Summary: 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.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=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
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
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.
The Russell 2000 (RUT) lost -0.71%, the first decline in four days. The S&P 500 (SPX) declined -0.18%. The Dow Jones Industrial Average (DJI) lost -0.44%.
The VIX volatility gained +4.92%.
Investors moved back into Health (XLV +0.97%) and Utilities (XLU +0.89%), sending them to the top of the sector list. The defensive move is probably to protect against reactions to inflation data on Thursday. Financials (XLF -0.94%) and Industrials (XLI -1.02%) were the bottom sectors. Materials (XLB -0.78%) also was near the bottom of the list. It's looking less likely that Biden's infrastructure plans will move forward as initially presented.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) remained at its current level.
The US 30y and 10y Treasury yields declined for a second day. The 2y yield also fell, but the spread between long-term and short-term yields tightened.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) advanced, Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (Wood) advanced.
Copper (COPPER1!) declined, Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) rose 11.20%. Ethereum (ETHUSD) gained +3.76%. (At the time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.487. 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. Below that level is overly bullish.
The CNN Fear & Greed index is at neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps gained for the day, possibly helped by the lower treasury yields and easing inflation fears. Apple (AAPL) and Amazon (AMZN) could not close above their 50d MA despite gains of +0.31% and +0.52%. Microsoft (MSFT) and Alphabet (GOOGL) advanced +0.40% and are above the key moving average lines.
Novartis (NVS) slipped into the mega-cap list with a 202b market cap after a +2.83% gain today. Also at the top of the list were Pfizer (PFE), Eli Lilly (LLY), Abbvie (ABBV), and Johnson & Johnson (JNJ), all in the Health Sector. Netflix (NFLX), Bank of America (BAC), JP Morgan Chase (JPM), and Alibaba (BABA) were at the bottom of the list.
UP Fintech (TIGR), MongoDB (MDB), SNAP (SNAP), and Moderna (MRNA) topped the daily update growth list. There were more losers than gainers in the growth list. The biggest losers were (RH), Fiverr (FVRR), Ehang Holdings (EH), and FUTU Holdings (FUTU). RH is back up over 6% after hours on a great earnings report.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
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).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index briefly topped 14,000 but then moved lower again.
The five-day trend-line points to a +1.26% gain on Thursday.
The trend-line from the 5/13 low ends with a +0.66% gain.
The one-day trend-line leads to a -0.12% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
So we wait. The consumer price index data will be out in the morning, and investors can decide how bad it looks. We can expect changes in currencies, bonds, and equities depending on the reaction.
Based on the chart and the resistance at 14,000, the expectation is for sideways or lower. If the pricing data does not raise inflation fears, that could be the expectation breaker we need and the catalyst to get the index back up above 14,000.
Stay healthy and trade safe!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=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
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
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.
The Russell 2000 (RUT) lost -0.71%, the first decline in four days. The S&P 500 (SPX) declined -0.18%. The Dow Jones Industrial Average (DJI) lost -0.44%.
The VIX volatility gained +4.92%.
Investors moved back into Health (XLV +0.97%) and Utilities (XLU +0.89%), sending them to the top of the sector list. The defensive move is probably to protect against reactions to inflation data on Thursday. Financials (XLF -0.94%) and Industrials (XLI -1.02%) were the bottom sectors. Materials (XLB -0.78%) also was near the bottom of the list. It's looking less likely that Biden's infrastructure plans will move forward as initially presented.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) remained at its current level.
The US 30y and 10y Treasury yields declined for a second day. The 2y yield also fell, but the spread between long-term and short-term yields tightened.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) advanced, Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (Wood) advanced.
Copper (COPPER1!) declined, Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) rose 11.20%. Ethereum (ETHUSD) gained +3.76%. (At the time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.487. 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. Below that level is overly bullish.
The CNN Fear & Greed index is at neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps gained for the day, possibly helped by the lower treasury yields and easing inflation fears. Apple (AAPL) and Amazon (AMZN) could not close above their 50d MA despite gains of +0.31% and +0.52%. Microsoft (MSFT) and Alphabet (GOOGL) advanced +0.40% and are above the key moving average lines.
Novartis (NVS) slipped into the mega-cap list with a 202b market cap after a +2.83% gain today. Also at the top of the list were Pfizer (PFE), Eli Lilly (LLY), Abbvie (ABBV), and Johnson & Johnson (JNJ), all in the Health Sector. Netflix (NFLX), Bank of America (BAC), JP Morgan Chase (JPM), and Alibaba (BABA) were at the bottom of the list.
UP Fintech (TIGR), MongoDB (MDB), SNAP (SNAP), and Moderna (MRNA) topped the daily update growth list. There were more losers than gainers in the growth list. The biggest losers were (RH), Fiverr (FVRR), Ehang Holdings (EH), and FUTU Holdings (FUTU). RH is back up over 6% after hours on a great earnings report.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
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).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The index briefly topped 14,000 but then moved lower again.
The five-day trend-line points to a +1.26% gain on Thursday.
The trend-line from the 5/13 low ends with a +0.66% gain.
The one-day trend-line leads to a -0.12% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
So we wait. The consumer price index data will be out in the morning, and investors can decide how bad it looks. We can expect changes in currencies, bonds, and equities depending on the reaction.
Based on the chart and the resistance at 14,000, the expectation is for sideways or lower. If the pricing data does not raise inflation fears, that could be the expectation breaker we need and the catalyst to get the index back up above 14,000.
Stay healthy and trade safe!
