Daily Market Update for 3/1
Trend lines drawn from the 2/16 ATH (10d), 2/23 (5d) and today 3/1 (1d).
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Monday, March 1, 2021
Facts: +3.01%, Volume lower, Closing range: 97%, Body: 78%
Good: Strong buying throughout day, close above 21d EMA
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Thick green body with short upper/lower wicks, slightly longer lower wick
Advance/Decline: More than three advancing stocks for every declining stock
Indexes: SPX (+2.38%), DJI (+1.95%), RUT (+3.37%), VIX (-16.46%)
Sectors: Technology (XLK +3.22%) and Financials (XLF +3.13%) were top. Consumer Staples (XLP +1.01%) and Real Estate (XLRE +0.11%) were bottom.
Expectation: Higher
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Market Overview
Monday kicked off the week with an upside reversal from last week's downtrend. A small gap up was closed early in the session that was dominated by buying the rest of the day. The gains were large and broad across the market as manufacturing data released in the morning was better than expected.
The Nasdaq closed the day with a +3.01% gain. Volume was lower than Friday. The closing range of 97% represented the buying that continued into close after gains throughout the day created a 78% green body. More than three stocks gained for every declining stock.
The Russell 2000 (RUT) returned to the top of the index list with a +3.37% gain on optimism for stimulus to soon pass through congress. The S&P 500 (SPX) advanced +2.38%. The Dow Jones Industrial (DJI) gained +1.95%. Most importantly, all of the major indexes closed back above their 21d EMA, a key line for support and resistance.
The VIX volatility index dropped -16.46% after gaining over 26% last week.
All sectors gained for the day with Technology (XLK +3.22%) and Financials (XLF +3.13%) leading the list. Energy led for half the session before dropping back behind the other sectors. Consumer Staples (XLP +1.01%) and Real Estate (XLRE +0.11%) were the worst performing.
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Economic Indicators
The US Dollar (DXY) gained +0.14%.
Yields on 30y treasury bonds gained while 10y yields stayed about even. 2y treasury yields dropped for a second day after spiking last Thursday.
Prices on High Yields Corporate Bonds (HYG) rose for the day will Investment Grade (LQD) corporate bonds dropped slightly.
Silver (SILVER) and Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both declined.
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Investor Sentiment
The put/call ratio rose slightly to 0.823. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The CNN Fear & Greed index moved back to the Greed side but not yet Extreme Greed.
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Market Leaders
All of the big four mega-caps closed the day with gains. Unlike Friday's gains, today's gains look more bullish, albeit the volume is lower. Microsoft (MSFT) closed back above the 21d EMA, joining Alphabet (GOOGL) which had recovered the line on Friday. Apple (AAPL) and Amazon (AMZN) are still trading below both the 21d EMA and 50d MA.
Tesla (TSLA) was the top mega-cap of the day with a 6.26% gain. Apple, PayPal (PYPL) and Exxon Mobile (XOM) round out the top four mega-caps. Most mega-caps gained for the day.
All of the growth stocks I track for the daily update had gains for the day. Digital Turbine (APPS) was the big winner with a 14.74% gain, nearly climbing back to its all-time high. Grow Generation (GRWG), Draft Kings (DKNG) and Etsy (ETSY) were other growth stock with greater than 10% gains.
Zoom Video (ZM) is up +8.60% after hours, providing a strong earnings beat and guidance for 2021 in their earnings update. NIO (NIO) and Lemonade (LMND) both were down after hours, disappointing investors with their earnings report. NIO had a greater loss than expected, despite strong revenue. Lemonade did not provide a strong outlook.
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Looking ahead
There is not a lot of economic news scheduled for Tuesday. FOMC Members Brainard and Daly are scheduled to speak in the afternoon. API Weekly Crude Oil Stock will be released after market close.
Tuesday earnings releases will include Sea (SE), Target (TGT), Veeva Systems (VEEV), Ross Stores (ROST), and Kopin (KOPN). Check the companies in your portfolio for earnings reports so you are not surprised.
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Trends, Support and Resistance
The one-day trend line points to a +4.39% gain for Tuesday. That's still well below the 14,000 area where possibly the index would find resistance.
The five-day trend line points to a -1.06% loss. The index closed in the upper half of the five-day regression trend channel. A return to the center of the channel would put the index back in the middle of the 21d EMA and 50d MA.
The trend-line from the 2/16 ATH is pointing to a -3.42% loss that puts the index back below the 50d MA and above the 13,000 support area.
If there is further downside, the index held the 12,550 area in an early January dip. If it passes that area, the next support area is 12,250.
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Wrap-up
The downward trend and indecisive Friday made the expectation for today of Sideways or Lower, but with the hopes for an expectation breaker.
We got that expectation breaker today thanks to positive news over the weekend on the stimulus as well as signs that treasury bond yields had topped and would come back down. The US Dollar also strengthened considerably against other currencies, thanks to a positive outlook on the US economy and controlled inflation.
Expectation for tomorrow is a continuation and move higher. If that doesn't happen, then we'll take another look for indications on why not. Another positive gain, but with more volume would be a confidence booster.
Stay healthy and trade safe!
