Daily Market Update for 12/17
Trend lines drawn from the 10/30 bottom (34d), 12/11 (5d) and today 12/17 (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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Thursday, December 17, 2020
Well, I see you got your
Brand new leopard-skin pillbox hat
Facts: +0.84%, Volume higher, Closing range: 99%, Body: 49%
Good: HH/HL, upper half of candle is green body, closing at the high
Bad: Small gap up
Highs/Lows: Higher high, Higher low
Candle: Upper half of candle all green body, no top wick.
Advance/Decline: 2.11, two advancing stocks for every declining stock
Sectors: Real Estate (XLR +1.17%) and Materials (XLB +1.15%) were top sectors. Communications (XLC -0.25%) and Energy (XLE -0.47%) were the only losing sectors.
Expectation: Sideways or Higher
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Market Overview
The market opened up on mixed good and bad economic news. Building Permits and Housing Starts were both higher than anticipated, giving momentum to the Real Estate and Materials sectors. Broader market excitement was dampened by a higher than expected Initial Jobless Claims report. Investors shrugged off the news by noon and markets rose in anticipation of a stimulus deal. The Nasdaq closed at another new all-time high, rising +0.84% on higher volume. The closing range of 99% and a green 49% body in the upper half of the candle represent the morning selling turning to afternoon buying. There were two advancing stocks for every declining stock and 209 stocks with new all-time highs on the Nasdaq.
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Indexes and Sectors
All major indexes finished the day with gains. The Russell 2000 (RUT +1.30%) was the top performing index again. The S&P 500 (SPX +0.58%) and the Dow Jones Industrial (DJI +0.49%) joined the Russell 2000 and Nasdaq with new all-time highs.
Real Estate (XLRE +1.17%) and Materials (XLB +1.15%) were top sectors, getting a boost from the pre-market New Building Permits and Housing Starts data that exceeded expectations. Health (XLV +1.07%) was also a top performer among the sectors. Utilities (XLU +0.67%) led in the morning, signaling some caution for investors likely following the Initial Jobless Claims report. The only two losing sectors for the day were Communications (XLC -0.25%) and Energy (XLE -0.47%).
The VIX volatility index declined -2.53%.
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Market Indicators
Yields on the US 30y and 10y treasury bonds rose for the day while the 2y treasury bond yield dropped. As a result, the spreads between long term and short term bonds widened.
Corporate bond prices dropped for the day while 3-7 treasury bond prices also dropped. Yields rising. The yield spread is tightening as the yields on corporate bonds rise faster than the short-term treasury bonds. The spread is still trending flat, so not much concern here.
The US dollar (DXY -0.71%) declined for the day. It is right at a support/resistance area from the first quarter of 2018.
Silver (SILVER +2.87%) and Gold (GOLD +1.14%) as the GOLDSILVER ratio continues to decline from a 9/23 pivot. Crude Oil (CRUDEOIL1! +0.77%) gained for the day. Timber (WOOD +1.07%) continues to climb. Copper (COPPER1! +1.13%) gained on the day. Aluminum (ALI1! +0.82%) is attempting to break out of a recent resistance level.
The put/call ratio dropped to 0.507, an overly bullish reading. 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
Apple (AAPL +0.70%) and Microsoft (MSFT +0.06%) both gained for the day, while Amazon (AMZN -0.15%) and Alphabet (GOOGL -0.95%) had losses. All of them underperformed in intraday, having lower closes than opens. Alphabet is the only of the biggest four mega-caps trading under its 21d EMA.
Telsa (TSLA +5.32%) made another new all-time high as it approaches being added to S&P 500. Johnson & Johnson (JNJ +2.64%), PayPal (PYPL +2.64%), and Home Depot (HD +1.62%) were other top performing mega-caps. Taiwan Semiconductor (TSM -1.24%) and AT&T (-2.21%) were a few mega-caps not doing as well.
MongoDB (MDB +10.64%) and Sumo Logic (SUMO +11.83%) were two top performing growth stocks. Digital Turbine (APPS +9.70%) also had a great day. Moderna (MRNA +5.09%) had a decent gain after bouncing off its 21d EMA yesterday.
Jabil (JBL +7.38%) was up after beating quarterly earnings and revenue expectations, the announcement coming before market open. Fedex (FDX +1.19%) also beat expectations after market close today, but did not provide guidance for the full fiscal 2021 year. The stock is down -4% after hours.
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Looking ahead
Additional comments from the FOMC will come late in the morning on Friday. Additional oil data will be released in the afternoon.
The CFTC will release several reports on speculative positions in commodity futures which indicate investor sentiment.
Tomorrow is also a "Quadruple Witching" day, when stock index futures, stock index options, stock options and single stock futures all expire simultaneously. The expiration of contracts and options will result in higher volume and certain issues may even experience price increases/decreases due to the buying and selling required to settle the contracts.
Nike (NKE +1.56%) will announce earnings after market close.
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Trends, Support and Resistance
The five-day trend line points to a +0.73%, while the other trend lines point to a +0.07%.
Look for a possible gap-fill to yesterday's high before the index goes higher.
Any stimulus news could be a catalyst in either direction. Good news is assumed to already be priced in while bad news could cause a significant pullback. Support level is still around 12,250, but looks like a new level could be building at around 12,400-12,450. Another test would confirm that level.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
We never get tired of yet another new all-time high. The fed's promise to continue buying bonds ensures that liquidity will continue in the markets. Never fight the fed is a popular saying. Any bearish moves are likely to meet with support in this environment.
Based on the chart, I have an expectation of Sideways or Higher. But I would not be surprised if we have a small pull back in the next few days. If a larger pullback violated support areas or key moving average lines, then there's reason for concern.
