Daily Market Update for 8/12

Original Chart

Notes

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

Thursday, August 12, 2021

Facts: +0.35%, Volume higher, Closing range: 94%, Body: 52%
Good: Another test with support at 21d EMA , green body over long lower wick
Bad: Low A/D ratio, lower high
Highs/Lows: Lower high, higher low
Candle: Inside day, green body covers upper half of the candle.
Advanced/Decline: 0.49, two declining stocks for every advancing stock
Indexes:SPX (+0.30%), DJI (+0.04%), RUT (-0.28%), VIX (-3.05%)
Sectors: Health ( XLV +0.79%) and Technology ( XLK +0.57%) at the top. Materials ( XLB -0.16%) and Industrials XLI -0.10%) at the bottom.
Expectation: Sideways

Market Overview

Jobs data helped boost the markets to more records today, with big tech helping lead the way higher. The S&P 500 and Dow Jones Industrial Average closed at record highs for the third day in a row.

The Nasdaq finished the day with a +0.35% gain on slightly higher volume than the previous day. The index declined after open but found support at the 21d exponential moving average line and moved higher the rest of the day. The 52% green body covers the upper half of the candle. The rally in the afternoon resulted in a 94% closing range. A lower high and higher low marks another inside day for the Nasdaq. There were two declining stocks for every advancing stock.

The S&P 500 (SPX) closed the day with a +0.30% gain. The Dow Jones Industrial Average (DJI) climbed by +0.04%. The Russell 2000 (RUT) fell back -0.28%.

The VIXvolatility index declined -3.05%.

Cyclical sectors fell back to the bottom of the sector list after leading for two days. Health ( XLV ) and Technology ( XLK ), which were at the bottom of the list yesterday, bounced back to the top of the sector list today. Materials ( XLB ) and Industrials XLI ) were the worst-performing sectors for the day.

Economic Indicators

Continuing Jobless Claims data was better than expected while Initial Jobless Claims matched the forecast. Produce Price Index Data was higher than expected, adding to inflation worries since higher producer prices eventually get passed along to higher consumer prices.

The US Dollar DXY advanced +0.11%.

The US 30y Treasury yield was flat while the 10y and 2y Treasury yields rose for the day.

High Yield Corporate Bond ( HYG ) and Investment Grade Corporate Bond ( LQD ) prices advanced for a second day.

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

Bitcoin BTCUSD ) declined -3.35%. Ethereum ETHUSD ) declined -4.91%. (Time of writing)

Market Leaders

All four largest mega-caps advanced , with Apple AAPL ) leading the way. Apple gained +2.08% for the day. Microsoft MSFT advanced +1.00%. Alphabet GOOGL ) gained +0.67%. All three seem to be getting good support at their 21d EMA . Amazon ( AMZN ) tested its 200d moving average line before ending the day with a +0.35% advance. The Amazon chart is still in a clear decline.

Salesforce.com ( CRM ), Apple AAPL ), Tesla TSLA ), and Pfizer PFE ) topped the list of mega-caps today, all gaining over 2%. At the bottom of the list are Intel INTC ), Visa (V), Alibaba (BABA), and Exxon Mobil XOM ).

The daily update growth stock is about half gainers and half losers. The top gainers were Palantir ( PLTR ), DraftKings DKNG ), Chewy CHWY ), and Snowflake (SNOW). The worst performing in the list today is NIO NIO ), Robinhood (HOOD), Lemonade LMND ), and GrowGeneration GRWG ).

Investor Sentiment

The put/call ratio dropped to 0.670. The put/call ratio ( PCCE ) is a contrarian indicator of 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 in the Fear range, moving toward neutral.

The NAAIM exposure index remained about the same at 97.55.

Looking ahead

Export and Import Price index data will wrap up the week’s inflation data, while Consumer Sentiment data will give a reading on how consumers are weathering the resurging pandemic.

There are no interesting earnings reports for the daily update on Friday.

There are many earnings reports next week. Keep an eye out for reports from companies in your portfolio.

Trends, Support, and Resistance

The Nasdaq got support again at the 21d exponential moving average line. The same line is supporting three of the largest big tech companies as well.

The one-day trend line and trend from the 7/19 low points to a +0.61% gain for Friday.

The five-day trend line ends with a -0.55% decline.

Wrap-up

Jobs data shows continued strength in the economic recovery, a positive sign for more growth in the second half of the year. After rotating into Infrastructure stocks the past two days, the market snapped back to the technology stocks that dominate the Nasdaq. However, the gains were not broadly shared, with more than two declining stocks for every advancing stock in the index.

The chart is still in a downtrend after hitting a record close last week. Today’s inside day, with a green body and long lower wick, is a positive. However, there is still an open question on whether the Nasdaq will reverse the trend. The expectation for tomorrow is sideways, and we’ll watch where the market wants to go next.

Stay healthy and trade safe!

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