Daily Market Update for 6/21

Original Chart

Notes

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

Monday, June 21, 2021

Facts: +0.79%, Volume higher, Closing range: 95%, Body: 49%
Good: Higher high, long lower wick from bullish rebound off morning low
Bad: Lower low, otherwise not much
Highs/Lows: Higher high, lower low
Candle: Half green body with long lower wick, small upper wick
Advanced/Decline: 1.03, One advancing stock for each declining stock
Indexes:SPX (+1.40%), DJI (+1.76%), RUT (+2.16%), VIX (-13.66%)
Sectors: Energy ( XLE +3.21%) and Financials ( XLF +1.93%) were top. Utilities ( XLU +0.51%) and Consumer Staples ( XLP +0.49%) were bottom.
Expectation: Sideways or Higher

Market Overview

Investors moved back into equities on Monday, helping markets rebound from Friday’s sell-off. All major indexes and sectors moved higher while stocks ended the day balanced across gains and losses.

The Nasdaq closed with a +0.79% gain. The volume was lower than Friday’s unusually high volume . The 49% body is in the upper half of the candle, above a long lower wick formed just after the market open. The index dropped after open, but found support around 14,000 and moved higher the rest of the day. There were about the same number of advancing stocks as declining stocks.

The Dow Jones Industrial Average (DJI) gained +1.76%, closing a gap down on Friday. The S&P 500 (SPX) gained +1.40% and produced a Marubozu White bullish candle, forming no upper or lower wick. The Russell 2000 (RUT) erased Friday’s loss with a +2.16% gain today.

The VIXvolatility index declined -13.66%.

All sectors moved higher today, with cyclical sectors leading the list. Energy ( XLE +3.21%) and Financials ( XLF +1.93%) were at the top of the list. Industrials XLI +1.8%) and Materials ( XLB +1.63%) were second and third. After heavy selling of cyclical sectors, we expected that some rotation back into these sectors would happen. These are still important sectors for a full economic recovery. Utilities ( XLU +0.51%) and Consumer Staples ( XLP +0.49%) were at the bottom, marking fewer defensive moves than last week.

Economic Indicators

The US Dollar DXY ) pulled back a bit after gaining 2% last week. Today it declined -0.52%.

The US 30y and 10y Treasury Yields rose after declining last week. The 2y Treasury yield remained about the same.

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

Silver SILVER ) and Gold GOLD ) rose.
Crude Oil (CRUDEOIL1!) advanced .
Timber (Wood) rose +2.33% after a few weeks of decline.
Copper (COPPER1!) and Aluminum (ALI1!) also advanced .

Bitcoin BTCUSD ) declined -9.62%. Ethereum ETHUSD ) declined -14.92%. (Time of writing)

Investor Sentiment

The put/call ratio dropped to 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. Below that level is overly bullish .

The CNN Fear & Greed index is on the fear side.

Market Leaders

Amazon ( AMZN ) was the only of the largest four mega-caps to decline today, losing -0.94% on Prime Day. Apple AAPL ) retested the 50d moving average line and then moved higher, gaining +1.41%. Microsoft MSFT ) rose +1.23%. Alphabet GOOGL ) gained +1.42%.

Exxon Mobil XOM ) and Chevron ( CVX ) topped the list of mega-caps, filled with mostly gainers for today. Bank of America ( BAC ) and Oracle ORCL ) fill out the top four. At the bottom of the list were Taiwan Semiconductor ( TSM ), Nvidia NVDA ), Amazon, and Netflix NFLX ).

The daily update growth list was divided almost evenly among gainers and losers. Ehang Holdings (EH), RH RH ), Roku (ROKU), and DoorDash (DOOR) were the top four, each gaining over 3.5% for the day. At the bottom of the list were UP Fintech ( TIGR ), Pinterest (PINS), FUTU Holding ( FUTU ), and CrowdStrike ( CRWD ).

Looking ahead

Existing Home Sales for May gets released on Tuesday, after the market open. In the afternoon, Jerome Powell testifies before congress. API Weekly Crude Oil Stock is updated after the market close.

There are no relevant earnings reports for the daily update on Tuesday.

Trends, Support, and Resistance

The Nasdaq found support again at 14,000 and then headed back toward 14,200, range-bound for the past week.

The one-day trend-line and the trend-line from the 5/12 low point to a +0.82% advance on Tuesday would break the range and set a new all-time high.

The five-day trend-line ends with a -0.21% declined for tomorrow.

Wrap-up

There was a lot of debate over the weekend over the health of the markets. The story isn’t over, but today was a move in the right direction toward a continued bull market with new support for growth after the Fed turned hawkish.

For tomorrow, we’ll look for sideways or higher. If higher, a clear break into a new all-time high on higher volume would be a clear bullish signal.

Stay healthy and trade safe!

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