Daily Market Update for 7/19
Diupdate
Summary: The new Delta variant of the Coronavirus was top of mind for investors as the trading week began. Share prices of COVID vaccine-related companies soared today as it appeared governments would need to double down on vaccination efforts.
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, July 19, 2021
Facts: -1.06%, Volume higher, Closing range: 71%, Body: 29%
Good: Support around 14,200, good closing range
Bad: Lower on higher volume, lower high, lower low
Highs/Lows: Lower high, lower low
Candle: Green body in center of candle, even upper and lower wicks
Advanced/Decline: 0.27, more than three declining stocks for every advancing stock
Indexes: SPX (-1.59%), DJI (-2.09%), RUT (-1.51%), VIX (+21.96%)
Sectors: Consumer Staples (XLP -0.30%) and Health (XLV -1.05%) at the top. Financials (XLF -2.80%) and Energy (XLE -3.53%) were bottom.
Expectation: Sideways or Lower
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Market Overview
The new Delta variant of the Coronavirus was top of mind for investors as the trading week began. Share prices of COVID vaccine-related companies soared today as it appeared governments would need to double down on vaccination efforts.
The Nasdaq finished with a -1.06% loss for the day on higher volume. The index found support at the 14,200 level, closing with a 71% closing range above a 29% body that is right in the middle of the candle. The lower high and lower low continues a downtrend as more than three stocks declined for every stock that advanced today.
The Dow Jones Industrial Average (DJI) took the biggest hit with a -2.09% loss. The S&P 500 (SPX) lost -1.59%. The Russell 2000 (RUT) lost -1.51% as it continues to slide well below recent highs.
The VIX volatility index rose +21.96%. It was up over 35% intra-day.
All sectors lost for the day. Consumer Staples (XLP -0.30%) and Health (XLV -1.05%) led the sector list. Financials (XLF -2.80%) and Energy (XLE -3.53%) were the worst-performing.
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Economic Indicators
President Biden gave a speech today that included remarks on inflation and the strength of the economy. The market receded from earlier gains after his speech.
The US Dollar (DXY) rose +0.13% for the day.
The US 30y, 10y, and 2y Treasury Yields dropped again.
High Yield Corporate Bond (HYG) prices declined sharply, while Investment Grade Corporate Bond (LQD) prices advanced. The gap between High Yield bonds and Treasury bonds widened significantly.
Silver (SILVER) declined, and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined sharply.
Timber (Wood) continued a steep decline.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -2.98%. Ethereum (ETHUSD) declined -3.90%.
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Investor Sentiment
The put/call ratio rose to 0.898, showing investors getting more bearish. 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 moved further into extreme fear.
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Market Leaders
All big four mega-caps had huge declines today. Apple (AAPL) gapped down and closed with a -2.69% loss. Microsoft (MSFT) declined -1.33%. Alphabet (GOOGL) lost -1.88%, closing right at its 21d exponential moving average. Amazon (AMZN) declined -0.67% and closed below its 21d exponential moving average.
Nvidia (NVDA) topped the mega-cap list with a +3.41% gain after Morningstar improved its outlook for the company. Abbot Laboratories (ABT), Eli Lilly (LLY), and Netflix (NFLX) were the next three on the list. Most of the mega-caps declined for the day. The biggest losers were Mastercard (MA), Walt Disney (DIS), Exxon Mobil (XOM), and JP Morgan (JPM).
The majority of the daily update growth stocks had gains today. Peloton (PTON) topped the list with a 7.14% gain, leading other stay-at-home stocks upward as fears of the Delta variant grow. Peloton also announced it would get into the video game business, turning its exercise equipment in the controller. Chewy (CHWY), Fiverr (FVRR), and DoorDash (DASH) also had significant gains today. Interestingly, stay-at-home stock Zoom Video (ZM) did not rise today, ending up at the bottom of the list with a -2.15% decline. Also at the bottom were JD.com (JD), Square (SQ), and Alibaba (BABA).
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Looking ahead
Building Permits and Housing Starts data will be available on Tuesday morning before the market opens. API Weekly Crude Oil Stock gets released after the market closes.
Netflix (NFLX), Philip Morris (PM), Chipotle (CMG), KeyCorp (KEY), Haliburton (HAL), and United Airlines (UAL) will report earnings on Tuesday.
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Trends, Support, and Resistance
The Nasdaq found support at 14,200 today.
The five-day trend line and trend line from the 7/13 high points to a -1.02% to -1.17% decline for Tuesday.
The one-day trend line points to a -0.32% loss.
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Wrap-up
Investors are spooked over the rise in the new Delta variant of the Coronavirus. Expect more volatility until the pros can better understand how dangerous the new variant is and how they can control it. Based on the downtrend and daily decline on higher volume, 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.
