Daily Market Update for 11/24

Original Chart

Trend lines drawn from the 10/30 bottom (18d), 11/18 (5d), and today 11/24 (1d).

If you have ideas to make the daily update better, please let me know in the comments.

I do occasionally have some errors or typos and will correct them in my blog or in the comments on TradingView. I do not have an editor and do this in my free time.

Tuesday, November 24, 2020

It’s time to begin, isn’t it?

Facts: +1.31% higher, Volume higher, Closing range: 93%, Body: 52%
Good: Break through 12,000 on higher volume
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Think green body in upper half over a long lower wick
Advance/Decline: 2.10, two advancing stock for every declining stock
Sectors: Energy ( XLE +5.14%) and Financials ( XLF +3.50%) were top. Real Estate ( XLRE -0.05%) was the only losing sector.
Expectation: Higher

Market Overview

The Nasdaq finally blew through the 12,000 resistance level today while the other indexes set new highs. The Dow Jones Industrial closed above 30,000 for the first time in its long history. The buying was broad with two advancing stocks for every declining stocks and included some recovery of the mega-caps after so much recent focus on small-caps . The Nasdaq closed with a +1.31% gain on higher volume . The 52% green body in the upper half of the wick resulted in a 93% closing range after the index hit a morning low and never looked back.

Indexes and Sectors

The Russell 2000 (RUT +1.94%) remains the leading index setting daily all-time highs. The Dow Jones Industrial (DJI +1.54%) closed above 30,000 for the first time in its history. The S&P 500 SPX +1.62%) also outperformed the Nasdaq on a great day for all the indexes.

Energy ( XLE +5.14%) was the top sector again on Tuesday. Financials ( XLF +3.50%) also did very well. Materials ( XLB +2.49%), Communications ( XLC +2.05%), and Industrials XLI +1.75%) all outpaced the S&P 500 . Real Estate ( XLRE -0.05%) was the only sector to have a loss for the day.

The VIX volatility index decreased by -4.50%, hitting its lowest intraday level since August.

Market Indicators

snapshot

Both yields and spreads rose for the US 30-year and US 10-year Treasury bonds.

Corporate Bond yields fell for the day as investors are seeing more positive signs for economic recovery.

snapshot

The US dollar DXY -0.37%) fell back and is testing recent lows from August. The currency is likely being impacted by lower than expected Consumer Confidence numbers.

Silver SILVER -1.45%) and Gold GOLD -1.64%) continued to slide lower. Crude Oil Futures (CRUDEOIL1! +4.32%) is at its highest since August. Timber (WOOD +1.62%) also ended the day with gains.

snapshot

The put/call ratio dropped to 0.505 showing very bullish sentiment. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. 0.7 is considered normal. As it approaches 0.60 (overly bullish ) and below, watch for a reversal in the market.

Market Leaders

snapshot

Apple AAPL +1.16%), Microsoft MSFT +1.78%), Amazon ( AMZN +0.63%) and Alphabet GOOGL +2.10%) all had gains for the day. Apple was unable to close above the 50d MA while Microsoft broke through and closed above both the 50d MA and 21d EMA . Amazon continues to trade just below the 21d EMA as the line has been acting as resistance for the stock recently. Most mega-caps had gains for the day. Tesla TSLA +6.43%) continued to rise on the way to being added to the S&P 500 Banc of America ( BAC +5.81%) and JPMorgan Chase ( JPM +4.62%) helped drive the Financials sector gains. Walt Disney (DIS +3.77%) had another day of big gains.

Growth stocks were mixed with many growth investor portfolios not benefiting from the day’s gains. Companies like Tesla and PayPal ( PYPL +2.58%) had gains. Other recent favorites such as Fiverr ( FVRR -2.63%), NIO NIO -3.38%), SNAP (SNAP -2.14%), Pinterest (PINS -2.68%) had losses for the day. Rotations are common during rallies, but never fun unless your stocks are the direction of the rotation.

Looking ahead

Tomorrow is the last full day for the markets this week. Thursday the markets will be closed and Friday they will only be open until 1pm.

Wednesday will bring updates on Initial Jobless Claims which will give a view of the continuing impacts from the pandemic on employment. Core Durable Goods Orders will give a look into manufacturing activity. The monthly GDP update also comes tomorrow which could have further impact on the US Dollar .

There are only a few earnings reports tomorrow, none that are notable for the daily update.

Trends, Support and Resistance

The index finally closed above the resistance area at 12,000 and I removed the long trend line from the 10/12 pivot day.

If the trend continues today, the index could meet up with the trend from the 9/30 bottom at +1.07% and set a new all-time high.

A small pull back to the 5d trend line would result in a -0.50% decline.

Wrap-up

The lower than expected Consumer Confidence data did not phase the markets today. In fact, the data could be a reason the US Dollar declined in value causing large global mega caps to rise in price, driving the DJI to new record levels. But that did not come at the expense of small caps with the RUT still outperforming all the other indexes.

One more full day of trading this week. Will investors rush to safe havens in Utilities ( XLU ) like they have the last few weekends, or hold onto assets through the holiday weekend?

Take care!

Comments

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