Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
Friday, September 24, 2021
Facts: -0.03%, Volume lower, Closing Range: 84%, Body: 71% Green
Good: Close above 21d EMA , support in the ~15,000 area
Bad: Close lower, lower high
Highs/Lows: Lower high, Higher low
Candle: Inside day, mostly green body
Advance/Decline: 0.55, two declining stocks for every advancing stock
Indexes:SPX (+0.15%), DJI (+0.10%), RUT (-0.49%), VIX (-4.72%)
Sector List: Communications ( XLC +0.82%) and Energy ( XLE +0.75%) at the top. Health ( XLV -0.41%) and Real Estate ( XLRE -1.14%) at the bottom.
Expectation: Sideways or Higher
Markets rallied for a third day on an improved economic outlook, bolstered by the Fed’s Jerome Powell, who stated the economic decline and rally back to health is without modern precedent.
The Nasdaq closed slightly lower and on lower volume than the previous day. Although a lower close, the day was dominated by buyers after a dip at open. The closing range of 84% shows buyers took the day. However, there were two declining stocks for every advancing stock, indicating investors were very particular on where to place investments.
Communications ( XLC +0.82%) and Energy ( XLE +0.75%) were the top sectors for the day. Defensive sectors were at the bottom of the list again, with Health ( XLV -0.41%) and Real Estate ( XLRE -1.14%) having the worst losses.
New Home Sales exceed forecasts. The reported 740,000 sales compared to the estimates of 714,000. Jerome Powell spoke in the morning on the economy, and he highlighted how businesses are working around the challenges of the pandemic.
US Treasury Yields rose for a second day. The gap between long and short-term notes expanded. The US Dollar index gained +0.21%. High Yield ( HYG ) and Investment Grade ( LQD ) Corporate Bond prices declined to the day. Crude Oil prices continued to march higher.
The Put/Call ratio ( PCCE ) rose to 0.696. The CNN Fear & Greed Index remains in the Fear area, moving back toward Neutral. The NAAIM money manager exposure index declined to 77.7 from 87.02 the previous week.
Three of the four largest mega-caps are trading above the 21d EMA and 50d MA lines. Only Apple ( AAPL ) remains below the key moving averages. Alphabet ( GOOGL ) gained +0.71%, helping the communications sector rise to the top of the sector list.
Costco (COST) was the top mega-cap for the day, gaining +3.31% after announcing it was putting purchase limits back on some items such as toilet paper. The problem is not just over-purchasing, as seen earlier in the pandemic, but also because of shipping delays and supply chain disruptions.
The daily update growth list was dominated by decliners today. SNAP (SNAP) ended the day as the top stock in the list with a +4.71% gain, lifting higher with the rest of the communications sector. Gains quickly tapered off into losses as we moved down the ranking. UP Fintech ( TIGR ) was the worst-performing stock in the list, declining -7.34%.
Durable Goods Orders for August will be available on Monday morning. John Williams and Lael Brainard of the FOMC are to make comments later in the morning.
There are no interesting earnings reports for the Daily Update on Monday.
Trends, Support, and Resistance
The one-day trend line ends with a +0.52% gain.
Today marks one year for the Daily Market Update. It started out looking very different, but I’m proud to have written an update every single trading day for the past year, learning a ton along the way. Still learning a lot every day. Thanks to those who’ve read, liked, and commented on the updates this past year.
Despite some profit-taking ahead of the weekend, Friday was not a bad way to close a choppy week which started with a very bearish move on Monday. The pivot was undoubtedly the Fed’s statements on Wednesday that showed optimism for the economy while still not signaling an overly rushed bond tapering.
Based on today’s result, the expectation for Monday is sideways or higher.
Stay healthy and trade safe!
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