Trend lines drawn from the 10/30 bottom (61d), 1/22 (5d) and today 1/28 (1d).
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog.
I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time.
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Thursday, January 28, 2021
Facts: +0.50%, Volume lower, Closing range: 11%, Body: 7%
Good: Stayed above yesterday's lows
Bad: Selling in the afternoon, could not hold the morning gains
Highs/Lows: Lower high, higher low
Candle:Long upper wick with thin body at bottom of candle
Advance/Decline: 1.29, more advancing than declining stocks
Indexes: SPX (+0.98%), DJI (+0.99%), RUT (-0.10%), VIX (-18.81%)
Sectors: Financial (XLF +1.86%) and Materials (XLB +1.72%) were top. Real Estate (XLRE +0.27%) and Consumer Discretionary (XLY +0.31%) were bottom.
Expectation: Sideways or Lower
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Market Overview
The Nasdaq tried to have a bullish day but was turned away by the bears in the afternoon. There was still a gain for the day, but if the market was open another hour, that gain might have been wiped out.
The index closed with a +0.50% for the day. The volume was lower than the previous day, but well above the 50d moving average volume. The closing range of 11% and the 7% body with a long upper shadow, is the result of the morning gains being turned into afternoon selling. Still, at the end of the day there were more advancing stocks than declining stocks.
The S&P 500 (SPX) and Dow Jones Industrial (DJI) both gained about 1% but also had long upper shadows. The Russell 2000 (RUT) declined -0.10%.
All sectors had gains for the day. Financial (XLF +1.86%) and Materials (XLB +1.72%) were top. Real Estate (XLRE +0.27%) and Consumer Discretionary (XLY +0.31%) were bottom.
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Economic Indicators
The US Dollar (DXY) declined -0.21% for the day. US 30y, 10y and 2y treasury bond yields all gained for the day. High Yields Corporate bond (HYG) prices recovered from yesterday's dip.
Silver (SILVER) had a huge 4.99% gain while Gold (GOLD) moved sideways. Crude Oil (CRUDEOIL1!) futures declined. Timber (WOOD) advanced. Copper (COPPER1!) also advanced while Aluminum (ALI1!) declined.
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Investor Sentiment
The put/call ratio declined to 0.561. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The NAAIM exposure index dropped back to 83.51 from the very high level of 112.93 last week.
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Market Leaders
Microsoft led the four biggest mega-caps with a +2.59% gain and a new all-time high. Alphabet (GOOGL) ended the day with a +1.88% gain. Amazon (AMZN) gained +0.16%. Apple (AAPL) was the only loser of the four with a decline of -3.50%.
Comcast (CMCSA) gained +6.57% after beating expectations in their pre-market earnings announcement. and Walt Disney (DIS +5.43%) led the for mega-caps. Tesla (TSLA -3.32%) joined Apple at the bottom of the mega-cap list.
Many growth stocks did well for the day. Penn National Gaming (PENN) was a big winner with a +9.55% gain. Square (SQ) had a +8.62% gain as it tries to reverse a recent downtrend. SNAP (SNAP +8.54%) also had a big gain. Beyond Meat (BYND), Sumo Logic (SUMO) and Palantir (PLTR) gave up some of the recent gains with losses from 6-9%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Before market open tomorrow, updates for consumer price index data, personal spending and employment cost will be released. The data can be important to understanding the degree of inflation, but also whether there will be more or less pressures on consumers in the near term. For example, higher price index data with lower employment cost would show more pressure and maybe confirmed in the personal spending data and the consumer sentiment data to be release after market open.
Pending Homes Sales will also be released after market open.
Eli Lilly (LLY), Chevron (CVX) and Honeywell (HON) top the list of large companies releasing earnings before market open tomorrow.
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Trends, Support and Resistance
All three trend lines are pointing to a gain tomorrow. The long-term trend from the 10/30 bottom points toa +2.32% gain. The one-day trend points to a +1.25% while the five-day trend is pointing to a +0.44% gain.
On the downside, the 21d EMA is right under yesterday's low and could offer support for tomorrow. That's around a -1.10% decline.
In addition to the 21d EMA, the previous two week's highs around 13,200 acted as support after the index closed last week's gap up. Beyond that, 13,000 support seemed to hold up well. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It seemed a bit of a stalling day for the index as it made gains through the morning and early afternoon only to give up those gains in the late afternoon. It was good to stay above yesterday's lows, but the index was not able to make a new high today.
