Daily Market Update for 5/3
Summary: The cyclical sectors soared. The others did not. A rotation into reopening and cyclical stocks played well for all the major indexes except the Nasdaq which is heavy in big-tech and growth stocks.
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, May 3, 2021
Facts: -0.48%, Volume lower, Closing range: 8%, Body: 85%
Good: Held above the 21d EMA
Bad: Lower high, lower low, could not stay above 14,000
Highs/Lows: Lower high, lower low
Candle: Thick red body with small upper and lower wicks
Advance/Decline: Slightly more declining stocks than advancing stocks
Indexes: SPX (+0.27%), DJI (+0.70%), RUT (+0.49%%), VIX (-1.61%)
Sectors: Energy (XLE +2.75%) and Materials (XLB +1.49%) were top sectors. Communications (XLC -0.53%) and Real Estate (XLRE -0.54%) were bottom.
Expectation: Sideways or Lower
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Market Overview
The cyclical sectors soared. The others did not. A rotation into reopening and cyclical stocks played well for all the major indexes except the Nasdaq which is heavy in big-tech and growth stocks.
The Nasdaq closed down -0.48% on lower volume. A brief rally attempt in the morning brought the index above 14,000 before selling off and testing the 21d EMA several times before closing just above the intraday lows. The thick red body covers 85% of the candle is surrounded by a short upper and lower wick with a closing range of 8%. There were slightly more declining stocks than advancing stocks.
The Dow Jones Industrial average (DJI) was the best performing index of the day, gaining +0.70%. The S&P 500 (SPX) gained +0.27% and had another record close. The Russell 2000 (RUT) advanced +0.49%.
The VIX volatility index declined -1.61%.
Energy (XLE +2.75%) and Materials (XLB +1.49%) were the top sectors. All cyclical sectors gained for the day. Communications (XLC -0.53%) and Real Estate (XLRE -0.54%) were at the bottom.
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Economic Indicators
The US Dollar (DXY) declined -0.37%.
The US 30y treasury bond and 10y and 2y note yields all declined.
High Yield Corporate Bond (HYG) prices declined while the Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) advanced. Copper (COPPER1!) advanced while Aluminum (ALI1!) remained flat.
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Investor Sentiment
The put/call ratio dropped to 0.577. 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. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The CNN Fear & Greed index moved back toward neutral.
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Market Leaders
Apple (AAPL) was the only gainer of the biggest four mega-caps with a +0.82% advance. Microsoft (MSFT) declined -0.13% after attempting to rise above the 21d EMA but failing. Amazon (AMZN) was down -2.33%, closing just above the 21d EMA. Alphabet (GOOGL) declined -0.44%.
Pfizer (PFE), Exxon Mobil (XOM), Home Depot (HD) and Oracle (ORCL) were the top mega-caps for the day. PayPal (PYPL), Amazon (AMZN), Salesforce.com (CRM) and Tesla (TSLA) were at the bottom of the list.
It was another disappointing day for growth stocks, but there were some winners. Moderna (MRNA), DR Horton (DHI), RH (RH), and Penn National Gaming (PENN) topped the list. UP Fintech (TIGR), DataDog (DDOG), Digital Turbine (APPS), and Okta (OKTA) were at the bottom of the list, all with over 5% of declines.
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Looking ahead
Tuesday will bring Exports, Imports and Trade Balance data before market open. Factory Orders data will be released after market open and API Weekly Crude Oil Stock levels will be released after market close.
Tuesdays earnings reports will include Pfizer (PFE), T-Mobile (TMUS), CVS (CVS), Zillow (Z), Verisk (VRSK), Lyft (LYFT), Skillz (SKLZ).
The earnings list is long, so check your portfolio for earnings events so you are not surprised.
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Trends, Support and Resistance
The index is below the 14,000 support/resistance area. Without a boost, we can expect there to be resistance before passing back above the line again.
The trend line from the 3/5 low, points to a +2.16% advance, that would be back above 14,000 and just below the all-time high.
The five-day trend line points to a sideways move with a small -0.05% decline.
The one-day trend line points to a -0.75% loss.
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Wrap-up
Investors are back into reopening trades, sending cyclicals back to the top of the sector list today. The rotation was tough for big tech and growth stocks. But manufacturing data in the morning brought yields and the US Dollar down which could be good for the growth plays in the coming days.
