Taking Stock - Week of December 14, 2020

Monday, December 14, 2020

Red Arrow Down

DJI30 Index at the close   —-   29,861.55   -184.82 (-0.62%)

The Index opened at 30124, up 78 points, and immediately shot up to 20240.  Then it climbed more slowly, hitting the hi of 30326, up 279, at 10:30, giving us a new all time intra-day hi - by 6 points.  [Yippee!] But by 11:30 it had dropped to 300100, and stayed below 30130 until dropping another 40 points by 12:30.  After that, it just kept tumbling, hitting 29960 at 2:30 and the low of 29849, 12 points below the close, in the last few minutes.  

The hi and lo were higher by 255 and 28 points, respectively.  But the Index tumbled almost continuously after the first hour. Maybe this illustrates the Smart Money Index that I mentioned last week - the idea being that emotional [dumb] money enters the market at the beginning of the day, and rational [smart] money trades at the end. The spread was 477 points, the largest since 498 on 11/18.

The big gains in November were concentrated in the first half of the month. Increases since, though real, have been rather tepid, and would have been far less impressive without the late October slump.  In fact, compared to the highs on 9/03 and 10/12, the recent gains, though real, are rather incremental.

All the indexes started hi this morning and slumped the rest of the day, though the NASDAQ and Russell stayed positive.

DJI30 momentum is still sideways, though at the micro level it’s been slipping for the last 3 sessions.  And today’s closing value is the lowest since 12/01.  The question always is - what will the follow-through be?  Today might have been a turning point leading into a slump.  The action for the rest of the week will either confirm or refute.  At least I hope so.

% Changes -

DJI30  -0.62% 

SP500 -0.44%   

NASDAQ  +0.50%    

Russell 2000 +0.11%

DJI30 Closings -

12/11/18 - 24101

01/02/20 - 28869

11/13/20 - 29480

12/10/20 - 29862

NYSE Internals -

A/D = 1218/1932 = 0.63

A/D Vol = 0.26

New Hi/Lo = 221/2 = 110.50

Tuesday December 15, 2020

Green Arrow Up

DJI30 Index at the close   —-   30,199.31   +337.76 (+1.13%)

The Index opened at 29919, up 58 points, and reached the hi of 30070, up 209 in the first 6 minutes.  After a slide back to 29900 after 10:30, there was a steady climb to the hi of 30243 in the half hour centered around 2:30.  It fell back to 30150 after 3:30, then rose into the close on increasing volume.



This is an inside day, with the hi lower by 83 points, and the lo higher by 46.  I was tempted to call this a sideways day, but it’s hard to ignore a gain of over a percent.  And it missed being a new closing hi by only 19 points.  Still, at the fine detail level, momentum slipped again by a tiny amount for the 4th straight session, though the main thrust is still sideways.



There was no follow-through to yesterday’s loss, but nothing new on the upside either.  So the session was uninformative.  This market has offered no information for a month.  We’ll just have to keep biding our time.

% Changes -

DJI30  +1.13% 

SP500 +1.29%   

NASDAQ  +1.25%    

Russell 2000 +2.40%

DJI30 Closings -

12/14/18 - 24101

01/02/20 - 28869

11/13/20 - 29480

12/14/20 - 30199

NYSE Internals -

A/D = 2365/783 = 3.02

A/D Vol = 5.03

New Hi/Lo = 156/5 = 31.20

Wednesday, December 16, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   30,154.54   -44.77 (-0.15%)

The Index opened at 30191, off 8 points, and quickly dropped to 30140.  It rose to 30219, up 20, at 10:30.  From there it was a choppy decline, hitting a lo of 30106 around 2:00 to 2:30.  Then there was a rapid rebound to about 30210 at 3:00 and the day’s hi of 30236 a half hour later.  Then there was a choppy 82 point drop into the close.

 

This is the 2nd inside day in a row.  Along with the minuscule change at the close, this earns the sideways arrow.  The hi was lower by 7 points and the lo was higher by 185.  The span was 155 points, the narrowest since 124 on 10/08.  Momentum remains sideways, of course.

The DJI and Russell has similar contours today; the SP500 and the NASDAQ had a different pair of similar contours.  To that extent, the markets were fragmented.  But the changes were small, and nothing much is happening.



