Summary: Even today's worst-performing sector gained over one percent, marking a very bullish day with gains broad across the market. The Nasdaq had a 1.4 advance/decline ratio, while the New York Stock Exchange recorded a ratio of 3.6 advancers to decliners.
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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Thursday, October 14, 2021
Facts: +1.73%, Volume lower, Closing Range: 98% (w/gap), Body: 83% Green
Good: Very bullish day with very few declines, high closing range, higher volume
Bad: Gap may need to be revisited
Highs/Lows: Higher high, Higher low
Candle: Gap up at open, mostly green body
Advance/Decline: 1.38, more advancing stocks than declining stocks
Indexes: SPX (+1.71%), DJI (+1.56%), RUT (+1.44%), VIX (-9.55%)
Sector List: Materials (XLB +2.43%) and Technology (XLK +2.25%) at the top. Consumer Staples (XLP +1.13%) and Consumer Discretionary (XLY +1.05%) at the bottom.
Expectation: Higher
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Market Overview
Even today's worst-performing sector gained over one percent, marking a very bullish day with gains broad across the market. The Nasdaq had a 1.4 advance/decline ratio, while the New York Stock Exchange recorded a ratio of 3.6 advancers to decliners.
The Nasdaq ended the day with a +1.73% after gapping up in the morning. Volume was higher than the previous day, and the candle is mostly green body with a 98% closing range, including the gap. There were more advancing stocks than declining stocks.
The S&P 500 (SPX) was the next best-performing index with a +1.71% advance. The Dow Jones Industrial Average (DJI) climbed by +1.56%, and the Russell 2000 (RUT) advanced by +1.44%. The VIX Volatility Index (VIX) fell back to its lowest level since mid-September with a -9.55% decline today.
All S&P 500 sectors gained for the day. Materials (XLB +2.43%) and Technology (XLK +2.25%) are at the top of the list. Consumer Staples (XLP +1.13%) and Consumer Discretionary (XLY +1.05%) were at the bottom, both still gaining over one percent.
Producer Price Index data came in lower than expected. Core PPI, which excludes food and energy, was at 0.2% month-over-month compared to 0.5%. Total PPI came in at 0.5% against the 0.6% expectation. While a miss in PPI is typically bearish for the US Dollar, it’s a welcome sight in this year's market since it is a leading indicator of inflation.
Initial Jobless Claims came in at 293,000 against a forecast of 319,000, showing strength in the labor market recovery. Crude Oil Inventories were much higher than expected at 6.1 million barrels compared to a forecast of 0.7 million barrels.
The US Dollar declined only -0.02% for the day. US 30y and 10y Treasury Yields fell while the 2y yield advanced. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices both sharply increased. Silver and Gold both advanced. Timber, Copper, and Aluminum all advanced.
The put/call ratio declined to 0.590. The CNN Fear & Greed index is still in the Fear range but moving closer to Neutral. The NAAIM money manager exposure index declined to 64.46 from 68.6 the previous week.
Things are looking much better for the four largest mega-caps. Microsoft (MSFT) and Alphabet (GOOGL) ad over 2% advances to close higher than the 21d EMA and 50d MA lines. Apple (AAPL) and Amazon (AMZN) also advanced today but have some work before clearing the moving averages.
ASML Holding (ASML), Bank of America (BAC), and United Health (UNH) all soared over 4% to top the mega-cap list. Both Bank of America and United Health beat earnings expectations before the market opened. Overall earnings releases for big banks have been very positive this week. There were only four decliners in the list, with Oracle (ORCL) losing -1.16% to end up at the bottom.
GrowGeneration (GRWG) bounced back from yesterday's loss to climb +5.21% today and top the daily update growth list. UP Fintech (TIGER) and FUTU Holdings (FUTU) were at the bottom of the list, declining -21.19% and -12.41%. Investors turned very bearish on the two companies after new privacy laws in China could restrict investors from using the platforms for international investments.
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Looking ahead
Retail Sales data is due on Friday morning before the market opens. In addition, Export/Import price indexes, the NY Empire State Manufacturing Index, Business Inventories, and Michigan Consumer Sentiment/Expectations data will all be available in the morning.
Tomorrow's premarket earnings reports include Goldman Sachs (GS).
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Trends, Support, and Resistance
The Nasdaq soared above its 21d EMA today but closed below the 50d MA.
If the one-day trend line continues into Friday, that will mean a +0.61% advance.
After today's huge gain, a return to the five-day trend line and the trend line from the 10/4 low points to a -0.67% decline for tomorrow.
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Wrap-up
Relief on inflation and a strong labor report was just what investors needed to put off stagflation fears and get back into equity positions. It also helped that earnings reports from the financial sector have mainly been positive this week.
