Summary: Growth investors seemed cautious in the first half of the session but turned bullish by the close. The caution showed up in the leading sectors after the market opened. As the morning ended, the action began rotating back toward growth.
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, June 5, 2021
Facts: +0.49%, Volume higher, Closing range: 93%, Body: 76%
Good: Positive move on higher volume, good breadth.
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Small upper and lower wick surrounding a thick green body
Advanced/Decline: 1.47, Three advancing stocks for every two declining stocks
Indexes: SPX (-0.08%), DJI (-0.36%), RUT (+1.43%), VIX (+0.00%)
Sectors: Real Estate (XLRE +0.94%) and Communications (XLC +0.52%) were top. Industrials (XLI -0.69%) and Materials (XLB -1.22%) were bottom.
Expectation: Sideways or Higher
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Market Overview
Growth investors seemed cautious in the first half of the session but turned bullish by the close. The caution showed up in the leading sectors after the market opened. As the morning ended, the action began rotating back toward growth.
The Nasdaq gained +0.49%, on higher volume. A short lower and upper wick surrounding a 76% green body represents the steady climb throughout the day. The closing range of 93% came after the index made a late afternoon intraday high, dipped, and quickly recovered. There were three advancing stocks for every two declining stocks.
The Russell 2000 (RUT) small caps did very well, with the index gaining +1.43% for the day. The FTSE Russell published the initial 3000 reconstitution list after market close on Friday, which possibly drew focus to the stocks in the list. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) were weighed down by cyclical sectors, declining at -0.08% and -0.36%.
The VIX volatility moved intraday but closed where it closed on Friday.
Real Estate (XLRE +0.94%), Health (XLV +0.36%), and Utilities (XLU +0.18%) led the sector list in the morning. Growth sectors performed better in the afternoon, with Communications (XLC +0.52%) moving to second place. The cyclical sectors performed the worst, with Industrials (XLI -0.69%) and Materials (XLB -1.22%)
at the bottom of the list.
The Health sector had a considerable advance in the morning on the excitement that Eli Lilly would get FDA approval for an Alzheimer's Therapy.
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Economic Indicators
The US Dollar (DXY) declined -0.18%.
The US 30y, 10y, and 2y Treasury yields all advanced.
High Yield Corporate Bond (HYG) prices advanced while Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) declined slightly.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -6.22%. Ethereum (ETHUSD) declined -4.32%.
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Investor Sentiment
The put/call ratio rose to 0.514. 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 just to the fear side of neutral.
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Market Leaders
Microsoft (MSFT) successfully tested its 50d MA before gaining +1.20% for the day. Alphabet (GOOGL) is trading above its 21d EMA and 50d MA and gained +0.36% today. Apple (AAPL) could not move above its 21d EMA, ending the day with a +0.01% gain. Amazon (AMZN) is trading below both key moving average lines, declining -0.26% today.
Eli Lilly (LLY) soared back into the mega-cap list and went straight to the top with a +10.15% gain today, boosting the Health sector. Facebook (FB), Oracle (ORCL), Microsoft, and Tesla (TSLA) were the next four, each with more than 1% gains. United Health (UNH), Taiwan Semiconductor (TSM), Alibaba (BABA), and PayPal (PYPL) were at the bottom of the list. There were more declining mega-caps than advancing mega-caps.
Gainers dominated the daily update growth stock list. Fastly (FSLY), Peloton (PTON), Moderna (MRNA), DraftKings (DKNG) topped the list. JD.com (JD), Zynga (ZNGA), FUTU Holding (FUTU), and Solar Edge (SEDG) were at the bottom of the list.
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Looking ahead
Trade Balance data for April will be released before the market opens on Tuesday. After the market opens, the JOLTS Job Openings report for April will be available. There is a 3-Year Note Auction in the afternoon, and Weekly Crude Oil Stock will be released after the market closes.
There are no relevant earnings reports for the daily update.
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Trends, Support, and Resistance
The Nasdaq stayed above the 13,700 area today. The index is heading toward expected resistance at the round number of 14,000.
The one-day trend-line and the trend-line from the low on 5/13 both point to a +0.41% on Tuesday.
Following the five-day trend-line would result in a -0.47% decline.
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Wrap-up
There was some hesitation among growth investors early in the day, but perhaps the lack of negative news in the morning warmed them back into the market by afternoon. Many small caps did well all day after the Russell 3000 began the annual reconstitution process where stocks are added and removed from the index. The initial list was released after the market close this past Friday.
The gain on higher volume with breadth across the stocks in the Nasdaq is all a positive. Still, it seems investors could be a bit more greedy, which may come with a suitable catalyst. Trade Balance data on Tuesday is not likely to be the catalyst. Consumer Price Index data, if not surprisingly high, could alleviate inflation fears and help embolden investors back into growth.