% Changes -

DJI30  -0.15% 

SP500 +0.18%   

NASDAQ  +.50%    

Russell 2000 -0.36%

DJI30 Closings -

12/14/18 - 24101

01/02/20 - 28869

11/16/20 - 29950

12/14/20 - 30155

NYSE Internals -

A/D = 1452/1684 = 0.86

A/D Vol = 0.79

New Hi/Lo = 188/8 = 23.50

Thursday, December 17, 2020

Green arrow Up

DJI30 Index at the close   —-   30,303.37   +148.83 (+0.49%)

The index opened at 30216, the day’s lo, up 61 points, and reached 30328, the day’s hi, up 169, in the first 10 minutes. There was a slow bumpy sag to the lo of 30216 between 12:00 and12:30, then a rise to 30290 after 1:00.  It hovered near that level until just before the close.

There was a new closing hi, but not a new intraday hi.  Today’s early morning hi missed that mark by 2 points. This was a clearly up day with the hi and lo higher by 88 and 136 points, respectively.  The span was an exceedingly narrow 108 points, the least since 84 on 1/17; in those halcyon pre-civid days when the world seemed to make some sort of sense.  Is this a sign of complacency?  

The index seems trapped in a range roughly between 29900 and 30300, a span of only 1 1/3%.  Momentum is still sideways.




% Changes -

DJI30  +0.49% 

SP500 +0.58%   

NASDAQ  +.84%    

Russell 2000 +1.30%

DJI30 Closings -

12/17/18 - 23593

01/02/20 - 28869

11/17/20 - 29783

12/14/20 - 30303

NYSE Internals -

A/D = 2090/1044 = 2.00

A/D Vol = 2.35

Friday, December 18, 2020

Red Arrow Down

DJI30 Index at the close   —-   30,179.05   -124.32 (-0.41%)

The Index opened at 30314, up 11 points, and immediately rose to 30344.  Then it dropped sharply to hit 30168, off 135 at 10:00. It continued tumbling, hitting a lo of 30052, off 252, at 11:15.  After 12:30, it climbed back up above 30200, but by 2:00 it was back with in few points of the lo.  It dribbled along between there and 30100 until about 3:00.  It then dropped to 30029 at 3:30.   Suddenly it rebounded, hitting 30270 with 4 minutes left in the session, then turned again and dropped 91 points into the close.   The net gain for the week was 133 points, or 0.44%.

The DJI, SP500 and NASDAQ all had similar contours, were in the red almost the entire day, and wound up there.  The Russell was in positive territory most of the day and only slipped negative late in the session.

This is an outside day with the hi higher by 20 points and the lo lower by 164.  The spread was 314.  The early morning hi was also a new all time intra-day hi by the impressive margin of 17.8 points.  The close missed being an all time closing hi by 20.7 points.  As the digram shows, the up-slanting wedge continues to narrow.  Even with the extended string of new highs, this a classic bearish formation, so a drop should be expected.   



No guarantees, though.  The markets are dramatically overextended and wildly over-valued.  In the short term, none of this matters, since the markets are fuel by emotion, not logic nor reason. Momentum is still sideways, so neither the bulls nor the bears are making much headway.  But reversion to the mean will happen at some uncertain future date - and it will almost certainly over-shoot, perhaps by a large margin.

Volumes were through the roof today.  DJI volume was more than double what it has been recently, and NYSE volume more than triple.  In both cases there was a huge volume surge at the end of the day.  This was a so-called triple witching day, and the last hour is the triple witching hour, when market index futures, index options and single stock options and futures all expire. This is typically a brief time of volume spikes and high volatility.


I wonder if the more deeply negative pre-3:00 lo is more representative of the actual market condition than the wild ride into the close.  Maybe next week will tell us something.  This week really didn’t.   

Make of it what you will.


% Changes -

DJI30  -0.41% 

SP500 -0.35%   

NASDAQ  -0.07%    

Russell 2000 -0.41%

DJI30 Closings -

12/18/18 - 23675

01/02/20 - 28869

11/18/20 - 29439

12/18/20 - 30179

NYSE Internals -

A/D = 1334/1809 = 0.74

A/D Vol = 0.50

New Hi/Lo = 270/4 = 67.50