Daily Market Update for 12/4
Trend lines drawn from the 10/30 bottom (25d), 11/30 (5d), and today 12/3 (1d).
If you have ideas to make the daily update better, please let me know in the comments.
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.
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Friday, December 4, 2020
So look at me now
I'm just makin' my play
Facts: +0.70%, Volume lower, Closing range: 100%, Body: 74%
Good: Close at 100% CR with new all-time high
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: No upper wick, tiny lower wick
Advance/Decline: 2.31, more than two advancing stocks for every declining stocks
Sectors: Energy (XLE +5.45%) and Materials (XLB +2.02%) were the leading sectors. Utilities (XLU -1.00%) was the only sector with losses.
Expectation: Higher
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Market Overview
What is a great way to end a week? Closing at the top of the trading range with a new all-time high. The Nasdaq opened and climbed throughout the morning, shrugging off bad news on employment numbers and rising on hopes for a completed stimulus bill. There was a small pullback in the afternoon but nothing could hold the index back as it climbed to a new all-time high. The index closed with a +0.70% gain on lower volume. The 100% closing range with a 74% green body represents a very bullish day. It was also broad with two advancing stocks for every declining stock.
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Indexes and Sectors
The Russell 2000 (RUT +2.37%) had the best showing of the day while the S&P 500 (+0.88%) and Dow Jones Industrial (DJI +0.83%) also had very bullish days. All three of these indexes have candles with 100% body, no upper or lower wicks.
Energy (XLE +5.45%) soared on news that OPEC finally came to an agreement on oil production after many days of discussion. Materials (XLB +2.02%) was the next highest performing sector for the day. All sectors except Utilities (XLU -1.00%) had gains for the day. XLU tends to be a defensive play for investors and it did see a slight uptick at the end of the day as money moved into the safer bet for the weekend.
The VIX volatility index dropped by -2.30%, reversing a previous three-day climb. Yesterday, it had touched the top line of a downward channel that is nearly three weeks long.
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Market Indicators
US30Y and US10Y bond yields rose for the day and the US30Y-US10Y and US10Y-US02Y spreads both widened. Yields rise when investors exit bonds, signaling optimism for riskier markets.
Corporate Bond yields dropped while short term treasury bond yields rose for another day. The tightening spread between these bond types show investors are comfortable with corporations being able to survive any economic challenges and pay back debts in the future.
The US dollar (DXY +0.13%) rose for the day. It is currently at a level not seen since April 2018.
Silver (SILVER +0.65%) rose while Gold (GOLD -0.11%) fell back for the day. Crude Oil Futures (CRUDEOIL1! +0.77%) rose for the day, putting in three consecutive days of gains. Timber (WOOD +1.33%) rose for the day. Aluminum (ALI1! +0.98%) rebounded from yesterdays loss.
The put/call ratio remained at 0.500, still showing overly bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
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Market Leaders
The big four mega-caps underperformed the market for the day with Microsoft (MSFT +0.6%) and Alphabet (+0.11%) ending the day with modest gains. Apple (AAPL -0.56%) and Amazon (AMZN -0.76%) ended the day with losses. Microsoft dropped below its 21d EMA to test the 50d MA once again but recovered and closed above the 21d EMA. Amazon closed below both key moving average lines that typically show support or resistance on price movement. Apple and Google are trading well above these lines.
Most mega-caps ended the day with gains. Taiwan Semiconductor (TSM +4.25%) was the top performing mega-cap with Mastercard (MA +2.75%) and Visa (+2.23%) following behind in 2nd and 3rd place. Salesforce (CRM +2.21%) is attempting a recovery from losses earlier in the week after their earnings release.
Popular growth stocks had a mixed day with top gainers offsetting those with losses. PagerDuty (PD +26.21%) had a huge gain after an earnings beat. Snowflake (SNOW +14.07%) put in another huge gain after yesterday’s 16% gain. DocuSign (DOCU +5.29%) and Cloudera (+7.17%) also had gains for the day after their earnings and outlook topped analyst expectations. Marvell (MRVL -4.70%) disappointed investors with their earnings release.
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Looking ahead
There are no major economic news events scheduled for Monday.
Coupa Software (COUP -0.32%) will announce earnings after market close.
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Trends, Support and Resistance
The five-day trend line is pointing to a +070% gain. The one-day trend line and longer trend line from the 10/30 bottom are both pointing to a +0.22% gain.
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Wrap-up
The market did not seem concerned with the declining pace of new jobs being added to the market, although it was all over the headlines. Perhaps it is the confidence that a stimulus will soon be here to help with unemployment. Or it could be the OPEC agreement and boost to Energy had a momentum impact on the other sectors. Or it could just be the market being the market.
