Daily Market Update for 4/29

Original Chart

Notes

Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.

Thursday, April 29, 2021

Facts: +0.22%, Volume higher, Closing range: 50%, Body: 47%
Good: New all-time high, higher volume , recovery from morning selling in afternoon
Bad: Couldn’t hold the high, lower low
Highs/Lows: Higher high, lower low
Candle: Outside day, long lower wick with a thick red body in upper half of candle
Advance/Decline: Just slightly more declining stocks than advancing stocks
Indexes:SPX (+0.68%), DJI (+0.71%), RUT (-0.38%), VIX (+1.91%)
Sectors: Communications ( XLC +2.77%) and Financial ( XLF +1.78%) were top. Technology ( XLK -0.08%) and Health ( XLV -0.40%) were bottom.
Expectation: Sideways or Higher

Market Overview

We got higher, we got lower and we got sideways. It was a whiplash day for the markets that saw record highs be broken right before a painful morning sell-off. Then the afternoon rally brought most of the major indexes back into positive territory and left the S&P 500 at another all-time record close.

The Nasdaq ended the day with a +0.22% gain, a close that is within the highs and lows of the week, marking a sideways move. Volume was higher as the morning high set a record for the index, before selling off to a morning low which is also a low for the week. Finally in the afternoon, the index climbed back to the positive, leaving us with a long lower wick underneath a 47% red body and 50% closing range. There were nearly two declining stocks for every advancing stock.

The S&P 500 closed at a record high, gaining +0.68% for the day. The Dow Jones Industrial average (DJI) closed the day with a +0.71% gain. The Russell 2000 (RUT) underperformed the other indexes for the first time in several days, losing -0.38%.

The VIX volatility index advanced +1.91%.

Communications ( XLC +2.77%) was a top sector thanks to earning reports from Alphabet earlier in the week and Facebook yesterday. Financials ( XLF +1.78%) was the second best of the day. Technology ( XLK -0.08%) and Health ( XLV -0.40%) were the only losing sectors for the day.

Economic Indicators

The US Dollar DXY ) had advanced +0.04%.

The US 30y treasury bond and 10y note yield advanced while the 2y note yield both declined. The yield curve is beginning to steepen again with the spread between long term and short term yields widening over the past week.

High Yield Corporate Bond ( HYG ) prices rose while the Investment Grade Corporate Bond ( LQD ) prices declined.

Silver SILVER ) and Gold GOLD ) declined. Crude Oil (CRUDEOIL1!) advanced . Timber (WOOD) advancedslightly. Copper (COPPER1!) declined while Aluminum (ALI1!) advanced .

Investor Sentiment

The put/call ratio ended the day at 0.585. 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 is moving more toward the extreme greed range.

The NAAIM money manager exposure index topped for the first time since February, coming in at 103.72 this week.

Market Leaders

Alphabet GOOGL ) it’s advance after a great earnings report earlier this week, gaining +1.53% today. Amazon ( AMZN ) gained +0.37% ahead of earnings today. Aftermarket the stock is +2.3% on a positive reaction from earnings . Apple AAPL ) ended the day with a -0.07% after a positive earnings report that sent the stock up +2.61% before fading. Microsoft MSFT ) continues a second day of declines, losing -0.81% today and closing below its 21d EMA .

Facebook FB ) topped the list of mega-caps with a +7.3% gain and helping the communications sector top the sector list for the day. Comcast ( CMCSA ), Bank of America ( BAC ) and Alphabet GOOGL ) also topped the list with greater than 2% gains. At the bottom of the list were Tesla TSLA ), Mastercard (MA), PayPal ( PYPL ) and Alibaba (BABA).

It was not a great day for growth stocks, with most of the stocks in the daily update list declining for the day. Pinterest (PINS), Dr Horton ( DHI ), Zynga ZNGA ) were among the few gainers. MongoDB MDB ), Ehang Holdings (EH), NIO NIO ) and ServiceNow (NOW) had losses over 5% with ServiceNow declining -9.37%.

Looking ahead

On Thursday, new GDP data will be released which is expected to be 6.5%. Initial Jobless Claims data will hopefully continue to fall. Pending Home Sales data will be released after market open.

Friday will close the big earnings week with Alibaba (BABA), Exxon Mobil XOM ), AbbVie ABBV ), Chevron ( CVX ), AstraZeneca ( AZN ), Johnson Controls ( JCI ), and Komatsu KMTUY ).

Be sure to check your portfolio for earnings reports so you are not surprised.

Trends, Support and Resistance

The index set a new all-time high today, then dipped between the 14,000 support area before the bulls came in to end back above the key level.

The trend line from the 3/5 low, points to a +0.99% advance. The five-day trend line results in a +0.71% gain. Despite the lower close, the one-day trend line points to a +0.20% for tomorrow.

Wrap-up

It was a whiplash day with a mixed finish. A record close for the S&P 500 , an indecisive candle on the RUT, and a mediocre finish for the Nasdaq. Move earnings have been met with positive reaction after hours only to turn into negative moves the following day. But overall the market is still in an uptrend.

We’ll look for momentum from the today’s afternoon to carry into tomorrow’s morning, hopefully boosted by positive economic news around employment and consumer sentiment and behaviors. The expectations is still for sideways or higher and if we get lower, we’ll revisit what might be driving investors in one direction or the other.

Stay healthy and trade safe!

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