Daily Market Update for 6/22
Summary: It was a record-setting day for the Nasdaq, setting a new all-time high for the first time since April. The other major indexes also had good gains for the day, while the sector list mainly was positive. Investors responded to better than expected existing home sales data and no new surprises from Fed Jerome Powell's testimony to congress.
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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Tuesday, June 22, 2021
Facts: +0.79%, Volume lower, Closing range: 89%, Body: 77%
Good: New all-time high, thick green body, small wicks
Bad: A/D ratio, lower volume
Highs/Lows: Higher high, lower low
Candle: Mostly green body with short upper and lower wicks
Advanced/Decline: 0.74, More declining stocks than advancing stocks
Indexes: SPX (+0.51%), DJI (+0.20%), RUT (+0.43%), VIX (-6.77%)
Sectors: Consumer Discretionary (XLY +0.94%) and Technology (XLK +0.91%) were top. Real Estate (XLRE -0.45%) and Utilities (XLU -0.61%) were bottom.
Expectation: Higher
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Market Overview
It was a record-setting day for the Nasdaq, setting a new all-time high for the first time since April. The other major indexes also had good gains for the day, while the sector list mainly was positive. Investors responded to better than expected existing home sales data and no new surprises from Fed Jerome Powell's testimony to congress.
The Nasdaq gained +0.79% for the day and finished the day with its highest close since April. The closing range of 89% and 77% green body represents a bullish session that only paused mid-day to await Powell's comments. Despite the bullish day, there were more declining stocks than advancing stocks.
The S&P 500 (SPX) gained +0.51% for the day. The Dow Jones Industrial Average (DJI) advanced +0.20%. The Nasdaq, S&P 500, and Dow Jones all faded before close while the Russell 2000 (RUT) remained steady. The RUT closed with a +0.43% gain.
The VIX volatility index declined -6.77%.
The growth sectors topped the list today, with Consumer Discretionary (XLY +0.94%) and Technology (XLK +0.91%) at the top of the list. Only two sectors declined. Real Estate (XLRE -0.45%) and Utilities (XLU -0.61%) closed lower.
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Economic Indicators
The US Dollar (DXY) declined -0.15%.
The US 30y, 10y, and 2y Treasury Yields all declined slightly.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) also advanced.
Bitcoin (BTCUSD) gained +2.88%. Ethereum (ETHUSD) declined -0.36%.
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Investor Sentiment
The put/call ratio remained about the same at 0.582. 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 on the fear side.
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Market Leaders
All four largest mega-caps gained for the day, continuing to show strength and helping the Nasdaq move higher. Amazon (AMZN) gained +1.49%. Apple (AAPL) advanced +1.27%. Microsoft (MSFT) reached another new all-time high with a +1.10% gain. Alphabet (GOOGL) is nearing a new all-time high with a +0.43% gain today.
Nvidia (NVDA), Netflix (NFLX), Facebook (FB), and Exxon Mobil (XOM) were the top mega-caps today. Most mega-caps had positive gains. The biggest losers were Novartis (NVS), Salesforce.com (CRM), Eli Lilly (LLY), and AT&T (T). However, their losses were all under 1%.
Gainers also dominated the daily update growth list. Upwork (UPWK), FUTU Holdings (FUTU), Peloton (PTON), and CrowdStrike (CRWD) had the most significant advances. SNAP (SNAP), Zynga (ZNGA), NIO (NIO), and Sumo Digital (SUMO) were at the bottom of the list. NIO and Sumo lost more than 5%.
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Looking ahead
Manufacturing and Services purchasing manager index data, released on Wednesday, gives a view on demand for products in services in their sectors. In addition, new Home Sales data will be available after the market open. Crude Oil Inventories data also comes on Wednesday, after the market opens.
There are no relevant earnings reports for the daily update on Wednesday.
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Trends, Support, and Resistance
The Nasdaq rose above 14,200 after attempting to pass the resistance area a few times. We will watch for that area to become a support area if the index pulls back.
The one-day trend-line shows another gain for tomorrow, an advance of +0.81%.
The trend-line from the 5/12 low points to a +0.25% gain.
The five-day trend-line ends with a -0.33% declined for tomorrow.
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Wrap-up
Two catalysts helped the index move higher today. More robust than expected existing home sales kicked off momentum in the morning. Then a well-received message from Jerome Powell helped in the afternoon.
Powell stated that the Fed would not raise interest rates on inflation fears alone. They would need to see real inflation before considering policy change. That message resonates well. The Fed will not rush to raise rates but is also not going to let inflation run wild.
This stance from the Fed is making global investors more confident in the US Dollar, US Treasuries, and likewise US equities. That confidence is healthy for the whole market, but especially growth stocks, sending the growth sectors and the Nasdaq higher.
