Daily Market Update for 2/9
Trend lines drawn from the 10/30 bottom (69d), 2/3 (5d) and today 2/9 (1d).
Ideas always welcome in the comments. Errors will be amended as comments on TradingView and corrected inline in my blog.
I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time.
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Tuesday, February 9, 2021
Facts: +0.14%, Volume higher, Closing range: 52%, Body: 52%
Good: New all-time high, higher low, close above 14,000
Bad: Upper wick, tested high three times but closed in middle of range
Highs/Lows: Higher high, higher low
Candle: Lower half of candle is body, upper wick formed after testing high 3 times
Advance/Decline: 1.45, about three advancing stocks for every two declining stocks
Indexes: SPX (-0.11%), DJI (-0.03%), RUT (+0.40%), VIX (+1.84%)
Sectors: Energy (XLE +4.18%) and Financials (XLF +1.29%) were top. Utilities (XLU -0.77%) was the only losing sector.
Expectation: Sideways or Higher
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Market Overview
The market continues to move higher, albeit at a slower pace than the previous week. Today brought another new all-time high for the Nasdaq and a higher low. However better than expected Job Openings data wasn't enough for the index to stay at the top of the range, testing the high three times before closing in about the middle of the intraday trading range.
The Nasdaq closed with a +0.14% gain on higher volume than the previous day. The closing range of 52% is above a 52% body that covers the lower half of the candle with no lower wick. A higher high and a higher low is a sign of strength and closing above 14,000 was a key level to look for this week. About three stocks advanced for every two stocks that declined.
The Russell 2000 (RUT) was the best performing index of the day with a +0.40% gain. Go, go small caps! The S&P 500 (SPX) and Dow Jones Industrial (DJI) could not hold on to early session gains and were down -0.11% and -0.03% at close. The VIX gained +1.84%.
Real Estate (XLRE +0.45%) and Communications (XLC +0.33%) were the top performing sectors of the day. Energy (XLE -1.06%) and Materials (XLB -0.74%) were the bottom. With the big gain for Energy on Monday, it's reasonable to expect a pullback, and Energy continues to lead the sectors by a wide margin for the current week as well as month-to-date.
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Economic Indicators
The US Dollar (DXY) declined -0.54% for the day.
The US 30y treasury bond yields remained about flat while while 10y treasury bond yields declined. The US 2y yields rose. High Yield Corporate Bond (HYG) prices pull backed after an upward run that started on Feb 1.
Silver (SILVER) remained flat while Gold (GOLD) advanced for the day. Crude Oil (CRUDEOIL1!) futures continued to climb higher. Timber (WOOD) declined slightly. Copper (COPPER1!), and Aluminum (ALI1!) both advanced.
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Investor Sentiment
The put/call ratio declined to 0.494, an overly bullish level. 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
Of the biggest four mega-caps, only Microsoft (MSFT) advanced for the day with a +0.54% gain. Apple (AAPL) declined -0.66%. Amazon (AMZN) declined -0.54%. Alphabet (GOOGL) declined -0.44%. All are still trading above the key moving average lines. All have shrinking volume on price consolidation and could be ready to make another breakout to the positive.
Roche (RHHBY) gained +2.41% after they requested emergency approval for a COVID test. Netflix (NFLX +2.03%) and Comcast (CMCSA +1.68%) helped lead Communication stocks higher.
FUTU Holdings (FUTU) made another big advanced with a +20.63% gain. NIO (NIO) wants to breakout with a +6.38% gain today. Enphase (ENPH) was up 6% after hours upon beating estimates in their earnings release. Twitter (TWTR) also beat expectations but after hours gains were muted when they warned expenses will increase 25% this year.
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Looking ahead
Core consumer price index data will be released before market open tomorrow. Crude Oil Inventories will be updated after markets open at 10:30. The US Federal Budget release and comments from Fed Chair Powell will happen in early afternoon.
Toyota Motor (TM), Coca-Cola (KO), Uber (UBER), MercadoLibre (MELI), General Motors (GM) are just a few of the big earnings releases tomorrow. Zillow (Z), Qualys (QLYS) . There are a large amount of earnings releases this week, so check your portfolio for earnings events so you are not surprised.
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Trends, Support and Resistance
The five-day trend line is pointing to a +1.07% gain and another all-time high. The one-day trend line is showing a sideways move of +0.10% which would likely be a result of resistance at yesterday's high.
The long-term trend line from the 10/30 bottom points to a small -1.02% pullback.
If there is further downside, the 21d EMA line offers an area of support and is -3.8% below Friday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250.
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Wrap-up
It wasn't an overly bullish day for the market, but it certainly wasn't a bad day. After a week of big gains, having a small gain for one day allows moving averages to catch up. There was still plenty of breadth in the market with more gainers than losers.
