Market

Daily Market Update for 9/23 for NASDAQ:IXIC by drewby4321

Summary: The Fed’s reassurances on the economic outlook from Wednesday turned investors optimistic and sent indexes higher. Energy and Financials topped the sector list for a second day, two sectors that often lead the market out of a slump.

Notes

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

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Thursday, September 23, 2021

Facts: +1.04%, Volume lower, Closing Range: 78%, Body: 60% Green
Good: High A/D ratio, mostly green body
Bad: Nothing
Highs/Lows: Higher high, Higher low
Candle: Mostly green body with small upper and lower wicks
Advance/Decline: 2. 05 , two advancing stocks for every declining stock
Indexes: SPX (+1.21%), DJI (+1.48%), RUT (+1.82%), VIX (-10.73%)
Sector List: Energy ( XLE +3.50%) and Financials ( XLF +2.45%) at the top. Real Estate ( XLRE -0.49%) and Utilities ( XLU -0.53%) at the bottom.
Expectation: Higher

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Market Overview

The Fed’s reassurances on the economic outlook from Wednesday turned investors optimistic and sent indexes higher. Energy and Financials topped the sector list for a second day, two sectors that often lead the market out of a slump.

The Nasdaq ended the day with a +1.04% gain. Volume was lower than the previous day. The 78% closing range is above a 60% green body surrounded by short upper and lower wicks. The upper wick formed as the index faded from the intraday high in the afternoon. The morning rally was enough to get the Nasdaq back above its 21d EMA line and remain above the critical support line in the afternoon.

Small-caps led the day with a gain of +1.82% for the Russell 2000 (RUT). The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) gained +1.21% and +1.48%, respectively. The VIX Volatility Index tumbled -10.73%.

Energy ( XLE +3.50%) and Financials ( XLF +2.45%) were at the top of the sector list for a second day. Defensive sectors went to the bottom of the list, with Real Estate ( XLRE -0.49%) and Utilities ( XLU -0.53%) being the only two declining sectors today. Cyclicals dominated the top of the list as we move out of the slump, and investors see more growth in the near term.

Initial Jobless Claims were higher than expected, but not enough to raise concern. The Manufacturing and Services PMI were just below targets but not too far off to cause an issue. Overall, things look optimistic for the economy, supporting the Fed’s outlook on the recovery.

US 30y, 10y, and 2y Treasuries all rose sharply for the day. The US Dollar index declined -0.38%. High Yield ( HYG ) Corporate Bond prices rose for the day while Investment Grade ( LQD ) Corporate Bond prices fell.

Crude Oil prices were higher on Thursday. Timber continues to climb. Aluminum Futures is making new record highs. Copper declined slightly after a sharp advance yesterday.

The put/call ratio ( PCCE ) declined to 0.571 for the day as investors grew bullish . The CNN Fear & Greed index moved back into the Fear area after dipping into Extreme Fear earlier in the week. The NAAIM money manager exposure index declined to 77.7 from 87.02 the previous week.

All four largest mega-caps advanced for the day. Microsoft ( MSFT ) and Alphabet ( GOOGL ) climbed back above their 21d EMA . Apple ( AAPL ) and Amazon ( AMZN ) are approaching their key moving average lines but still closed below them today.

Salesforce.com ( CRM ) updated guidance in the morning, which sent the stock to the top of the mega-cap list with a +7.21% gain. Big Banks and Big Oil dominated the other top mega-cap spots. Only four mega-caps declined, with Alibaba (BABA) having the worst performance of the day, declining -0.46%.

The daily update growth list had a great day, but not all stocks enjoyed the rally. At the top of the list were Palantir ( PLTR ) and Digital Turbine (APPS), with gains of over 4.5%. The worst-performing stock in the list was RobinHood (HOOD) which declined -2.01% after soaring more than 10% yesterday.

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Looking ahead

New Home Sales data becomes available after the market opens on Friday morning.

The Fed’s Jerome Powell is scheduled to speak at 10a on Friday morning.

Friday’s earning reports include Carnival Corp ( CCL ).

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Trends, Support, and Resistance

The Nasdaq rose above the 15,000 support area and its 21d EMA today.

The trend line from the 9/20 low points to another +1.13% gain for tomorrow.

The one-day trend line ends with a +0.58% gain.

The five-day trend line shows a -0.68% decline for tomorrow, a move back below the 21d EMA .

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Wrap-up

New optimism helped close the gap from Monday’s open, and we are just barely in the positive for the week. One more day of gains could turn what felt like a bearish week earlier into quite a constructive week to build on in the rest of September.

We have Energy and Financials leading us out of a slump. We have good breadth across the market, with small-caps outperforming. Volume remains elevated as we move higher, with higher highs and higher lows the last three days. All that momentum sets an expectation for Higher tomorrow. Knock on wood.

Stay healthy and trade safe!

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