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Monday, July 19, 2021
Facts: -1.06%, Volume higher, Closing range: 71%, Body: 29%
Good: Support around 14,200, good closing range
Bad: Lower on higher volume, lower high, lower low
Highs/Lows: Lower high, lower low
Candle: Green body in center of candle, even upper and lower wicks
Advanced/Decline: 0.27, more than three declining stocks for every advancing stock
Indexes: SPX (-1.59%), DJI (-2.09%), RUT (-1.51%), VIX (+21.96%)
Sectors: Consumer Staples (XLP -0.30%) and Health (XLV -1.05%) at the top. Financials (XLF -2.80%) and Energy (XLE -3.53%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The new Delta variant of the Coronavirus was top of mind for investors as the trading week began. Share prices of COVID vaccine-related companies soared today as it appeared governments would need to double down on vaccination efforts.
The Nasdaq finished with a -1.06% loss for the day on higher volume. The index found support at the 14,200 level, closing with a 71% closing range above a 29% body that is right in the middle of the candle. The lower high and lower low continues a downtrend as more than three stocks declined for every stock that advanced today.
The Dow Jones Industrial Average (DJI) took the biggest hit with a -2.09% loss. The S&P 500 (SPX) lost -1.59%. The Russell 2000 (RUT) lost -1.51% as it continues to slide well below recent highs.
The VIX volatility index rose +21.96%. It was up over 35% intra-day.
All sectors lost for the day. Consumer Staples (XLP -0.30%) and Health (XLV -1.05%) led the sector list. Financials (XLF -2.80%) and Energy (XLE -3.53%) were the worst-performing.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
President Biden gave a speech today that included remarks on inflation and the strength of the economy. The market receded from earlier gains after his speech.
The US Dollar (DXY) rose +0.13% for the day.
The US 30y, 10y, and 2y Treasury Yields dropped again.
High Yield Corporate Bond (HYG) prices declined sharply, while Investment Grade Corporate Bond (LQD) prices advanced. The gap between High Yield bonds and Treasury bonds widened significantly.
Silver (SILVER) declined, and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) prices declined sharply.
Timber (Wood) continued a steep decline.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -2.98%. Ethereum (ETHUSD) declined -3.90%.
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Investor Sentiment
The put/call ratio rose to 0.898, showing investors getting more bearish. 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 moved further into extreme fear.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All big four mega-caps had huge declines today. Apple (AAPL) gapped down and closed with a -2.69% loss. Microsoft (MSFT) declined -1.33%. Alphabet (GOOGL) lost -1.88%, closing right at its 21d exponential moving average. Amazon (AMZN) declined -0.67% and closed below its 21d exponential moving average.
Nvidia (NVDA) topped the mega-cap list with a +3.41% gain after Morningstar improved its outlook for the company. Abbot Laboratories (ABT), Eli Lilly (LLY), and Netflix (NFLX) were the next three on the list. Most of the mega-caps declined for the day. The biggest losers were Mastercard (MA), Walt Disney (DIS), Exxon Mobil (XOM), and JP Morgan (JPM).
The majority of the daily update growth stocks had gains today. Peloton (PTON) topped the list with a 7.14% gain, leading other stay-at-home stocks upward as fears of the Delta variant grow. Peloton also announced it would get into the video game business, turning its exercise equipment in the controller. Chewy (CHWY), Fiverr (FVRR), and DoorDash (DASH) also had significant gains today. Interestingly, stay-at-home stock Zoom Video (ZM) did not rise today, ending up at the bottom of the list with a -2.15% decline. Also at the bottom were JD.com (JD), Square (SQ), and Alibaba (BABA).
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Looking ahead
Building Permits and Housing Starts data will be available on Tuesday morning before the market opens. API Weekly Crude Oil Stock gets released after the market closes.
Netflix (NFLX), Philip Morris (PM), Chipotle (CMG), KeyCorp (KEY), Haliburton (HAL), and United Airlines (UAL) will report earnings on Tuesday.
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Trends, Support, and Resistance
The Nasdaq found support at 14,200 today.
The five-day trend line and trend line from the 7/13 high points to a -1.02% to -1.17% decline for Tuesday.
The one-day trend line points to a -0.32% loss.
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Wrap-up
Investors are spooked over the rise in the new Delta variant of the Coronavirus. Expect more volatility until the pros can better understand how dangerous the new variant is and how they can control it. Based on the downtrend and daily decline on higher volume, the expectation is for Sideways or Lower tomorrow.
Stay healthy and trade safe!
Catatan
I incorrectly stated the closing range as 71%. With the gap down, the closing range should include the difference between the previous day's low and the current day's high. The actual closing range was 41%.
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