Trend lines drawn from the 10/12 pivot day (23d), 10/30 bottom (9d), 11/5 (5d), and today 11/11 (1d).
I am making some changes to the chart presentation and renaming the series to reflect the other data points I'm including. Still based out of the Nasdaq composite.
I do occasionally have some errors or typos and will correct them in my blog or check the comments on TradingView. I don’t have an editor and do this in my free time.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, November 11, 2020
Whatever it takes
'Cause I love the adrenaline in my veins
Facts: +2.01% higher, Volume lower, Closing range: 95%, Body: 84%
Good: Up the whole day, closed near highs
Bad: Lower volume
Highs/Lows: Higher high, higher low
Candle: Very tiny wicks, sold green body
Advance/Decline: 1.30, a ratio of about 4:3 advancing to declining stocks
Sectors: Technology (XLK +2.37%) far above the others. Energy (XLE -1.03%) and Materials (XLB -1.49%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
As rotations often go, the move earlier this week into Energy, Transportation and Leisure stocks was a bit too far and needed to swing back the other way. The Nasdaq benefited from that swing back to Technology stocks which are still in-play until the pandemic is truly behind us. The index is up +2.01% today and moved upward almost the entire day, ending the day with a 95% closing range and 85% green body. Volume was lower than the previous days and fell below the 50d average volume. The positive day was a pleasant surprise after the past two days, but I think we can expect more of the unexpected in coming days and weeks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The S&P 500 (SPX +0.77%) had a positive inside day ending with gains. An inside day is when the high and low is within the prior days high and low. The day fits within the past two days that have opened and closed within a 1% range in the index. The Dow Jones Industrial average (DJI -0.08%) had a small loss but is also within a tight open/close range for this week. The Russell 2000 (RUT -0.00%) ended the day flat but with a candle that looks like a top signal, to be confirmed later this week.
Technology (XLK +2.37%) clearly had everyone’s attention today as traders moved back into stocks that have done well during the pandemic. Communications (XLC +0.91%) followed with a far second and close to several other sectors ending positive on the day. Energy (XLE -1.03%) and Materials (XLB -1.49%) were the losing sectors of the day as investors took profits and rotated back to tech. Financials (XLF -0.41%) and Industrials (XLI -0.84%) were also down after gains earlier this week.
The VIX volatility index decreased -5.44% for the day and had the lowest close since early September.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Bonds, Forex and Commodities
Treasury Bond yields decreased for the day. The 10Y-2Y spread also decreased, but not so much to cause alarm. The spread, an indicator of investors’ confidence in the economy, is still at its highest point since February of 2018.
The US dollar (DXY +0.32%) strengthened, also signaling investors’ confidence in economic recovery.
A decrease in the value of Gold (GOLD -0.63%) is not unexpected when the value of the US dollar increases. Silver (SILVER +0.16%) remained about the same. Timber (WOOD +0.73%) is at its highest point since 2018.
Crude Oil futures (CRUDEOIL +1.90%) is up over 15% since the start of November and had increases today despite OPEC projecting weaker demand thru 2021. The worsening projection was not a surprise to investors.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The big four mega-caps all reversed off losses yesterday to close with gains today. Apple (AAPL +3.04%), Microsoft (MSFT +2.63%) and Amazon (AMZN +3.37%) all outperformed the index from open to close. Google (GOOG +0.71%) continues to move sideways after several weeks of growth. Only Amazon remains below the key 21d EMA and 50d MA lines which can act as resistance as well as support. The rest of the mega-caps faired well, except for those who benefited from the rotation earlier in the week. Investors took profits from mega-cap stocks in Financials and Consumer Staples.
Many growth stocks had gains today, but any excitement needs to be tempered with the losses they incurred on Monday and Tuesday. Fiverr International (FVRR +17.66%) had a big gain but is still down -15% for the week. Nvidia (NVDA +5.07%) is up today but still down -8% for the week. Pinterest (PINS +6.97%) is also up for the day but remains down -8% for the week. That list can go on and on.
