargo (WFC), Goldman Sachs (GS) will release earnings reports. In addition, retail stocks Bed, Bath and Beyond (BBBY) and Lovesac (LOVE) will release earnings. On Thursday, the Financial sector earnings reports will include Bank of America (BAC), Citigroup (C), Charles Schwab (SCHW) and BlackRock (BLK). Taiwan Semiconductor (TSM), UnitedHealth (UNH), Delta Airlines (DAL) will also be closely watch earnings reports for the day. Friday's reports include Honeywell (HON) and Morgan Stanley (MS). -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bullish Side A lot of the bullish side is a continuation of the signals we saw at the end of the previous week. The mega-caps continued breakout moves on higher volume this week which has led the indexes higher and restored confidence in big tech and growth stocks. The volatility in the market continues to drop to pre-pandemic levels as retail investors spent new stimulus checks on something other than meme stocks. The US Dollar and Treasury Yields have also stopped their climbs that was causing investors to worry about interest rates impacting growth companies while the US Dollar impacts the bottom line of multi-nationals. The growth sectors of Technology, Communications and Consumer Discretionary are leading the market higher. These sectors focused on innovation, have been responsible for many of the big rallies over the past decade. The pop in consumer credit came as a positive surprise this past week. Consumer sentiment numbers this week could add to the positive outlook on spending as consumers unleash record-setting savings and new stimulus checks into the economy. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- The Bearish Side Investors are not worry-free. Biden's infrastructure plans and proposal for higher corporate taxes are having analysts and investors calculating the impact to sectors and valuations of US companies. The progress of these proposals in congress will keep investors on their toes for the coming weeks. Inflation also continues to be a top worry, stoked by Friday's produce price index data. The inflation outlook could get worse as consumer price index data is released this week. The Fed's assurance to not change monetary policy to control inflation only helps calm the worries to a certain degree. Energy being at the bottom of the sector list is another sign of the uncertainty. Analysts are watching closely as the pandemic hits third-waves in many countries which could cause lower than hoped demand for travel and leisure, and likewise lower demand for oil. While OPEC is cautiously increasing supply, a sharp pull back in demand will cause the sector further losses. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Key Nasdaq Levels to Watch The Nasdaq cleared key areas of resistance this past week, leaving just a few key levels in between Friday's close and a new all-time high. On the positive side, the levels are: 13,905.41 is the high of this week. Make a new high for next week to continue the uptrend. 14,000 will be the next area of resistance. Round numbers tend to be areas of resistance as they become triggers for alerts and buy/sell rules. The all-time high is at 14,175.12. That might be a stretch to get there this week, but keep it in our sites. On the downside, there are a few key levels: The low of this past week is 13,582.76. The moving average lines are all very close together. The 10d MA is at 13,479.31. The 50d moving average is at 13,452.07. The 21d exponential moving average is at 13,439.48. Look for the index to stay above these averages and for the 21d EMA to cross above the 50d MA. The lower line of the channel from the March 2020 bottom is around 13,128 for next week. The low of this past week is 12,922.57. Stay above that price to give us a higher low for this week. -=x=-=x=-=x=-=x=-=x=-=x=-=x=- Wrap-up The signals looked good coming into this week and continue to show positive signs for next week. There are certainly a few things we'd like to see to remain confident. For the Nasdaq, clear the 14,000 line and set a new all-time high, joining the other major indexes. That will require big tech and growth stocks to continue to rally. The Russell 2000 is not participating in the rally thus far. Having it break out of the symmetrical triangle and begin moving along with the other indexes will be a positive sign of broad support in the market. There's a lot of be positive about, but don't forget things can always change quickly. Good luck, stay healthy and trade safe!
NASDAQ:IXIC
by drewby4321