There are lots of earnings reports this week. Watch for positive reports and how the market reacts to them. Will last week's cold reception of positive reports continue?
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, May 3, 2021
Facts: -0.48%, Volume lower, Closing range: 8%, Body: 85%
Good: Held above the 21d EMA
Bad: Lower high, lower low, could not stay above 14,000
Highs/Lows: Lower high, lower low
Candle: Thick red body with small upper and lower wicks
Advance/Decline: Slightly more declining stocks than advancing stocks
Indexes: SPX (+0.27%), DJI (+0.70%), RUT (+0.49%%), VIX (-1.61%)
Sectors: Energy (XLE +2.75%) and Materials (XLB +1.49%) were top sectors. Communications (XLC -0.53%) and Real Estate (XLRE -0.54%) were bottom.
Expectation: Sideways or Lower
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
The cyclical sectors soared. The others did not. A rotation into reopening and cyclical stocks played well for all the major indexes except the Nasdaq which is heavy in big-tech and growth stocks.
The Nasdaq closed down -0.48% on lower volume. A brief rally attempt in the morning brought the index above 14,000 before selling off and testing the 21d EMA several times before closing just above the intraday lows. The thick red body covers 85% of the candle is surrounded by a short upper and lower wick with a closing range of 8%. There were slightly more declining stocks than advancing stocks.
The Dow Jones Industrial average (DJI) was the best performing index of the day, gaining +0.70%. The S&P 500 (SPX) gained +0.27% and had another record close. The Russell 2000 (RUT) advanced +0.49%.
The VIX volatility index declined -1.61%.
Energy (XLE +2.75%) and Materials (XLB +1.49%) were the top sectors. All cyclical sectors gained for the day. Communications (XLC -0.53%) and Real Estate (XLRE -0.54%) were at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) declined -0.37%.
The US 30y treasury bond and 10y and 2y note yields all declined.
High Yield Corporate Bond (HYG) prices declined while the Investment Grade Corporate Bond (LQD) prices advanced.
Silver (SILVER) and Gold (GOLD) advanced. Crude Oil (CRUDEOIL1!) advanced. Timber (WOOD) advanced. Copper (COPPER1!) advanced while Aluminum (ALI1!) remained flat.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio dropped to 0.577. 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. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The CNN Fear & Greed index moved back toward neutral.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Apple (AAPL) was the only gainer of the biggest four mega-caps with a +0.82% advance. Microsoft (MSFT) declined -0.13% after attempting to rise above the 21d EMA but failing. Amazon (AMZN) was down -2.33%, closing just above the 21d EMA. Alphabet (GOOGL) declined -0.44%.
Pfizer (PFE), Exxon Mobil (XOM), Home Depot (HD) and Oracle (ORCL) were the top mega-caps for the day. PayPal (PYPL), Amazon (AMZN), Salesforce.com (CRM) and Tesla (TSLA) were at the bottom of the list.
It was another disappointing day for growth stocks, but there were some winners. Moderna (MRNA), DR Horton (DHI), RH (RH), and Penn National Gaming (PENN) topped the list. UP Fintech (TIGR), DataDog (DDOG), Digital Turbine (APPS), and Okta (OKTA) were at the bottom of the list, all with over 5% of declines.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Tuesday will bring Exports, Imports and Trade Balance data before market open. Factory Orders data will be released after market open and API Weekly Crude Oil Stock levels will be released after market close.
Tuesdays earnings reports will include Pfizer (PFE), T-Mobile (TMUS), CVS (CVS), Zillow (Z), Verisk (VRSK), Lyft (LYFT), Skillz (SKLZ).
The earnings list is long, so check your portfolio for earnings events so you are not surprised.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The index is below the 14,000 support/resistance area. Without a boost, we can expect there to be resistance before passing back above the line again.
The trend line from the 3/5 low, points to a +2.16% advance, that would be back above 14,000 and just below the all-time high.
The five-day trend line points to a sideways move with a small -0.05% decline.
The one-day trend line points to a -0.75% loss.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
Investors are back into reopening trades, sending cyclicals back to the top of the sector list today. The rotation was tough for big tech and growth stocks. But manufacturing data in the morning brought yields and the US Dollar down which could be good for the growth plays in the coming days.
There are lots of earnings reports this week. Watch for positive reports and how the market reacts to them. Will last week's cold reception of positive reports continue?
Stay healthy and trade safe!
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