Daily Market Update for 9/13

Original Chart

Notes

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

Monday, September 13, 2021

Facts: -0.07%, Volume higher, Closing Range: 40%, Body: 57% Red
Good: Closed above the 21d EMA
Bad: Two dips below 21d EMA , couldn’t hold intraday high at open
Highs/Lows: Lower high, Lower low
Candle: Red body in upper half of candle with a long lower wick
Advance/Decline: 0.73, more declining than advancing
Indexes:SPX (+0.23%), DJI (+0.76%), RUT (+0.59%), VIX (-7.54%)
Sector List: Energy ( XLE +2.87%) and Financials ( XLF +1.14%) at the top. Utilities ( XLU -0.18%) and Health ( XLV -0.62%) at the bottom.
Expectation: Sideways or Lower

Market Overview

The OPEC Monthly Report provided a positive outlook for the economy, stating that oil demand would exceed pre-pandemic levels next year. That sent oil futures and the Energy sector higher and turned investors more optimistic on value stocks and the re-opening trade.

The Nasdaq closed the day with a -0.07% decline. Volume was higher than the previous day. The index started with a gain but quickly sold as investors rotated out of growth stocks and back into value stocks. The Nasdaq dipped below its 21d exponential moving average twice but was able to close above the line. The closing range of 40% is under a red body that covers more than half of the candle. There is a long lower wick with a tiny upper wick. More stocks declined than advanced on the Nasdaq. Notably, there were two advancing stocks for every declining stock on the New York Stock Exchange.

The Dow Jones Industrial Average (DJI) led the major indexes with a +0.76% gain. Small caps in the Russell 2000 (RUT) also did well, with the index gaining +0.59%. The S&P 500 (SPX) advanced +0.23%. The VIXVolatility Index ( VIX ) fell back -7.54%.

Energy ( XLE +2.87%) was by far the top sector of the day. Financials ( XLF +1.14%) ended the day in second place. Only three sectors declined, with Materials ( XLB -0.02%), Utilities ( XLU -0.18%), and Health ( XLV -0.62%) at the bottom of the sector list.

The OPEC Monthly Report released early in the morning provided investors with a more optimistic outlook for 2022. The report said oil demand would exceed pre-pandemic levels by next year. The sent crude oil futures higher.

The US Dollar remained about the same with just a -0.03% decline in the index ( DXY ). The US 30y and 10y Treasury yields declined for the day. The US 2y Treasury yield remained flat. Both High Yield ( HYG ) and Investment Grade ( LQD ) bond prices increased.

Aluminum finally pulled back after nearly two weeks of exceptional gains. Timber and Copper also declined.

The Put/Call ratio ( PCCE ) declined to 0.673. The CNN Fear & Greed index is still in Fear but moved back toward Neutral.

Three of the four largest mega-caps gained for the day. Amazon ( AMZN ) was the only to decline, closing back below its 50d moving average line. The top mega-cap for the day was United Health ( UNH ), followed by Exxon Mobil XOM ). The daily update growth list was mostly losers for the day. Fiverr ( FVRR ) was the top gainer with a +4.82% advance. FUTU Holding ( FUTU ) was the biggest loser, declining -8.24%.

Pfizer PFE ) and Moderna MRNA ) declined after experts said booster shots were not widely required.

Looking ahead

Inflation data will have everyone’s attention on Tuesday with the release of August’s consumer price index data.

There are no relevant earnings reports for Tuesday.

Trends, Support, and Resistance

The Nasdaq dipped below the 21d exponential moving average twice during the session. It was able to close above the key moving average line after a late afternoon rally.

The trend line from the 9/7 high, the five-day trend line , and the one-day trend line all point to approximately the same place, which would result in a -0.42% decline tomorrow.

Wrap-up

Value and re-opening stocks are back in play again as investors see the OPEC projection for oil demand as a leading indicator of economic activity. However, the optimism could end tomorrow if there are surprises with the consumer price index data.

The Nasdaq chart is in a clear downtrend, but the two mid-day rally attempts give some hope for a reversal. The expectation is for Sideways or Lower tomorrow.

Stay healthy and trade safe!

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