Daily Market Update for 6/28

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 28, 2021

Facts: +0.98%, Volume lower, Closing range: 95%, Body: 94%
Good: Very bullish candle on sets a new all-time high
Bad: Lower volume , low A/D ratio
Highs/Lows: Higher high, higher low
Candle: Mostly green body with no lower wick, small upper wick
Advanced/Decline: 0.59, three declining stocks for every two advancing stocks
Indexes:SPX (+0.23%), DJI (-0.44%), RUT (-0.52%), VIX (+0.90%)
Sectors: Communications ( XLC +1.13%) and Technology ( XLK +1.05%) at top. Financials ( XLF -0.73%) and Energy ( XLE -2.28%) were bottom.
Expectation: Sideways or Higher

Market Overview

The S&P 500 and Nasdaq moved higher today, setting more records, while the Dow Jones Industrial Average and Russell 2000 took a step back. New fears of pandemic lockdowns in Asia sent Energy and Industrial stocks lower.

The Nasdaq finished the day with a +0.98% gain, producing a bullish green candle that is primarily green body with no lower wick and a small upper wick. Volume was lower than Friday, but Friday’s volume was exceptionally high. The closing range of 95% shows bullish support into the close. Other than a slight dip in the early afternoon, investors were in a buying mood all day. Still, there were three declining stocks for every two advancing stocks.

The S&P 500 (SPX) gained +0.23%, carried higher by big tech stocks. The Dow Jones Industrial Average (DJI) declined -0.44%, weighed down by the Energy and Industrial sectors. The Russell 2000 (RUT) fell -0.52%, following through with a bearish candle on Friday that produced a long upper wick.

The VIXvolatility index advanced +0.90%.

Communications ( XLC +1.13%) and Technology ( XLK +1.05%) were the top-performing sectors for the day. Utilities ( XLU +0.64%) led briefly in the morning before being overtaken by Technology. Communications took the lead late in the day after a judge threw out antitrust cases by the FTC against Facebook . Financials ( XLF -0.73%) and Energy ( XLE -2.28%) were at the bottom of today’s sector list. Industrials XLI -0.53%) were also near the bottom. New pandemic lockdown fears impacted the three sectors. It is also likely that investors are taking profits in these sectors to close the quarter. They are also moving back into growth stocks which analysts expect to have strong quarterly results.

Economic Indicators

The US Dollar DXY ) rose +0.08% for the day.

The US 30y, 10y, and 2y Treasury Yields declined.

High Yield Corporate Bond ( HYG ) prices declined just slightly for the day. Investment Grade Corporate Bond ( LQD ) prices advanced .

Silver SILVER ) and Gold GOLD ) declined.
Crude Oil (CRUDEOIL1!) declined.
Timber (Wood) declined.
Copper (COPPER1!) declined, and Aluminum (ALI1!) advanced .

Bitcoin BTCUSD ) declined -0.61%. Ethereum ETHUSD advanced -5.00%.

Investor Sentiment

The put/call ratio rose to 0.574. 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, moving back toward neutral.

Market Leaders

Although Alphabet GOOGL ) struggled to end with a +0.2% advance, all four largest mega-caps had gains for the day. Alphabet gained in the afternoon along with the Communications sector by the Facebook news. Apple AAPL ) and Amazon ( AMZN ) had identical gains of +1.25%. Finally, Microsoft MSFT ) ticked off another new all-time high and closed with a +1.40% gain.

Nvidia NVDA ), Facebook FB ), Intel INTC ), and Abbot Labs ( ABT ) topped the mega-cap list. Visa (V), Mastercard (MA), Exxon Mobile ( XOM ), and Chevron ( CVX ) were at the bottom of the list.

Most of the growth stocks in the daily update list advanced . Ehang Holdings (EH) and Grow Generation ( GRWG ) topped the list with greater than 11% gains. NIO NIO ) and Etsy ETSY ) were also in the top four. At the bottom of the list were Penn National Gaming ( PENN ), JD .com ( JD ), SNAP (SNAP), and Sumo Digital (SUMO).

Carnival Cruise Lines ( CCL ) lost -7.04%. Delta Airlines (DAL) declined -2.95%. Avis (CAR) dropped -3.15%. That’s representative of the new pandemic lockdown fears impacting these recovery stocks.

Looking ahead

Consumer Confidence numbers for June will be released on Tuesday, after the market open.

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

Trends, Support, and Resistance

The Nasdaq had a small gap up today and a solid move above 14,500. That area may need to be tested again before going higher.

The five-day trend-line points to a +0.29% gain for Tuesday.

The one-day trend line results in a +0.12% gain.

The trend-line from the 5/12 low leads to a -0.34% decline.

Wrap-up

We saw today a strong follow-thru of last week’s gains in the Nasdaq. Big tech and growth stocks drove the small gap-up and all-day bullish activity, but stocks did not broadly share the gains. The decliners outnumbering the advancers was likely due to the pandemic fears and some investors taking profits as the quarter ends.

Based on the chart, the expectation is for sideways or higher tomorrow. However, the pandemic fears won’t resolve overnight, and there may be more profit-taking as the quarter ends. Nevertheless, the moves into big tech and growth stocks should hold as investors made those moves in anticipation of a strong quarterly earnings season which is still a few weeks off for those companies.

Stay healthy and trade safe!

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