Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
Thursday, September 23, 2021
Facts: +1.04%, lower, Closing Range: 78%, Body: 60% Green
Good: High A/D ratio, mostly green body
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%), (-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.
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. 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 line and remain above the critical support line in the afternoon.
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.
The ( PCCE ) declined to 0.571 for the day as investors grew . 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 . 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.
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.
Trends, Support, and Resistance
The Nasdaq rose above the 15,000 and its 21d today.
The five-day shows a -0.68% decline for tomorrow, a move back below the 21d .
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 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. 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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