Daily Market Update for 11/19

Original Chart

Notes

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

Friday, November 19, 2021

Facts: +0.40%, Volume lower, Closing Range: 42% (w/gap), Body: 15% Green
Good: New all-time high, higher low
Bad: Lower volume , fade from intraday high, low advance/decline ratio
Highs/Lows: Higher high, Higher low
Candle: Gap up, long upper wick above a thin green body,
Advance/Decline:
Indexes:SPX (-0.14%), DJI (-0.75%), RUT (-0.86%), VIX (+1.82%)
Sector List: Technology ( XLK +0.73%) and Utilities ( XLU +0.57%) at the top. Financials ( XLF -1.09%) and Energy ( XLE -3.90%) at the bottom.
Expectation: Sideways or Lower

Market Overview

Nasdaq topped 16,000 for the first time, helped higher by big tech this week. There was caution in the market as investors looked for safe havens and exiting industrials such as travel and energy stocks.

The Nasdaq ended the day with a +0.4% gain on lower volume than the previous day. The index opened with a gap up in the morning, followed by a rally that took it to a +0.80% intraday gain. The intraday high did not hold, creating a long upper wick and bringing the index back down to close nearly where it opened. The 42% closing range, including the gap, is above the level we want to see, but the candle shows indecision among investors. There were more than two declining stocks for every advancing stock.

The other major indexes closed lower for the day. The S&P 500 (SPX) declined -0.14%, while the Dow Jones Industrial Average (DJI) fell -0.75%. Small-caps performed the worst, bringing the Russell 2000 (RUT) down -0.86%. The VIXVolatility index rose +1.82%.

Only three sectors gained for the day. The top three included growth sectors Technology ( XLK +0.73%) and Consumer Discretionary ( XLY +0.43%), thanks primarily to big tech rising on positive earnings reports and lowering Treasury yields. However, Utilities ( XLU +0.57%) took the second spot in the sector list, showing investors were looking for a defensive play, potentially against rising COVID cases in Europe.

Financials ( XLF -1.09%) and Energy ( XLE -3.90%) were at the bottom of the sector list. Financials was brought down by lower Treasury Yields, while Energy closed lower on impact to travel from new pandemic lockdowns in Europe.

The US Dollar climbed sharply after Fed’s Christopher Walter commented that the government should taper earlier to tighten monetary policy . The index ( DXY ) gained +0.57% for the day, causing the drawdown in big tech stocks in the afternoon.

US 30y and 10y Treasury Yields dropped for the day, while 2y yields rose. High Yield ( HYG ) Corporate Bond prices declined while Investment Grade ( LQD ) Corporate Bond prices rose.

Gold and Silver prices pulled back on the strengthening dollar. Crude Oil Futures moved sharply lower, while Copper and Aluminum Futures are on the rise again.

The put/call ratio ( PCCE ) rose to 0.606. The CNN Fear & Greed index moved back into the Greed level from Extreme Greed the past week. The NAAIM money manager exposure index fell to 102.54 but is in its fourth week above 100.

Apple AAPL ) rose another +1.70%, outperforming the other three largest mega-caps. Microsoft MSFT ) gained +0.54%. Both Apple and Microsoft had record-high closes. Amazon ( AMZN ) declined -0.53%, while Alphabet GOOGL ) declined -0.61%.

Nvidia NVDA ) topped the mega-cap list for a second day, gaining +4.14%. Tesla TSLA ) was the second-best mega-cap for the day, advancing +3.71%. Exxon Mobil was at the bottom of the list, with a -4.62% decline today.

Enphase ( ENPH ) gained +5.21%, topping the Daily Update Growth List. The list has more losers than winners today, and Okta OKTA ) was at the bottom of the list, declining -8.97% today.

Looking ahead

The short holiday week will start with Existing Home Sales data on Monday morning.

Markets will be closed on Thursday for Thanksgiving, and markets will close at 13:00 on Friday.

Zoom Video (XM), Agilent Technologies (A), Arrowhead Pharma ARWR ), and Niu Tech ( NIU ) will report earnings on Monday.

Trends, Support, and Resistance

The Nasdaq broke through resistance at 16,000 and set a new all-time high before closing in the lower half of its intraday range.

If the trend line from the 11/10 low continues, that ends about the same point as the five-day trend line , a +0.44% gain for Monday.

The one-day trend line points to a -0.05% loss.

Wrap-up

The Nasdaq gained +1.24% this week, the sixth weekly gain in the last seven weeks. The Nasdaq looks strong as it sets new all-time highs and record closes. However, there is some underlying weakness as the advance/decline ratio remains low. The number of Nasdaq stocks above their 50d moving average and 200d moving average is moving lower as the index moves higher, a bearish divergence.

Looking at the long upper wick in an indecisive candle, the expectation for Monday is Sideways or Lower.

Stay healthy and trade safe!

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