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=-
Monday, June 5, 2021
Facts: +0.49%, Volume higher, Closing range: 93%, Body: 76%
Good: Positive move on higher volume, good breadth.
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Small upper and lower wick surrounding a thick green body
Advanced/Decline: 1.47, Three advancing stocks for every two declining stocks
Indexes: SPX (-0.08%), DJI (-0.36%), RUT (+1.43%), VIX (+0.00%)
Sectors: Real Estate (XLRE +0.94%) and Communications (XLC +0.52%) were top. Industrials (XLI -0.69%) and Materials (XLB -1.22%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Growth investors seemed cautious in the first half of the session but turned bullish by the close. The caution showed up in the leading sectors after the market opened. As the morning ended, the action began rotating back toward growth.
The Nasdaq gained +0.49%, on higher volume. A short lower and upper wick surrounding a 76% green body represents the steady climb throughout the day. The closing range of 93% came after the index made a late afternoon intraday high, dipped, and quickly recovered. There were three advancing stocks for every two declining stocks.
The Russell 2000 (RUT) small caps did very well, with the index gaining +1.43% for the day. The FTSE Russell published the initial 3000 reconstitution list after market close on Friday, which possibly drew focus to the stocks in the list. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) were weighed down by cyclical sectors, declining at -0.08% and -0.36%.
The VIX volatility moved intraday but closed where it closed on Friday.
Real Estate (XLRE +0.94%), Health (XLV +0.36%), and Utilities (XLU +0.18%) led the sector list in the morning. Growth sectors performed better in the afternoon, with Communications (XLC +0.52%) moving to second place. The cyclical sectors performed the worst, with Industrials (XLI -0.69%) and Materials (XLB -1.22%)
at the bottom of the list.
The Health sector had a considerable advance in the morning on the excitement that Eli Lilly would get FDA approval for an Alzheimer's Therapy.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.18%.
The US 30y, 10y, and 2y Treasury yields all advanced.
High Yield Corporate Bond (HYG) prices advanced while Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) and Gold (GOLD) advanced.
Crude Oil (CRUDEOIL1!) declined slightly.
Timber (Wood) declined.
Copper (COPPER1!) and Aluminum (ALI1!) declined.
Bitcoin (BTCUSD) declined -6.22%. Ethereum (ETHUSD) declined -4.32%.
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Investor Sentiment
The put/call ratio rose to 0.514. 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 just to the fear side of neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Microsoft (MSFT) successfully tested its 50d MA before gaining +1.20% for the day. Alphabet (GOOGL) is trading above its 21d EMA and 50d MA and gained +0.36% today. Apple (AAPL) could not move above its 21d EMA, ending the day with a +0.01% gain. Amazon (AMZN) is trading below both key moving average lines, declining -0.26% today.
Eli Lilly (LLY) soared back into the mega-cap list and went straight to the top with a +10.15% gain today, boosting the Health sector. Facebook (FB), Oracle (ORCL), Microsoft, and Tesla (TSLA) were the next four, each with more than 1% gains. United Health (UNH), Taiwan Semiconductor (TSM), Alibaba (BABA), and PayPal (PYPL) were at the bottom of the list. There were more declining mega-caps than advancing mega-caps.
Gainers dominated the daily update growth stock list. Fastly (FSLY), Peloton (PTON), Moderna (MRNA), DraftKings (DKNG) topped the list. JD.com (JD), Zynga (ZNGA), FUTU Holding (FUTU), and Solar Edge (SEDG) were at the bottom of the list.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Trade Balance data for April will be released before the market opens on Tuesday. After the market opens, the JOLTS Job Openings report for April will be available. There is a 3-Year Note Auction in the afternoon, and Weekly Crude Oil Stock will be released after the market closes.
There are no relevant earnings reports for the daily update.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq stayed above the 13,700 area today. The index is heading toward expected resistance at the round number of 14,000.
The one-day trend-line and the trend-line from the low on 5/13 both point to a +0.41% on Tuesday.
Following the five-day trend-line would result in a -0.47% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
There was some hesitation among growth investors early in the day, but perhaps the lack of negative news in the morning warmed them back into the market by afternoon. Many small caps did well all day after the Russell 3000 began the annual reconstitution process where stocks are added and removed from the index. The initial list was released after the market close this past Friday.
The gain on higher volume with breadth across the stocks in the Nasdaq is all a positive. Still, it seems investors could be a bit more greedy, which may come with a suitable catalyst. Trade Balance data on Tuesday is not likely to be the catalyst. Consumer Price Index data, if not surprisingly high, could alleviate inflation fears and help embolden investors back into growth.
Stay healthy and trade safe!