Have a great weekend and take care!
If you have ideas to make the daily update better, please let me know in the comments.
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.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Friday, December 4, 2020
So look at me now
I'm just makin' my play
Facts: +0.70%, Volume lower, Closing range: 100%, Body: 74%
Good: Close at 100% CR with new all-time high
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: No upper wick, tiny lower wick
Advance/Decline: 2.31, more than two advancing stocks for every declining stocks
Sectors: Energy (XLE +5.45%) and Materials (XLB +2.02%) were the leading sectors. Utilities (XLU -1.00%) was the only sector with losses.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
What is a great way to end a week? Closing at the top of the trading range with a new all-time high. The Nasdaq opened and climbed throughout the morning, shrugging off bad news on employment numbers and rising on hopes for a completed stimulus bill. There was a small pullback in the afternoon but nothing could hold the index back as it climbed to a new all-time high. The index closed with a +0.70% gain on lower volume. The 100% closing range with a 74% green body represents a very bullish day. It was also broad with two advancing stocks for every declining stock.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The Russell 2000 (RUT +2.37%) had the best showing of the day while the S&P 500 (+0.88%) and Dow Jones Industrial (DJI +0.83%) also had very bullish days. All three of these indexes have candles with 100% body, no upper or lower wicks.
Energy (XLE +5.45%) soared on news that OPEC finally came to an agreement on oil production after many days of discussion. Materials (XLB +2.02%) was the next highest performing sector for the day. All sectors except Utilities (XLU -1.00%) had gains for the day. XLU tends to be a defensive play for investors and it did see a slight uptick at the end of the day as money moved into the safer bet for the weekend.
The VIX volatility index dropped by -2.30%, reversing a previous three-day climb. Yesterday, it had touched the top line of a downward channel that is nearly three weeks long.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
US30Y and US10Y bond yields rose for the day and the US30Y-US10Y and US10Y-US02Y spreads both widened. Yields rise when investors exit bonds, signaling optimism for riskier markets.
Corporate Bond yields dropped while short term treasury bond yields rose for another day. The tightening spread between these bond types show investors are comfortable with corporations being able to survive any economic challenges and pay back debts in the future.
The US dollar (DXY +0.13%) rose for the day. It is currently at a level not seen since April 2018.
Silver (SILVER +0.65%) rose while Gold (GOLD -0.11%) fell back for the day. Crude Oil Futures (CRUDEOIL1! +0.77%) rose for the day, putting in three consecutive days of gains. Timber (WOOD +1.33%) rose for the day. Aluminum (ALI1! +0.98%) rebounded from yesterdays loss.
The put/call ratio remained at 0.500, still showing overly bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The big four mega-caps underperformed the market for the day with Microsoft (MSFT +0.6%) and Alphabet (+0.11%) ending the day with modest gains. Apple (AAPL -0.56%) and Amazon (AMZN -0.76%) ended the day with losses. Microsoft dropped below its 21d EMA to test the 50d MA once again but recovered and closed above the 21d EMA. Amazon closed below both key moving average lines that typically show support or resistance on price movement. Apple and Google are trading well above these lines.
Most mega-caps ended the day with gains. Taiwan Semiconductor (TSM +4.25%) was the top performing mega-cap with Mastercard (MA +2.75%) and Visa (+2.23%) following behind in 2nd and 3rd place. Salesforce (CRM +2.21%) is attempting a recovery from losses earlier in the week after their earnings release.
Popular growth stocks had a mixed day with top gainers offsetting those with losses. PagerDuty (PD +26.21%) had a huge gain after an earnings beat. Snowflake (SNOW +14.07%) put in another huge gain after yesterday’s 16% gain. DocuSign (DOCU +5.29%) and Cloudera (+7.17%) also had gains for the day after their earnings and outlook topped analyst expectations. Marvell (MRVL -4.70%) disappointed investors with their earnings release.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
There are no major economic news events scheduled for Monday.
Coupa Software (COUP -0.32%) will announce earnings after market close.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line is pointing to a +070% gain. The one-day trend line and longer trend line from the 10/30 bottom are both pointing to a +0.22% gain.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The market did not seem concerned with the declining pace of new jobs being added to the market, although it was all over the headlines. Perhaps it is the confidence that a stimulus will soon be here to help with unemployment. Or it could be the OPEC agreement and boost to Energy had a momentum impact on the other sectors. Or it could just be the market being the market.
Have a great weekend and take care!
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