Daily Market Update for 8/16
Summary: Investors sold off equities in the morning and then seemingly decided there was nowhere else to put the money and bought back assets in the afternoon. Capital moved back into the market, mostly into defensive sectors, sending the S&P 500 and Dow Jones Industrial (DJI) to another set of records.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Monday, August 16, 2021
Facts: -0.20%, Volume lower, Closing range: 100%, Body: 12%
Good: Volume lower on retreat, high closing range
Bad: Long lower wick pierced through 21d EMA
Highs/Lows: Lower high, lower low
Candle: Hanging man, small body above long lower wick within uptrend
Advanced/Decline: 0.31, more than three declining stocks for every advancing stock
Indexes: SPX (+0.26%), DJI (+0.31%), RUT (-0.89%), VIX (+4.20%)
Sectors: Health (XLV +1.14%) and Utilities (XLU +0.61%)
at the top. Materials (XLB -0.50%) and Energy (XLE -1.84%) at the bottom.
Expectation: Sideways or Lower
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Market Overview
Investors sold off equities in the morning and then seemingly decided there was nowhere else to put the money and bought back assets in the afternoon. Capital moved back into the market, mostly into defensive sectors, sending the S&P 500 and Dow Jones Industrial (DJI) to another set of records.
The Nasdaq closed with a decline of -0.20% after dipping more than 1.4% in the morning. Volume was lower than the previous day. The thin body above a long lower wick creates a hanging man candlestick within an uptrend. The closing range of 100% shows bulls kept up the buying into close. Still, there were more than three declining stocks for every advancing stock for the day.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) had their fifth consecutive record close day. The S&P 500 gained +0.26% while the Dow Jones advanced +0.31%. The Russell 2000 (RUT) declined -0.89%
The VIX volatility index advanced +4.20%.
The defensive sectors topped the sector list again today. Health (XLV +1.14%) and Utilities (XLU +0.61%) were the best sectors of the day. At the bottom of the sector list are Materials (XLB -0.50%) and Energy (XLE -1.84%).
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Economic Indicators
The NY Empire State Manufacturing Index came in much lower than expected, showing a slowdown in US manufacturing activity. The more important data came from China which showed a considerable slowdown in Retail Sales and Industrial Production.
The US Dollar (DXY) advanced +0.10%.
The US 30y and 10y Treasury Yields declined while the 2y Treasury Yield rose.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced another day.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) declined.
Copper (COPPER1!) declined, and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -2.09%. Ethereum (ETHUSD) declined -4.57%. (Time of writing)
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Market Leaders
All four of the largest mega-caps gained today, helping bring the indexes back from the morning dip. Apple (AAPL) advanced +1.35%. Microsoft (MSFT) rose +0.60%. Alphabet (GOOGL) gained +0.42%. Amazon (AMZN) dipped below its 200d moving average line but recovered to gain +0.15% by the end of the day.
Eli Lilly (LLY), United Health (UNH), Thermo Fisher Scientific (TMO), and AbbVie (ABBV) were the top mega-caps for the day, all gaining over 1.5%. Tesla (TSLA) was at the bottom of the list with a -4.32% decline after the US opened a safety investigation into their Autopilot system. Also at the bottom of the mega-cap list are Alibaba (BABA), Wells Fargo (WFC), and Exxon Mobil (XOM).
Only a handful of stocks in the daily update growth list gained for the day. Top gainers were PayCom (PAYC), PayPal (PYPL), Facebook (FB), and D.R. Horton (DHI). The biggest losers included Chinese stocks NIO (NIO), Up Fintech (TIGR), and FUTU Holdings (FUTU). Robinhood (HOOD) also joins that list, with all of them losing over 5% today.
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Investor Sentiment
The put/call ratio rose to 0.671. The put/call ratio (PCCE) is a contrarian indicator of 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 moved to Neutral, despite the selling and defensive plays today.
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Looking ahead
Tuesday brings several bits of economic data. US Retail Sales data and Industrial Production data are available before the market opens. Business Inventories and Retail Inventories become available after the market opens. The Fed's Jerome Powell is scheduled to speak in the early afternoon.
Adding to the Retail economic data, Walmart (WMT), Home Depot (HD), and Sea Limited (SE) have earnings reports in the morning.
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Trends, Support, and Resistance
The Nasdaq pierced the 21d EMA today but then rallied to close above the key moving average line.
The one-day regression trend line points to a gain since most of the day is an uptrend after the morning dip. The trend-line ends with a +0.77% gain for Tuesday.
The trend from the 7/19 low points to a +0.64% gain.
The five-day trend line ends with a -0.34% decline.
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Wrap-up
The economic data from China turned the market to a bearish mood this morning. But that mood didn't last long as investors bought the dip, putting money into defensive sectors and big tech. There is still some fear in the market. However, there are not many places for investors to put money other than equities, and it happens that there is a lot of money to be put somewhere these days.