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Monday, March 1, 2021
Facts: +3.01%, Volume lower, Closing range: 97%, Body: 78%
Good: Strong buying throughout day, close above 21d EMA
Bad: Nothing
Highs/Lows: Higher high, higher low
Candle: Thick green body with short upper/lower wicks, slightly longer lower wick
Advance/Decline: More than three advancing stocks for every declining stock
Indexes: SPX (+2.38%), DJI (+1.95%), RUT (+3.37%), VIX (-16.46%)
Sectors: Technology (XLK +3.22%) and Financials (XLF +3.13%) were top. Consumer Staples (XLP +1.01%) and Real Estate (XLRE +0.11%) were bottom.
Expectation: Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Monday kicked off the week with an upside reversal from last week's downtrend. A small gap up was closed early in the session that was dominated by buying the rest of the day. The gains were large and broad across the market as manufacturing data released in the morning was better than expected.
The Nasdaq closed the day with a +3.01% gain. Volume was lower than Friday. The closing range of 97% represented the buying that continued into close after gains throughout the day created a 78% green body. More than three stocks gained for every declining stock.
The Russell 2000 (RUT) returned to the top of the index list with a +3.37% gain on optimism for stimulus to soon pass through congress. The S&P 500 (SPX) advanced +2.38%. The Dow Jones Industrial (DJI) gained +1.95%. Most importantly, all of the major indexes closed back above their 21d EMA, a key line for support and resistance.
The VIX volatility index dropped -16.46% after gaining over 26% last week.
All sectors gained for the day with Technology (XLK +3.22%) and Financials (XLF +3.13%) leading the list. Energy led for half the session before dropping back behind the other sectors. Consumer Staples (XLP +1.01%) and Real Estate (XLRE +0.11%) were the worst performing.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
The US Dollar (DXY) gained +0.14%.
Yields on 30y treasury bonds gained while 10y yields stayed about even. 2y treasury yields dropped for a second day after spiking last Thursday.
Prices on High Yields Corporate Bonds (HYG) rose for the day will Investment Grade (LQD) corporate bonds dropped slightly.
Silver (SILVER) and Gold (GOLD) declined. Crude Oil (CRUDEOIL1!) declined. Timber (WOOD) advanced. Copper (COPPER1!) and Aluminum (ALI1!) both declined.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio rose slightly to 0.823. The put/call ratio (PCCE) is a contrarian indicator that shows overly bullish or overly bearish investor behavior. The 0.7 level is considered normal. As it approaches 0.60 (overly bullish) and below, watch for a possible pullback in the market.
The CNN Fear & Greed index moved back to the Greed side but not yet Extreme Greed.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
All of the big four mega-caps closed the day with gains. Unlike Friday's gains, today's gains look more bullish, albeit the volume is lower. Microsoft (MSFT) closed back above the 21d EMA, joining Alphabet (GOOGL) which had recovered the line on Friday. Apple (AAPL) and Amazon (AMZN) are still trading below both the 21d EMA and 50d MA.
Tesla (TSLA) was the top mega-cap of the day with a 6.26% gain. Apple, PayPal (PYPL) and Exxon Mobile (XOM) round out the top four mega-caps. Most mega-caps gained for the day.
All of the growth stocks I track for the daily update had gains for the day. Digital Turbine (APPS) was the big winner with a 14.74% gain, nearly climbing back to its all-time high. Grow Generation (GRWG), Draft Kings (DKNG) and Etsy (ETSY) were other growth stock with greater than 10% gains.
Zoom Video (ZM) is up +8.60% after hours, providing a strong earnings beat and guidance for 2021 in their earnings update. NIO (NIO) and Lemonade (LMND) both were down after hours, disappointing investors with their earnings report. NIO had a greater loss than expected, despite strong revenue. Lemonade did not provide a strong outlook.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
There is not a lot of economic news scheduled for Tuesday. FOMC Members Brainard and Daly are scheduled to speak in the afternoon. API Weekly Crude Oil Stock will be released after market close.
Tuesday earnings releases will include Sea (SE), Target (TGT), Veeva Systems (VEEV), Ross Stores (ROST), and Kopin (KOPN). Check the companies in your portfolio for earnings reports so you are not surprised.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support and Resistance
The one-day trend line points to a +4.39% gain for Tuesday. That's still well below the 14,000 area where possibly the index would find resistance.
The five-day trend line points to a -1.06% loss. The index closed in the upper half of the five-day regression trend channel. A return to the center of the channel would put the index back in the middle of the 21d EMA and 50d MA.
The trend-line from the 2/16 ATH is pointing to a -3.42% loss that puts the index back below the 50d MA and above the 13,000 support area.
If there is further downside, the index held the 12,550 area in an early January dip. If it passes that area, the next support area is 12,250.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
The downward trend and indecisive Friday made the expectation for today of Sideways or Lower, but with the hopes for an expectation breaker.
We got that expectation breaker today thanks to positive news over the weekend on the stimulus as well as signs that treasury bond yields had topped and would come back down. The US Dollar also strengthened considerably against other currencies, thanks to a positive outlook on the US economy and controlled inflation.
Expectation for tomorrow is a continuation and move higher. If that doesn't happen, then we'll take another look for indications on why not. Another positive gain, but with more volume would be a confidence booster.
Stay healthy and trade safe!
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