Datadog (DDOG -6.23%) is down after beating expectations but not impressing investors enough to stick with the stock. GrowGeneration (GRWG +7.77%) met earnings expectations and is up 7% in afterhours trading.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Farfetch (FTCH +3.88%), Globant (GLOB -1.85%) and Wix.com (WIX +10.49%), Applied Materials (AMAT +2.55%) are among earnings releases for tomorrow.
On the economic news calendar, Consumer Price Index data, Initial Jobless Claims and Crude Oil Inventories will be announced tomorrow. Expect Consumer Price Index is projected to remain about the same. Initial Jobless Claims are expected to be lower from last week. Crude Oil Inventories are expected to be negative after a big surprise decrease last week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The trend from the 10/30 bottom is pointing to a +3.12% increase for tomorrow, taking the index back to all-time highs. A more modest gain would be following today’s one-day trend line that would result in a +0.55% gain, a sideways move considering the trading range over the past week.
The five-day trend line is pointing to a -1.50% loss while the longer-term trend line from the 10/12 pivot day is pointing to a -2.95% loss. The latter would be just below the 21d EMA.
It is worth noting that the Nasdaq is forming an ascending triangle on the index daily chart. A pattern is just a pattern and does not necessarily predict anything. There is a lot that can disrupt expectations from the unfinalized election to the unknowns the pandemic and vaccine timing. However, if the pattern does play out, it’s showing consolidation before the market can move higher. If that is true, there is a good chance for the index to revisit the bottom of the ascending triangle. I added a line on the chart for the bottom of the triangle. The top is same as the all-time high line.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Lots to absorb in the past two weeks. I know personally I would like to see a direction for the market, and I imagine most investors are in the same boat. If it wants to go up, great. If it wants to go down, also great. But the back and forth, stock rotations, news impacts can all be very tiring and demoralizing.
Keep your spirits up and know you are not alone. With a little luck, you have been turning a profit. If not, there will be future profits to be had.
Take care!
I am making some changes to the chart presentation and renaming the series to reflect the other data points I'm including. Still based out of the Nasdaq composite.
I do occasionally have some errors or typos and will correct them in my blog or check the comments on TradingView. I don’t have an editor and do this in my free time.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wednesday, November 11, 2020
Whatever it takes
'Cause I love the adrenaline in my veins
Facts: +2.01% higher, Volume lower, Closing range: 95%, Body: 84%
Good: Up the whole day, closed near highs
Bad: Lower volume
Highs/Lows: Higher high, higher low
Candle: Very tiny wicks, sold green body
Advance/Decline: 1.30, a ratio of about 4:3 advancing to declining stocks
Sectors: Technology (XLK +2.37%) far above the others. Energy (XLE -1.03%) and Materials (XLB -1.49%) at the bottom.
Expectation: Sideways
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
As rotations often go, the move earlier this week into Energy, Transportation and Leisure stocks was a bit too far and needed to swing back the other way. The Nasdaq benefited from that swing back to Technology stocks which are still in-play until the pandemic is truly behind us. The index is up +2.01% today and moved upward almost the entire day, ending the day with a 95% closing range and 85% green body. Volume was lower than the previous days and fell below the 50d average volume. The positive day was a pleasant surprise after the past two days, but I think we can expect more of the unexpected in coming days and weeks.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Indexes and Sectors
The S&P 500 (SPX +0.77%) had a positive inside day ending with gains. An inside day is when the high and low is within the prior days high and low. The day fits within the past two days that have opened and closed within a 1% range in the index. The Dow Jones Industrial average (DJI -0.08%) had a small loss but is also within a tight open/close range for this week. The Russell 2000 (RUT -0.00%) ended the day flat but with a candle that looks like a top signal, to be confirmed later this week.