Based on today's bullish action, the expectation for tomorrow is higher. There is the chance for a decline to fill today's gap, which may happen if any surprises come in the morning economic data. But I'd still expect today's bullish outlook to overcome any dip.
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=-
Thursday, October 14, 2021
Facts: +1.73%, Volume lower, Closing Range: 98% (w/gap), Body: 83% Green
Good: Very bullish day with very few declines, high closing range, higher volume
Bad: Gap may need to be revisited
Highs/Lows: Higher high, Higher low
Candle: Gap up at open, mostly green body
Advance/Decline: 1.38, more advancing stocks than declining stocks
Indexes: SPX (+1.71%), DJI (+1.56%), RUT (+1.44%), VIX (-9.55%)
Sector List: Materials (XLB +2.43%) and Technology (XLK +2.25%) at the top. Consumer Staples (XLP +1.13%) and Consumer Discretionary (XLY +1.05%) at the bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Even today's worst-performing sector gained over one percent, marking a very bullish day with gains broad across the market. The Nasdaq had a 1.4 advance/decline ratio, while the New York Stock Exchange recorded a ratio of 3.6 advancers to decliners.
The Nasdaq ended the day with a +1.73% after gapping up in the morning. Volume was higher than the previous day, and the candle is mostly green body with a 98% closing range, including the gap. There were more advancing stocks than declining stocks.
The S&P 500 (SPX) was the next best-performing index with a +1.71% advance. The Dow Jones Industrial Average (DJI) climbed by +1.56%, and the Russell 2000 (RUT) advanced by +1.44%. The VIX Volatility Index (VIX) fell back to its lowest level since mid-September with a -9.55% decline today.
All S&P 500 sectors gained for the day. Materials (XLB +2.43%) and Technology (XLK +2.25%) are at the top of the list. Consumer Staples (XLP +1.13%) and Consumer Discretionary (XLY +1.05%) were at the bottom, both still gaining over one percent.
Producer Price Index data came in lower than expected. Core PPI, which excludes food and energy, was at 0.2% month-over-month compared to 0.5%. Total PPI came in at 0.5% against the 0.6% expectation. While a miss in PPI is typically bearish for the US Dollar, it’s a welcome sight in this year's market since it is a leading indicator of inflation.
Initial Jobless Claims came in at 293,000 against a forecast of 319,000, showing strength in the labor market recovery. Crude Oil Inventories were much higher than expected at 6.1 million barrels compared to a forecast of 0.7 million barrels.
The US Dollar declined only -0.02% for the day. US 30y and 10y Treasury Yields fell while the 2y yield advanced. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices both sharply increased. Silver and Gold both advanced. Timber, Copper, and Aluminum all advanced.
The put/call ratio declined to 0.590. The CNN Fear & Greed index is still in the Fear range but moving closer to Neutral. The NAAIM money manager exposure index declined to 64.46 from 68.6 the previous week.
Things are looking much better for the four largest mega-caps. Microsoft (MSFT) and Alphabet (GOOGL) ad over 2% advances to close higher than the 21d EMA and 50d MA lines. Apple (AAPL) and Amazon (AMZN) also advanced today but have some work before clearing the moving averages.
ASML Holding (ASML), Bank of America (BAC), and United Health (UNH) all soared over 4% to top the mega-cap list. Both Bank of America and United Health beat earnings expectations before the market opened. Overall earnings releases for big banks have been very positive this week. There were only four decliners in the list, with Oracle (ORCL) losing -1.16% to end up at the bottom.
GrowGeneration (GRWG) bounced back from yesterday's loss to climb +5.21% today and top the daily update growth list. UP Fintech (TIGER) and FUTU Holdings (FUTU) were at the bottom of the list, declining -21.19% and -12.41%. Investors turned very bearish on the two companies after new privacy laws in China could restrict investors from using the platforms for international investments.
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Looking ahead
Retail Sales data is due on Friday morning before the market opens. In addition, Export/Import price indexes, the NY Empire State Manufacturing Index, Business Inventories, and Michigan Consumer Sentiment/Expectations data will all be available in the morning.
Tomorrow's premarket earnings reports include Goldman Sachs (GS).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq soared above its 21d EMA today but closed below the 50d MA.
If the one-day trend line continues into Friday, that will mean a +0.61% advance.
After today's huge gain, a return to the five-day trend line and the trend line from the 10/4 low points to a -0.67% decline for tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Relief on inflation and a strong labor report was just what investors needed to put off stagflation fears and get back into equity positions. It also helped that earnings reports from the financial sector have mainly been positive this week.
Based on today's bullish action, the expectation for tomorrow is higher. There is the chance for a decline to fill today's gap, which may happen if any surprises come in the morning economic data. But I'd still expect today's bullish outlook to overcome any dip.
Stay healthy and trade safe!