Given the momentum, the expectation is for higher tomorrow. Sideways would not be a huge surprise. If we see a pullback in the Nasdaq, then there is likely some catalyst driving people to safety or into sector rotation.
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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Tuesday, June 22, 2021
Facts: +0.79%, Volume lower, Closing range: 89%, Body: 77%
Good: New all-time high, thick green body, small wicks
Bad: A/D ratio, lower volume
Highs/Lows: Higher high, lower low
Candle: Mostly green body with short upper and lower wicks
Advanced/Decline: 0.74, More declining stocks than advancing stocks
Indexes: SPX (+0.51%), DJI (+0.20%), RUT (+0.43%), VIX (-6.77%)
Sectors: Consumer Discretionary (XLY +0.94%) and Technology (XLK +0.91%) were top. Real Estate (XLRE -0.45%) and Utilities (XLU -0.61%) were bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
It was a record-setting day for the Nasdaq, setting a new all-time high for the first time since April. The other major indexes also had good gains for the day, while the sector list mainly was positive. Investors responded to better than expected existing home sales data and no new surprises from Fed Jerome Powell's testimony to congress.
The Nasdaq gained +0.79% for the day and finished the day with its highest close since April. The closing range of 89% and 77% green body represents a bullish session that only paused mid-day to await Powell's comments. Despite the bullish day, there were more declining stocks than advancing stocks.
The S&P 500 (SPX) gained +0.51% for the day. The Dow Jones Industrial Average (DJI) advanced +0.20%. The Nasdaq, S&P 500, and Dow Jones all faded before close while the Russell 2000 (RUT) remained steady. The RUT closed with a +0.43% gain.
The VIX volatility index declined -6.77%.
The growth sectors topped the list today, with Consumer Discretionary (XLY +0.94%) and Technology (XLK +0.91%) at the top of the list. Only two sectors declined. Real Estate (XLRE -0.45%) and Utilities (XLU -0.61%) closed lower.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.15%.
The US 30y, 10y, and 2y Treasury Yields all declined slightly.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) advanced.
Copper (COPPER1!) and Aluminum (ALI1!) also advanced.
Bitcoin (BTCUSD) gained +2.88%. Ethereum (ETHUSD) declined -0.36%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio remained about the same at 0.582. 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 on the fear side.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All four largest mega-caps gained for the day, continuing to show strength and helping the Nasdaq move higher. Amazon (AMZN) gained +1.49%. Apple (AAPL) advanced +1.27%. Microsoft (MSFT) reached another new all-time high with a +1.10% gain. Alphabet (GOOGL) is nearing a new all-time high with a +0.43% gain today.
Nvidia (NVDA), Netflix (NFLX), Facebook (FB), and Exxon Mobil (XOM) were the top mega-caps today. Most mega-caps had positive gains. The biggest losers were Novartis (NVS), Salesforce.com (CRM), Eli Lilly (LLY), and AT&T (T). However, their losses were all under 1%.
Gainers also dominated the daily update growth list. Upwork (UPWK), FUTU Holdings (FUTU), Peloton (PTON), and CrowdStrike (CRWD) had the most significant advances. SNAP (SNAP), Zynga (ZNGA), NIO (NIO), and Sumo Digital (SUMO) were at the bottom of the list. NIO and Sumo lost more than 5%.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Manufacturing and Services purchasing manager index data, released on Wednesday, gives a view on demand for products in services in their sectors. In addition, new Home Sales data will be available after the market open. Crude Oil Inventories data also comes on Wednesday, after the market opens.
There are no relevant earnings reports for the daily update on Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq rose above 14,200 after attempting to pass the resistance area a few times. We will watch for that area to become a support area if the index pulls back.
The one-day trend-line shows another gain for tomorrow, an advance of +0.81%.
The trend-line from the 5/12 low points to a +0.25% gain.
The five-day trend-line ends with a -0.33% declined for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Two catalysts helped the index move higher today. More robust than expected existing home sales kicked off momentum in the morning. Then a well-received message from Jerome Powell helped in the afternoon.
Powell stated that the Fed would not raise interest rates on inflation fears alone. They would need to see real inflation before considering policy change. That message resonates well. The Fed will not rush to raise rates but is also not going to let inflation run wild.
This stance from the Fed is making global investors more confident in the US Dollar, US Treasuries, and likewise US equities. That confidence is healthy for the whole market, but especially growth stocks, sending the growth sectors and the Nasdaq higher.
Given the momentum, the expectation is for higher tomorrow. Sideways would not be a huge surprise. If we see a pullback in the Nasdaq, then there is likely some catalyst driving people to safety or into sector rotation.
Stay healthy and trade safe!
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