Technology (XLK +2.37%) clearly had everyone’s attention today as traders moved back into stocks that have done well during the pandemic. Communications (XLC +0.91%) followed with a far second and close to several other sectors ending positive on the day. Energy (XLE -1.03%) and Materials (XLB -1.49%) were the losing sectors of the day as investors took profits and rotated back to tech. Financials (XLF -0.41%) and Industrials (XLI -0.84%) were also down after gains earlier this week.
The VIX volatility index decreased -5.44% for the day and had the lowest close since early September.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Bonds, Forex and Commodities
Treasury Bond yields decreased for the day. The 10Y-2Y spread also decreased, but not so much to cause alarm. The spread, an indicator of investors’ confidence in the economy, is still at its highest point since February of 2018.
The US dollar (DXY +0.32%) strengthened, also signaling investors’ confidence in economic recovery.
A decrease in the value of Gold (GOLD -0.63%) is not unexpected when the value of the US dollar increases. Silver (SILVER +0.16%) remained about the same. Timber (WOOD +0.73%) is at its highest point since 2018.
Crude Oil futures (CRUDEOIL +1.90%) is up over 15% since the start of November and had increases today despite OPEC projecting weaker demand thru 2021. The worsening projection was not a surprise to investors.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
The big four mega-caps all reversed off losses yesterday to close with gains today. Apple (AAPL +3.04%), Microsoft (MSFT +2.63%) and Amazon (AMZN +3.37%) all outperformed the index from open to close. Google (GOOG +0.71%) continues to move sideways after several weeks of growth. Only Amazon remains below the key 21d EMA and 50d MA lines which can act as resistance as well as support. The rest of the mega-caps faired well, except for those who benefited from the rotation earlier in the week. Investors took profits from mega-cap stocks in Financials and Consumer Staples.
Many growth stocks had gains today, but any excitement needs to be tempered with the losses they incurred on Monday and Tuesday. Fiverr International (FVRR +17.66%) had a big gain but is still down -15% for the week. Nvidia (NVDA +5.07%) is up today but still down -8% for the week. Pinterest (PINS +6.97%) is also up for the day but remains down -8% for the week. That list can go on and on.
Datadog (DDOG -6.23%) is down after beating expectations but not impressing investors enough to stick with the stock. GrowGeneration (GRWG +7.77%) met earnings expectations and is up 7% in afterhours trading.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Farfetch (FTCH +3.88%), Globant (GLOB -1.85%) and Wix.com (WIX +10.49%), Applied Materials (AMAT +2.55%) are among earnings releases for tomorrow.
On the economic news calendar, Consumer Price Index data, Initial Jobless Claims and Crude Oil Inventories will be announced tomorrow. Expect Consumer Price Index is projected to remain about the same. Initial Jobless Claims are expected to be lower from last week. Crude Oil Inventories are expected to be negative after a big surprise decrease last week.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The trend from the 10/30 bottom is pointing to a +3.12% increase for tomorrow, taking the index back to all-time highs. A more modest gain would be following today’s one-day trend line that would result in a +0.55% gain, a sideways move considering the trading range over the past week.
The five-day trend line is pointing to a -1.50% loss while the longer-term trend line from the 10/12 pivot day is pointing to a -2.95% loss. The latter would be just below the 21d EMA.
It is worth noting that the Nasdaq is forming an ascending triangle on the index daily chart. A pattern is just a pattern and does not necessarily predict anything. There is a lot that can disrupt expectations from the unfinalized election to the unknowns the pandemic and vaccine timing. However, if the pattern does play out, it’s showing consolidation before the market can move higher. If that is true, there is a good chance for the index to revisit the bottom of the ascending triangle. I added a line on the chart for the bottom of the triangle. The top is same as the all-time high line.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Lots to absorb in the past two weeks. I know personally I would like to see a direction for the market, and I imagine most investors are in the same boat. If it wants to go up, great. If it wants to go down, also great. But the back and forth, stock rotations, news impacts can all be very tiring and demoralizing.
Keep your spirits up and know you are not alone. With a little luck, you have been turning a profit. If not, there will be future profits to be had.
Take care!