A sideways move tomorrow or even a small pullback would not be terrible for tomorrow. Then again, the market may just decide to continue higher on stimulus and economic data.
Stay healthy and take care!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView and corrected inline in my blog.
I'm working to condense this daily update over the next few weeks. I need to reduce it for both brevity and preparation time.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Tuesday, February 9, 2021
Facts: +0.14%, Volume higher, Closing range: 52%, Body: 52%
Good: New all-time high, higher low, close above 14,000
Bad: Upper wick, tested high three times but closed in middle of range
Highs/Lows: Higher high, higher low
Candle: Lower half of candle is body, upper wick formed after testing high 3 times
Advance/Decline: 1.45, about three advancing stocks for every two declining stocks
Indexes: SPX (-0.11%), DJI (-0.03%), RUT (+0.40%), VIX (+1.84%)
Sectors: Energy (XLE +4.18%) and Financials (XLF +1.29%) were top. Utilities (XLU -0.77%) was the only losing sector.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The market continues to move higher, albeit at a slower pace than the previous week. Today brought another new all-time high for the Nasdaq and a higher low. However better than expected Job Openings data wasn't enough for the index to stay at the top of the range, testing the high three times before closing in about the middle of the intraday trading range.
The Nasdaq closed with a +0.14% gain on higher volume than the previous day. The closing range of 52% is above a 52% body that covers the lower half of the candle with no lower wick. A higher high and a higher low is a sign of strength and closing above 14,000 was a key level to look for this week. About three stocks advanced for every two stocks that declined.
The Russell 2000 (RUT) was the best performing index of the day with a +0.40% gain. Go, go small caps! The S&P 500 (SPX) and Dow Jones Industrial (DJI) could not hold on to early session gains and were down -0.11% and -0.03% at close. The VIX gained +1.84%.
Real Estate (XLRE +0.45%) and Communications (XLC +0.33%) were the top performing sectors of the day. Energy (XLE -1.06%) and Materials (XLB -0.74%) were the bottom. With the big gain for Energy on Monday, it's reasonable to expect a pullback, and Energy continues to lead the sectors by a wide margin for the current week as well as month-to-date.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.54% for the day.
The US 30y treasury bond yields remained about flat while while 10y treasury bond yields declined. The US 2y yields rose. High Yield Corporate Bond (HYG) prices pull backed after an upward run that started on Feb 1.
Silver (SILVER) remained flat while Gold (GOLD) advanced for the day. Crude Oil (CRUDEOIL1!) futures continued to climb higher. Timber (WOOD) declined slightly. Copper (COPPER1!), and Aluminum (ALI1!) both advanced.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.494, an overly bullish level. 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
Of the biggest four mega-caps, only Microsoft (MSFT) advanced for the day with a +0.54% gain. Apple (AAPL) declined -0.66%. Amazon (AMZN) declined -0.54%. Alphabet (GOOGL) declined -0.44%. All are still trading above the key moving average lines. All have shrinking volume on price consolidation and could be ready to make another breakout to the positive.
Roche (RHHBY) gained +2.41% after they requested emergency approval for a COVID test. Netflix (NFLX +2.03%) and Comcast (CMCSA +1.68%) helped lead Communication stocks higher.
FUTU Holdings (FUTU) made another big advanced with a +20.63% gain. NIO (NIO) wants to breakout with a +6.38% gain today. Enphase (ENPH) was up 6% after hours upon beating estimates in their earnings release. Twitter (TWTR) also beat expectations but after hours gains were muted when they warned expenses will increase 25% this year.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Core consumer price index data will be released before market open tomorrow. Crude Oil Inventories will be updated after markets open at 10:30. The US Federal Budget release and comments from Fed Chair Powell will happen in early afternoon.
Toyota Motor (TM), Coca-Cola (KO), Uber (UBER), MercadoLibre (MELI), General Motors (GM) are just a few of the big earnings releases tomorrow. Zillow (Z), Qualys (QLYS) . There are a large amount of earnings releases this week, so check your portfolio for earnings events so you are not surprised.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The five-day trend line is pointing to a +1.07% gain and another all-time high. The one-day trend line is showing a sideways move of +0.10% which would likely be a result of resistance at yesterday's high.
The long-term trend line from the 10/30 bottom points to a small -1.02% pullback.
If there is further downside, the 21d EMA line offers an area of support and is -3.8% below Friday's close. The 13,000 level also seems to be an area of support. The index held the 12,550 area recently. If it passes that area, the next support area is 12,250.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It wasn't an overly bullish day for the market, but it certainly wasn't a bad day. After a week of big gains, having a small gain for one day allows moving averages to catch up. There was still plenty of breadth in the market with more gainers than losers.
A sideways move tomorrow or even a small pullback would not be terrible for tomorrow. Then again, the market may just decide to continue higher on stimulus and economic data.
Stay healthy and take care!
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