The hanging man candlestick within an uptrend signals a possible move lower. Combined with the doji star on Friday, the expectation is for Sideways or Lower tomorrow.
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=-
Monday, August 16, 2021
Facts: -0.20%, Volume lower, Closing range: 100%, Body: 12%
Good: Volume lower on retreat, high closing range
Bad: Long lower wick pierced through 21d EMA
Highs/Lows: Lower high, lower low
Candle: Hanging man, small body above long lower wick within uptrend
Advanced/Decline: 0.31, more than three declining stocks for every advancing stock
Indexes: SPX (+0.26%), DJI (+0.31%), RUT (-0.89%), VIX (+4.20%)
Sectors: Health (XLV +1.14%) and Utilities (XLU +0.61%)
at the top. Materials (XLB -0.50%) and Energy (XLE -1.84%) at the bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Investors sold off equities in the morning and then seemingly decided there was nowhere else to put the money and bought back assets in the afternoon. Capital moved back into the market, mostly into defensive sectors, sending the S&P 500 and Dow Jones Industrial (DJI) to another set of records.
The Nasdaq closed with a decline of -0.20% after dipping more than 1.4% in the morning. Volume was lower than the previous day. The thin body above a long lower wick creates a hanging man candlestick within an uptrend. The closing range of 100% shows bulls kept up the buying into close. Still, there were more than three declining stocks for every advancing stock for the day.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) had their fifth consecutive record close day. The S&P 500 gained +0.26% while the Dow Jones advanced +0.31%. The Russell 2000 (RUT) declined -0.89%
The VIX volatility index advanced +4.20%.
The defensive sectors topped the sector list again today. Health (XLV +1.14%) and Utilities (XLU +0.61%) were the best sectors of the day. At the bottom of the sector list are Materials (XLB -0.50%) and Energy (XLE -1.84%).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The NY Empire State Manufacturing Index came in much lower than expected, showing a slowdown in US manufacturing activity. The more important data came from China which showed a considerable slowdown in Retail Sales and Industrial Production.
The US Dollar (DXY) advanced +0.10%.
The US 30y and 10y Treasury Yields declined while the 2y Treasury Yield rose.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced another day.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined.
Timber (Wood) declined.
Copper (COPPER1!) declined, and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -2.09%. Ethereum (ETHUSD) declined -4.57%. (Time of writing)
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four of the largest mega-caps gained today, helping bring the indexes back from the morning dip. Apple (AAPL) advanced +1.35%. Microsoft (MSFT) rose +0.60%. Alphabet (GOOGL) gained +0.42%. Amazon (AMZN) dipped below its 200d moving average line but recovered to gain +0.15% by the end of the day.
Eli Lilly (LLY), United Health (UNH), Thermo Fisher Scientific (TMO), and AbbVie (ABBV) were the top mega-caps for the day, all gaining over 1.5%. Tesla (TSLA) was at the bottom of the list with a -4.32% decline after the US opened a safety investigation into their Autopilot system. Also at the bottom of the mega-cap list are Alibaba (BABA), Wells Fargo (WFC), and Exxon Mobil (XOM).
Only a handful of stocks in the daily update growth list gained for the day. Top gainers were PayCom (PAYC), PayPal (PYPL), Facebook (FB), and D.R. Horton (DHI). The biggest losers included Chinese stocks NIO (NIO), Up Fintech (TIGR), and FUTU Holdings (FUTU). Robinhood (HOOD) also joins that list, with all of them losing over 5% today.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose to 0.671. The put/call ratio (PCCE) is a contrarian indicator of 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 moved to Neutral, despite the selling and defensive plays today.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tuesday brings several bits of economic data. US Retail Sales data and Industrial Production data are available before the market opens. Business Inventories and Retail Inventories become available after the market opens. The Fed's Jerome Powell is scheduled to speak in the early afternoon.
Adding to the Retail economic data, Walmart (WMT), Home Depot (HD), and Sea Limited (SE) have earnings reports in the morning.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq pierced the 21d EMA today but then rallied to close above the key moving average line.
The one-day regression trend line points to a gain since most of the day is an uptrend after the morning dip. The trend-line ends with a +0.77% gain for Tuesday.
The trend from the 7/19 low points to a +0.64% gain.
The five-day trend line ends with a -0.34% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The economic data from China turned the market to a bearish mood this morning. But that mood didn't last long as investors bought the dip, putting money into defensive sectors and big tech. There is still some fear in the market. However, there are not many places for investors to put money other than equities, and it happens that there is a lot of money to be put somewhere these days.
The hanging man candlestick within an uptrend signals a possible move lower. Combined with the doji star on Friday, the expectation is for Sideways or Lower tomorrow.
Stay healthy and trade safe!
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