Summary: The growth trade is continuing to build steam as investors await more inflation data later this week. The cautious start yesterday morning abated, and investors slowly rotated back into some growth and cyclical sectors today. Meme stocks continued crazy moves.
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 8, 2021
Facts: +0.31%, Volume higher, Closing range: 62%, Body: 14%
Good: Positive move on higher volume, higher high, higher low
Bad: Red body, indecisive candle, expected resistance at 14,000
Highs/Lows: Higher high, higher low
Candle: Thin red body in upper half of candle, longer lower wick
Advanced/Decline: 1.16, More advancing stocks than declining stocks
Indexes: SPX (+0.02%), DJI (-0.09%), RUT (+1.06%), VIX (+3.83%)
Sectors: Energy (XLE +0.86%) and Consumer Discretionary (XLY +0.81%) were top. Consumer Staples (XLP -0.84%) and Utilities (XLU -0.85%) were bottom.
Expectation: Sideways or Lower
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Market Overview
The growth trade is continuing to build steam as investors await more inflation data later this week. The cautious start yesterday morning abated, and investors slowly rotated back into some growth and cyclical sectors today. Meme stocks continued crazy moves.
The Nasdaq closed with a +0.31% gain on higher volume. A long lower wick formed in the morning selling after a gap-up open that tested 14,000 resistance. Despite the morning selling, the index recovered to close just below where it opened, creating a thin 14% red body in the upper half of the candle. There were more advancing stocks than declining stocks.
The Russell 2000 (RUT) led again today with a +1.06% advance. The S&P 500 (SPX) gained +0.02%, while the Dow Jones Industrial Average (DJI) declined -0.09%.
The VIX volatility gained +3.83%.
The defensive sectors that led the sector list yesterday moved to the bottom today. Energy (XLE +0.86%) and Consumer Discretionary (XLY +0.81%) were top. Consumer Staples (XLP -0.84%) and Utilities (XLU -0.85%) were the worst-performing sectors of the day.
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Economic Indicators
The US Dollar (DXY) gained +0.18%.
The US 30y and 10y Treasury yields declined while the 2y yield remained about the same.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -0.23%. Ethereum (ETHUSD) declined -2.72%. (At the time of writing)
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Investor Sentiment
The put/call ratio declined to 0.461. 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 at neutral.
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Market Leaders
Amazon (AMZN) gained +2.07%, taking it above the 21d EMA but falling short of the 50d MA. Apple (AAPL) also moved above its 21d EMA with a +0.67% gain but hit resistance intraday at the 50d MA. Microsoft (MSFT)
and Alphabet (GOOGL) are trading above the two key moving average lines but declined at -0.49% and -0.16% today.
Amazon, Exxon Mobil (XOM), PayPal (PYPL), and Chevron (CVX) lead the mega-cap list today. There were more declining mega-caps than gaining mega-caps, holding back the S&P 500 and Dow Jones from gains. Nvidia (NVDA), Pepsi Co (PEP), Proctor & Gamble (PG), and Taiwan Semiconductor (TSM) were at the bottom of the list.
Ehang Holdings (EH) soared 18% today, topping the daily update growth list. Fastly (FSLY) gained over +10%, despite causing a widespread outage before the market opened. Lemonade (LMND) and Cloudflare (NET) round out the top four, both with better than 4% gains. Overall the growth list is about half gainers, half losers. At the bottom of the list are SNAP (SNAP), Moderna (MRNA), DoorDash (DASH), and UP Fintech (TIGR).
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Looking ahead
Wednesday morning will bring Crude Oil Inventories data after the market opens. In the afternoon, a 10-Year Note Auction may have an impact on interest rates.
GameStop (GME), RH (RH), and Lovesac (LOVE) will release earnings on Wednesday.
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Trends, Support, and Resistance
As expected, the Nasdaq met resistance at 14,000 today. It could hold near that level and potentially rise above it tomorrow with the right catalyst.
The three trend-lines (one-day, five-day, and from the 5/13 low) currently point to about the same place with a gain from +0.11% to +0.38% tomorrow.
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Wrap-up
We are still seeing some indication that investors are eyeing opportunities to move back into growth stocks but keep a cautious foot out the door if inflation data is worse than expected. That data does not come until Thursday, so it's tough to know what to expect for Wednesday.