For now, be a happy bull and enjoy the higher highs and higher lows.
Stay healthy 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=-
Thursday, December 17, 2020
Well, I see you got your
Brand new leopard-skin pillbox hat
Facts: +0.84%, Volume higher, Closing range: 99%, Body: 49%
Good: HH/HL, upper half of candle is green body, closing at the high
Bad: Small gap up
Highs/Lows: Higher high, Higher low
Candle: Upper half of candle all green body, no top wick.
Advance/Decline: 2.11, two advancing stocks for every declining stock
Sectors: Real Estate (XLR +1.17%) and Materials (XLB +1.15%) were top sectors. Communications (XLC -0.25%) and Energy (XLE -0.47%) were the only losing sectors.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The market opened up on mixed good and bad economic news. Building Permits and Housing Starts were both higher than anticipated, giving momentum to the Real Estate and Materials sectors. Broader market excitement was dampened by a higher than expected Initial Jobless Claims report. Investors shrugged off the news by noon and markets rose in anticipation of a stimulus deal. The Nasdaq closed at another new all-time high, rising +0.84% on higher volume. The closing range of 99% and a green 49% body in the upper half of the candle represent the morning selling turning to afternoon buying. There were two advancing stocks for every declining stock and 209 stocks with new all-time highs on the Nasdaq.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
All major indexes finished the day with gains. The Russell 2000 (RUT +1.30%) was the top performing index again. The S&P 500 (SPX +0.58%) and the Dow Jones Industrial (DJI +0.49%) joined the Russell 2000 and Nasdaq with new all-time highs.
Real Estate (XLRE +1.17%) and Materials (XLB +1.15%) were top sectors, getting a boost from the pre-market New Building Permits and Housing Starts data that exceeded expectations. Health (XLV +1.07%) was also a top performer among the sectors. Utilities (XLU +0.67%) led in the morning, signaling some caution for investors likely following the Initial Jobless Claims report. The only two losing sectors for the day were Communications (XLC -0.25%) and Energy (XLE -0.47%).
The VIX volatility index declined -2.53%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Indicators
Yields on the US 30y and 10y treasury bonds rose for the day while the 2y treasury bond yield dropped. As a result, the spreads between long term and short term bonds widened.
Corporate bond prices dropped for the day while 3-7 treasury bond prices also dropped. Yields rising. The yield spread is tightening as the yields on corporate bonds rise faster than the short-term treasury bonds. The spread is still trending flat, so not much concern here.
The US dollar (DXY -0.71%) declined for the day. It is right at a support/resistance area from the first quarter of 2018.
Silver (SILVER +2.87%) and Gold (GOLD +1.14%) as the GOLDSILVER ratio continues to decline from a 9/23 pivot. Crude Oil (CRUDEOIL1! +0.77%) gained for the day. Timber (WOOD +1.07%) continues to climb. Copper (COPPER1! +1.13%) gained on the day. Aluminum (ALI1! +0.82%) is attempting to break out of a recent resistance level.
The put/call ratio dropped to 0.507, an overly bullish reading. 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
Apple (AAPL +0.70%) and Microsoft (MSFT +0.06%) both gained for the day, while Amazon (AMZN -0.15%) and Alphabet (GOOGL -0.95%) had losses. All of them underperformed in intraday, having lower closes than opens. Alphabet is the only of the biggest four mega-caps trading under its 21d EMA.
Telsa (TSLA +5.32%) made another new all-time high as it approaches being added to S&P 500. Johnson & Johnson (JNJ +2.64%), PayPal (PYPL +2.64%), and Home Depot (HD +1.62%) were other top performing mega-caps. Taiwan Semiconductor (TSM -1.24%) and AT&T (-2.21%) were a few mega-caps not doing as well.
MongoDB (MDB +10.64%) and Sumo Logic (SUMO +11.83%) were two top performing growth stocks. Digital Turbine (APPS +9.70%) also had a great day. Moderna (MRNA +5.09%) had a decent gain after bouncing off its 21d EMA yesterday.
Jabil (JBL +7.38%) was up after beating quarterly earnings and revenue expectations, the announcement coming before market open. Fedex (FDX +1.19%) also beat expectations after market close today, but did not provide guidance for the full fiscal 2021 year. The stock is down -4% after hours.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Additional comments from the FOMC will come late in the morning on Friday. Additional oil data will be released in the afternoon.
The CFTC will release several reports on speculative positions in commodity futures which indicate investor sentiment.
Tomorrow is also a "Quadruple Witching" day, when stock index futures, stock index options, stock options and single stock futures all expire simultaneously. The expiration of contracts and options will result in higher volume and certain issues may even experience price increases/decreases due to the buying and selling required to settle the contracts.
Nike (NKE +1.56%) will announce earnings after market close.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line points to a +0.73%, while the other trend lines point to a +0.07%.
Look for a possible gap-fill to yesterday's high before the index goes higher.
Any stimulus news could be a catalyst in either direction. Good news is assumed to already be priced in while bad news could cause a significant pullback. Support level is still around 12,250, but looks like a new level could be building at around 12,400-12,450. Another test would confirm that level.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
We never get tired of yet another new all-time high. The fed's promise to continue buying bonds ensures that liquidity will continue in the markets. Never fight the fed is a popular saying. Any bearish moves are likely to meet with support in this environment.
Based on the chart, I have an expectation of Sideways or Higher. But I would not be surprised if we have a small pull back in the next few days. If a larger pullback violated support areas or key moving average lines, then there's reason for concern.
For now, be a happy bull and enjoy the higher highs and higher lows.
Stay healthy and take care!
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