Daily Market Update for 7/26
Summary: Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week.
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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Monday, July 26, 2021
Facts: +0.03%, Volume higher, Closing range: 69%, Body: 27%
Good: Slight gain on higher volume, healthy pause
Bad: A/D low but not surprising with sideways move
Highs/Lows: Higher high, higher low
Candle: Thin green body in the middle of a short candle
Advanced/Decline: 0.57, almost two declining stocks for every advancing stock
Indexes: SPX (+0.24%), DJI (+0.24%), RUT (+0.33%), VIX (+2.33%)
Sectors: Energy (XLE +2.47%) and Materials (XLB +0.84%) at the top. Industrials (XLI -0.05%) and Health (XLV -0.65%) were bottom.
Expectation: Sideways or Higher
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Market Overview
Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week.
The Nasdaq closed the day with a small +0.03% gain. It traded up and down throughout the day but stayed within a tight range. Volume was higher for the day. A thin green body sits in the middle of the short candle, with equal upper and lower wicks. The closing range was 69%. There were almost two declining stocks for every advancing stock.
The Russell 2000 (RUT) gained +0.33%. The small-cap index was up 1% in the morning before being rejected at its 21d exponential moving average. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) both rose +0.24%.
The VIX volatility index advanced +2.33%.
Energy (XLE +2.47%) and Materials (XLB +0.84%) led the sector list today. The Materials sector, along with metal commodities, are being boosted by higher demand in manufacturing. Industrials (XLI -0.05%) and Health (XLV -0.65%) were at the bottom.
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Economic Indicators
New Home Sales for June were lower than expected. That may be a welcome relief for investors worried about the overheated sector and the risk exposure it brings to the economy.
The US Dollar (DXY) declined -0.30%.
The US 30y and 10y Treasury yields advanced while the 2y Treasury Yield declined.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) advanced while Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined slightly.
Timber (Wood) advanced.
Copper (COPPER1!) continued its advance after a massive move up on Friday.
Aluminum (ALI1!) also advanced.
Bitcoin (BTCUSD) ended the day with a +6.14% advance but was up 15% intra-day after Amazon posted a crypto-related job opening.
Ethereum (ETHUSD) advanced +2.51% for the day.
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Investor Sentiment
The put/call ratio declined to 0.640. 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. Below that level is overly bullish.
The CNN Fear & Greed index is in the Fear area.
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Market Leaders
Amazon (AMZN) gained +1.18% for the day, leading the largest four mega-caps. Alphabet (GOOGL) advanced +0.77%. Apple (AAPL) rose +0.29%. Microsoft (MSFT) was the only of the four with a loss, declining -0.21%.
Exxon Mobil (XOM) lead the mega-caps today, with Intel (INTC), Tesla (TSLA), and Walt Disney (DIS) filling out the top four. At the bottom of the list was Alibaba (BABA), with a -7.15% loss as Chinese stocks continue to get beaten down. Novo Nordisk (NVO), Nvidia (NVDA), and Abbot Labs (ABT) were also at the bottom of the list.
At the top of the daily update growth list were Zoom (ZM), Penn National Gaming (PENN), Lemonade (LMND), and Tesla (TSLA). At the bottom of the list were Chinese stocks JD.com (JD), FUTU Holdings (FUTU), Alibaba (BABA), and Twitter (TWTR).
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Looking ahead
Durable Goods Orders data made available before the market opens on Tuesday indicates the level of economic activity. Analysts expect June to be higher than May after the May number came in lower than expected.
CB Consumer Confidence for July will also be available in the morning after the market opens. An update to API Weekly Crude Oil Stock arrives after the market closes.
Three of the largest companies in the world report earnings on Tuesday. Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL) are all expected to report strong year-over-year growth, but investors will be looking to guidance for future quarters. Visa (V), United Parcel Service (UPS), Starbucks (SBUX), Raytheon (RTX), 3m (MMM), AMD (AMD), General Electric (GE), Southern Copper (SCCO), Enphase (ENPH), Teladoc (TDOC), and Logitech (LOGI) are some of the other interesting companies also reporting on Tuesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
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Trends, Support, and Resistance
The Nasdaq moved sideways today, setting a new all-time high and record close.
The five-day trend line points to a +1.45% gain for tomorrow. The trend-line from the 7/19 low ends with a +1.09% gain.
The one-day trend line is nearly flat and points to a -0.03% decline.
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Wrap-up
It was a wild ride for small-caps in the morning. Investors bought up small-caps in the early morning, given the supportive economic conditions for the segment. But after the market opened, the US dollar dropped sharply, and that may have spooked investors. As the dollar stabilized and regained some of the initial loss, so did small-caps and the Russell 2000 ended the day outperforming the other indices.
The news will be dominated by earnings reports and the Fed meeting this week. Three of the largest companies report tomorrow. The Fed will meet and release a statement on monetary policy on Wednesday.
The expectation is for sideways or higher tomorrow.
Stay healthy and trade safe!