The inside day with the long-upper wick sets and expectation for another sideways or lower move tomorrow. However, the index could also find support at the 21d EMA and bounce the other direction. The regression trend-lines that I use all point to gains.
Stay healthy and take care!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or and corrected inline in my blog.
I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Thursday, January 28, 2021
Facts: +0.50%, Volume lower, Closing range: 11%, Body: 7%
Good: Stayed above yesterday's lows
Bad: Selling in the afternoon, could not hold the morning gains
Highs/Lows: Lower high, higher low
Candle:Long upper wick with thin body at bottom of candle
Advance/Decline: 1.29, more advancing than declining stocks
Indexes: SPX (+0.98%), DJI (+0.99%), RUT (-0.10%), VIX (-18.81%)
Sectors: Financial (XLF +1.86%) and Materials (XLB +1.72%) were top. Real Estate (XLRE +0.27%) and Consumer Discretionary (XLY +0.31%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The Nasdaq tried to have a bullish day but was turned away by the bears in the afternoon. There was still a gain for the day, but if the market was open another hour, that gain might have been wiped out.
The index closed with a +0.50% for the day. The volume was lower than the previous day, but well above the 50d moving average volume. The closing range of 11% and the 7% body with a long upper shadow, is the result of the morning gains being turned into afternoon selling. Still, at the end of the day there were more advancing stocks than declining stocks.
The S&P 500 (SPX) and Dow Jones Industrial (DJI) both gained about 1% but also had long upper shadows. The Russell 2000 (RUT) declined -0.10%.
All sectors had gains for the day. Financial (XLF +1.86%) and Materials (XLB +1.72%) were top. Real Estate (XLRE +0.27%) and Consumer Discretionary (XLY +0.31%) were bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.21% for the day. US 30y, 10y and 2y treasury bond yields all gained for the day. High Yields Corporate bond (HYG) prices recovered from yesterday's dip.
Silver (SILVER) had a huge 4.99% gain while Gold (GOLD) moved sideways. Crude Oil (CRUDEOIL1!) futures declined. Timber (WOOD) advanced. Copper (COPPER1!) also advanced while Aluminum (ALI1!) declined.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.561. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The NAAIM exposure index dropped back to 83.51 from the very high level of 112.93 last week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Microsoft led the four biggest mega-caps with a +2.59% gain and a new all-time high. Alphabet (GOOGL) ended the day with a +1.88% gain. Amazon (AMZN) gained +0.16%. Apple (AAPL) was the only loser of the four with a decline of -3.50%.
Comcast (CMCSA) gained +6.57% after beating expectations in their pre-market earnings announcement. and Walt Disney (DIS +5.43%) led the for mega-caps. Tesla (TSLA -3.32%) joined Apple at the bottom of the mega-cap list.
Many growth stocks did well for the day. Penn National Gaming (PENN) was a big winner with a +9.55% gain. Square (SQ) had a +8.62% gain as it tries to reverse a recent downtrend. SNAP (SNAP +8.54%) also had a big gain. Beyond Meat (BYND), Sumo Logic (SUMO) and Palantir (PLTR) gave up some of the recent gains with losses from 6-9%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Before market open tomorrow, updates for consumer price index data, personal spending and employment cost will be released. The data can be important to understanding the degree of inflation, but also whether there will be more or less pressures on consumers in the near term. For example, higher price index data with lower employment cost would show more pressure and maybe confirmed in the personal spending data and the consumer sentiment data to be release after market open.
Pending Homes Sales will also be released after market open.
Eli Lilly (LLY), Chevron (CVX) and Honeywell (HON) top the list of large companies releasing earnings before market open tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
All three trend lines are pointing to a gain tomorrow. The long-term trend from the 10/30 bottom points toa +2.32% gain. The one-day trend points to a +1.25% while the five-day trend is pointing to a +0.44% gain.
On the downside, the 21d EMA is right under yesterday's low and could offer support for tomorrow. That's around a -1.10% decline.
In addition to the 21d EMA, the previous two week's highs around 13,200 acted as support after the index closed last week's gap up. Beyond that, 13,000 support seemed to hold up well. The index also held the 12,550 area recently. If it passes that area, the next support area is 12,250.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It seemed a bit of a stalling day for the index as it made gains through the morning and early afternoon only to give up those gains in the late afternoon. It was good to stay above yesterday's lows, but the index was not able to make a new high today.
The inside day with the long-upper wick sets and expectation for another sideways or lower move tomorrow. However, the index could also find support at the 21d EMA and bounce the other direction. The regression trend-lines that I use all point to gains.
Stay healthy and take care!
