Daily Market Update for 6/30

Original Chart

Notes

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

Wednesday, June 30, 2021

Facts: -0.17%, Volume higher, Closing range: 53%, Body: 12%
Good: Higher low
Bad: Lower high, thin red body, higher volume on decline
Highs/Lows: Lower high, higher low
Candle: Indecisive candle with a thin red body in between two equal wicks
Advanced/Decline: 0.58, more declining stocks than advancing stocks
Indexes:SPX (+0.13%), DJI (+0.61%), RUT (+0.07%), VIX (-1.19%)
Sectors: Energy ( XLE +1.24%) and Consumer Staples ( XLP +0.78%) at the top. Utilities ( XLU -0.19%) and Real Estate ( XLRE -0.78%) at the bottom.
Expectation: Sideways

Market Overview

Solid economic recovery data sent the cyclical sectors higher today while other sectors saw modest gains. Data included positive Nonfarm Employment change, Pending Home Sales, and Crude Oil Inventories. After an indecisive candle yesterday, the S&P 500 set a new record to close the quarter.

The Nasdaq finished with a -0.17% decline on higher volume . The closing range of 53% is right at the middle of the candle, with a thin 12% red body in the middle of equal length wicks. The “spinning top” candle signals indecision in the market, where both buyers and sellers are active during the trading session. There were more declining stocks than advancing stocks on the Nasdaq.

The S&P 500 (SPX) had a similar indecisive spinning top candle yesterday but made a positive move to close the quarter at an all-time high, advancing +0.13% today. The Dow Jones Industrial Average (DJI) gained +0.61%, thanks to a resurgence in cyclical stocks and recovery stocks. The Russell 2000 (RUT) gained +0.07%.

The VIXvolatility index advanced -1.19%.

Energy ( XLE +1.24%) and Consumer Staples ( XLP +0.78%) topped the sector list, while the next three were the other cyclical sectors. Utilities ( XLU -0.19%) and Real Estate ( XLRE -0.78%) were at the bottom of the list.

Economic Indicators

The US Dollar DXY ) rose +0.31% for the day.

The US 30y Treasury yield gained white the 10y stayed the same, and the 2y declined.

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

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

Bitcoin BTCUSD ) gained +4.12%. Ethereum ETHUSD advanced +3.84%.

Investor Sentiment

The put/call ratio rose to 0.557. 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

Apple AAPL ) gained +0.46%, the only of the four largest mega-caps to advance today. Alphabet GOOGL ) declined -0.15%. Microsoft MSFT ) lost -0.18%. Amazon ( AMZN ) fell -0.23%. All remained above the key moving average lines.

Walmart ( WMT ) gained +2.71% today, topping the mega-cap list and helping send the Consumer Staples sector higher. Walt Disney (DIS), Chevron ( CVX ), and JP Morgan Chase ( JPM ) were the next three best performers in the mega-cap list. At the bottom of the list are Abbot Labs ( ABT ), Alibaba (BABA), Facebook FB ), and ASML Holding ( ASML ).

On the daily update growth list, most stocks declined for the day. The top winners include NIO NIO ), Roku (ROKU), Ehang Holdings (EH), and Etsy ETSY ). At the bottom of the list are DoorDash (DASH), which topped the list yesterday, Workday WDAY ), Fiverr ( FVRR ), and MongoDB MDB ).

Looking ahead

Thursday’s economic data includes Initial Jobless Claims and Manufacturing Purchasing Managers Index.

Walgreens Boots ( WBA ) releases earnings on Thursday.

Trends, Support, and Resistance

There seems that support is forming at 14,500. The index has only been above the area for two days, but there were four tests of the support intraday today.

The five-day trend-line points to a +0.54% gain for Thursday.

The trend-line from the 5/12 low leads to a +0.24% advance.

The one-day trend line results in a +0.06% gain.

Wrap-up

It seemed yesterday that the momentum was waning in tech and growth stocks that dominate the Nasdaq. So it was time today for cyclical sectors to get some attention. The rotation was not oversized and did not fundamentally change uptrends for the index or the big mega-caps.

Based on the indecisive candle, the expectation for tomorrow is Sideways. The market needs to decide if it wants to go higher or lower.

Stay healthy and trade safe!

Comments

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