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Monday, July 26, 2021
Facts: +0.03%, Volume higher, Closing range: 69%, Body: 27%
Good: Slight gain on higher volume, healthy pause
Bad: A/D low but not surprising with sideways move
Highs/Lows: Higher high, higher low
Candle: Thin green body in the middle of a short candle
Advanced/Decline: 0.57, almost two declining stocks for every advancing stock
Indexes: SPX (+0.24%), DJI (+0.24%), RUT (+0.33%), VIX (+2.33%)
Sectors: Energy (XLE +2.47%) and Materials (XLB +0.84%) at the top. Industrials (XLI -0.05%) and Health (XLV -0.65%) were bottom.
Expectation: Sideways or Higher
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Overview
Small caps had a volatile start to the week, gaining on Monday morning and losing those gains by mid-day. Still, the gains were enough for all the major indices to advance today as investors look forward to a massive earnings week.
The Nasdaq closed the day with a small +0.03% gain. It traded up and down throughout the day but stayed within a tight range. Volume was higher for the day. A thin green body sits in the middle of the short candle, with equal upper and lower wicks. The closing range was 69%. There were almost two declining stocks for every advancing stock.
The Russell 2000 (RUT) gained +0.33%. The small-cap index was up 1% in the morning before being rejected at its 21d exponential moving average. The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) both rose +0.24%.
The VIX volatility index advanced +2.33%.
Energy (XLE +2.47%) and Materials (XLB +0.84%) led the sector list today. The Materials sector, along with metal commodities, are being boosted by higher demand in manufacturing. Industrials (XLI -0.05%) and Health (XLV -0.65%) were at the bottom.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Economic Indicators
New Home Sales for June were lower than expected. That may be a welcome relief for investors worried about the overheated sector and the risk exposure it brings to the economy.
The US Dollar (DXY) declined -0.30%.
The US 30y and 10y Treasury yields advanced while the 2y Treasury Yield declined.
High Yield Corporate Bond (HYG) and Investment Grade Corporate Bond (LQD) prices declined.
Silver (SILVER) advanced while Gold (GOLD) declined.
Crude Oil (CRUDEOIL1!) prices declined slightly.
Timber (Wood) advanced.
Copper (COPPER1!) continued its advance after a massive move up on Friday.
Aluminum (ALI1!) also advanced.
Bitcoin (BTCUSD) ended the day with a +6.14% advance but was up 15% intra-day after Amazon posted a crypto-related job opening.
Ethereum (ETHUSD) advanced +2.51% for the day.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Investor Sentiment
The put/call ratio declined to 0.640. 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. Below that level is overly bullish.
The CNN Fear & Greed index is in the Fear area.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Market Leaders
Amazon (AMZN) gained +1.18% for the day, leading the largest four mega-caps. Alphabet (GOOGL) advanced +0.77%. Apple (AAPL) rose +0.29%. Microsoft (MSFT) was the only of the four with a loss, declining -0.21%.
Exxon Mobil (XOM) lead the mega-caps today, with Intel (INTC), Tesla (TSLA), and Walt Disney (DIS) filling out the top four. At the bottom of the list was Alibaba (BABA), with a -7.15% loss as Chinese stocks continue to get beaten down. Novo Nordisk (NVO), Nvidia (NVDA), and Abbot Labs (ABT) were also at the bottom of the list.
At the top of the daily update growth list were Zoom (ZM), Penn National Gaming (PENN), Lemonade (LMND), and Tesla (TSLA). At the bottom of the list were Chinese stocks JD.com (JD), FUTU Holdings (FUTU), Alibaba (BABA), and Twitter (TWTR).
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Looking ahead
Durable Goods Orders data made available before the market opens on Tuesday indicates the level of economic activity. Analysts expect June to be higher than May after the May number came in lower than expected.
CB Consumer Confidence for July will also be available in the morning after the market opens. An update to API Weekly Crude Oil Stock arrives after the market closes.
Three of the largest companies in the world report earnings on Tuesday. Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL) are all expected to report strong year-over-year growth, but investors will be looking to guidance for future quarters. Visa (V), United Parcel Service (UPS), Starbucks (SBUX), Raytheon (RTX), 3m (MMM), AMD (AMD), General Electric (GE), Southern Copper (SCCO), Enphase (ENPH), Teladoc (TDOC), and Logitech (LOGI) are some of the other interesting companies also reporting on Tuesday.
There are many earnings reports this week. Keep an eye out for reports from companies in your portfolio.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Trends, Support, and Resistance
The Nasdaq moved sideways today, setting a new all-time high and record close.
The five-day trend line points to a +1.45% gain for tomorrow. The trend-line from the 7/19 low ends with a +1.09% gain.
The one-day trend line is nearly flat and points to a -0.03% decline.
-=x=-=x=-=x=-=x=-=x=-=x=-=x=-
Wrap-up
It was a wild ride for small-caps in the morning. Investors bought up small-caps in the early morning, given the supportive economic conditions for the segment. But after the market opened, the US dollar dropped sharply, and that may have spooked investors. As the dollar stabilized and regained some of the initial loss, so did small-caps and the Russell 2000 ended the day outperforming the other indices.
The news will be dominated by earnings reports and the Fed meeting this week. Three of the largest companies report tomorrow. The Fed will meet and release a statement on monetary policy on Wednesday.
The expectation is for sideways or higher tomorrow.
Stay healthy and trade safe!
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