Given the resistance at 14,000 today, it's reasonable to expect a sideways move or a step back before moving above that area. Sideways or lower. But we can hope for a surprise in the other direction.
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=-
Tuesday, June 8, 2021
Facts: +0.31%, Volume higher, Closing range: 62%, Body: 14%
Good: Positive move on higher volume, higher high, higher low
Bad: Red body, indecisive candle, expected resistance at 14,000
Highs/Lows: Higher high, higher low
Candle: Thin red body in upper half of candle, longer lower wick
Advanced/Decline: 1.16, More advancing stocks than declining stocks
Indexes: SPX (+0.02%), DJI (-0.09%), RUT (+1.06%), VIX (+3.83%)
Sectors: Energy (XLE +0.86%) and Consumer Discretionary (XLY +0.81%) were top. Consumer Staples (XLP -0.84%) and Utilities (XLU -0.85%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The growth trade is continuing to build steam as investors await more inflation data later this week. The cautious start yesterday morning abated, and investors slowly rotated back into some growth and cyclical sectors today. Meme stocks continued crazy moves.
The Nasdaq closed with a +0.31% gain on higher volume. A long lower wick formed in the morning selling after a gap-up open that tested 14,000 resistance. Despite the morning selling, the index recovered to close just below where it opened, creating a thin 14% red body in the upper half of the candle. There were more advancing stocks than declining stocks.
The Russell 2000 (RUT) led again today with a +1.06% advance. The S&P 500 (SPX) gained +0.02%, while the Dow Jones Industrial Average (DJI) declined -0.09%.
The VIX volatility gained +3.83%.
The defensive sectors that led the sector list yesterday moved to the bottom today. Energy (XLE +0.86%) and Consumer Discretionary (XLY +0.81%) were top. Consumer Staples (XLP -0.84%) and Utilities (XLU -0.85%) were the worst-performing sectors of the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) gained +0.18%.
The US 30y and 10y Treasury yields declined while the 2y yield remained about the same.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) advanced.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) advanced.
Bitcoin (BTCUSD) declined -0.23%. Ethereum (ETHUSD) declined -2.72%. (At the time of writing)
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Investor Sentiment
The put/call ratio declined to 0.461. 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 at neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN) gained +2.07%, taking it above the 21d EMA but falling short of the 50d MA. Apple (AAPL) also moved above its 21d EMA with a +0.67% gain but hit resistance intraday at the 50d MA. Microsoft (MSFT)
and Alphabet (GOOGL) are trading above the two key moving average lines but declined at -0.49% and -0.16% today.
Amazon, Exxon Mobil (XOM), PayPal (PYPL), and Chevron (CVX) lead the mega-cap list today. There were more declining mega-caps than gaining mega-caps, holding back the S&P 500 and Dow Jones from gains. Nvidia (NVDA), Pepsi Co (PEP), Proctor & Gamble (PG), and Taiwan Semiconductor (TSM) were at the bottom of the list.
Ehang Holdings (EH) soared 18% today, topping the daily update growth list. Fastly (FSLY) gained over +10%, despite causing a widespread outage before the market opened. Lemonade (LMND) and Cloudflare (NET) round out the top four, both with better than 4% gains. Overall the growth list is about half gainers, half losers. At the bottom of the list are SNAP (SNAP), Moderna (MRNA), DoorDash (DASH), and UP Fintech (TIGR).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Wednesday morning will bring Crude Oil Inventories data after the market opens. In the afternoon, a 10-Year Note Auction may have an impact on interest rates.
GameStop (GME), RH (RH), and Lovesac (LOVE) will release earnings on Wednesday.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
As expected, the Nasdaq met resistance at 14,000 today. It could hold near that level and potentially rise above it tomorrow with the right catalyst.
The three trend-lines (one-day, five-day, and from the 5/13 low) currently point to about the same place with a gain from +0.11% to +0.38% tomorrow.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
We are still seeing some indication that investors are eyeing opportunities to move back into growth stocks but keep a cautious foot out the door if inflation data is worse than expected. That data does not come until Thursday, so it's tough to know what to expect for Wednesday.
Given the resistance at 14,000 today, it's reasonable to expect a sideways move or a step back before moving above that area. Sideways or lower. But we can hope for a surprise in the other direction.
Stay healthy and trade safe!
