Taking Stock - Week of April 26, 2021

Monday, April 26, 2021

Yellow Arrow Sideways

DJI30 Index at the close   —-   33,981.57   -61.92 (-0.18%)

The Index opened at 34044, up a fraction of a point, and quickly rose to 34149, up 105.  It then abruptly fell to 34090, the beginning of a jagged drop to 34000 after 1:30.  It ran slightly up to 34045 at 3:20, when it again fell abruptly to 33941, just over 100 points, at 3:30. It bounced up to 34115, then staggered into the close, for a 0.18% loss.

This is an inside day, with the hi lower by 9 points and the lo higher by 228 - the latter being a positive on a day that was mostly down hill.  The span was a modest 207 points. 

All the other indexes were up. The SP500 rose slightly in the morning, then chopped sideways the rest of the day.  On Friday it set a new intra-day hi at 4194.17, but missed a new closing hi by 5 points.  Today it reached a new intra-day hi by 0.02 points, and a new closing hi at 4187.62 by 2.15 points, 0.05%.  But, a hi is a hi, I guess.

The Russell 2000 rose until noon, then coasted sideways. It is 2.63% under its 3/15 all time closing hi, and might still be forming a head and shoulders pattern.

The NASDAQ rose until 3:30, then slid a bit into its close.  On 4/16 it came within 0.31% of a new closing high.  It faltered a bit last week, but did reach a new closing hi today by [wait for it] 0.31%!  Yippee.

The market was fragmented today, with each index following its own path.  Volumes were low across the board.  Make of it what you will.

% Changes -

DJI30  -0.31% 

SP500 +0.18%   

NASDAQ  +0.87%    

Russell 2000 +1.15% 

 

DJI30 Closings -

04/26/19 - 26543

04/24/20 - 23775

03/26/21 - 33073

04/26/21 - 33982

NYSE Internals - 

A/D =  2074/1230 = 1.69

A/D Vol = 2.16

New Hi/Lo = 395/16 = 24.69

Tuesday, April 27, 2021

Taking Stock - Weekend Update

I need to pay more attention to the SP500!

Some excerpts from Avi Gilbert's post at Seeking Alpha today follow.

As we came into this past week, I had our members of The Market Pinball Wizard well prepared for the whipsaw action we experienced this past week. This next quote was from my analysis posted to our members last weekend:

[A]s I warned earlier this week, as long as the market respects the 4200SPX resistance region, then I still expect some whipsaw potential. You see, my main count has us completing wave iii of 3, with wave iv of 3 yet to be seen. Therefore, there is still some up/down action I expect in the coming week...

And, boy has it been a week of whipsaw. But the main point is that none of this comes as a surprise to those aware of the trend, and where we reside within the trend. In fact, as we were topping out on Thursday in a smaller degree structure, it was clear we were about to see a pullback, as I outlined to our members. And, at that time, the announcement was made about the Biden proposed new taxes on investments.

I have been doing this for a very long time, and I am always amazed at how news fits into the cycle. When the market is set up for a move, and a news event hits the wires, it always looks like the news event caused the move. Yet, when the market is not set up for that type of move, and a news event hits the wires, the market will often simply "yawn" and continue along its path. We have all seen this happen many times, that is, if we are paying close attention.

------------------

So, when the news of Biden's proposed tax hikes hit the market and the market reacted to the downside, all I can say is that it fits our chart expectations rather nicely. And, if you think that the substance of that news is what truly mattered, then you have to ask yourself if the news was retracted the very next day as not only did we take back the drop seen on Thursday, but we ran to new all-time highs!? Or, did investors re-consider, and then realize that the tax hike is actually bullish for the market?

I continually warn readers of my articles that if you attempt to trade or invest based upon the news, you will often find yourself behind the curve. I wonder how many of you were terribly whipsawed this past week based upon the news.

So, I will make this easy for you this coming week. Our smaller degree support is in the 4160/70SPX region. As long as that holds on Monday, I am looking for the market to rally up towards the 4240/50SPX region before we see another pullback to set us up for the next major rally to 4300+. But, if we do not hold 4160 as support early in the week, then we will likely re-test the 4095-4120SPX region before we begin the next rally to 4300+.

In other words, 4095-4120SPX is the new upper support for the market, and our targets remain 4300+ as we move into the month of May. In fact, 4095 may become our new support floor for the rest of 2021 depending upon the action seen in the coming 3 weeks.

Taking Stock - Week of April 19, 2021

Monday, April 19, 2021

Red Arrow Down

DJI30 index at the close   —-   34,077.63   -123.04 (-0.36%)

The index opened at 34182, off 18 points, and quickly dropped to 34051, off 150.  It chopped down to the low of 33981, off 220, after 12:30.  The afternoon gain was also choppy, with a 63 point rise in the last half hour.

This is a clearly down day, with the hi and lo lower by 74 and 78 points, respectively.

The span was 202 points.  This is tepid follow-up to Friday’s all time highs, and a poor start to the week - though by rather small margins.   

Hale Stewart reports — 

“All the indexes were off; this only issue was degree. Smaller caps took the brunt of the selling, but large caps also took a modest hit.  Two defensive sectors are at the top of the list*. At the bottom are communication services, tech, and consumer discretionary - three sectors that are key for the SPY and QQQ.”

* Real Estate [slightly positive] and Health Care [slightly negative] Performed best today.

It seems that the session’s extreme - either hi or low - often occurs near mid-day.  I have no idea what that means - if anything,  At this point, it’s just an observation.  Not much more to say today.

% Changes -

DJI30  -0.36% 

SP500 -0.53%   

NASDAQ  -0.98%    

Russell 2000 -1.36% 

DJI30 Closings -

04/18/19 - 26560

04/17/20 - 24242

03/19/21 - 32628

04/19/21 - 34078

NYSE Internals - 

A/D =  1099/2191 = 0.50

A/D Vol = 0.66

New Hi/Lo = 236/32 = 7.38

Tuesday, April 20, 2021

Taking Stock - Week of April 12, 2021

Monday, April 12, 2021

Yellow Arrow Sideways

DJI30 Index at the close   —-    33,745.40   -55.20 (-0.16%)

The index opened at 33775, off 26 points.  After a brief rise to 33786, off 14, it fell, hitting 33691, off 110 after 11:00.  By noon it recovered to 33770.  After 12:45 it fell again, hitting the day’s lo of 33666, off 135, after 2:00.  It stayed under 33700 until 3:30, when it was sharply rising, reaching the hi of 33786, off 14, 8 minutes before the close.

This was an inside day: minus 25 points at the hi end and plus 139 at the lo.  The span was an extraordinarily narrow 121 points, the least since 83 points on 1/17/2020 - well before last year’s crash.  If there is a positive here, it is in the day’s lo moving higher, which justifies the yellow arrow.

Last Friday there were new intra-day and closing highs.  Today was pretty uneventful. All the indexes were down a bit, and except for the SP500 which briefly went slightly positive in the early afternoon, they were all in the red all day.  DJI volume has been on the light side all month, and NYSE volume has been about 70% of normal.

It looks as if the DJI and SP500 are in third waves up from the 3/23/20 bottom, at some level of trend.  If that is right, then consolidations and brief corrections can safely be ignored, and there is still a long way to go up.  If!  The problem is the weak volume.  This does not look bullish, so the signals are mixed.

I read an article recently that graphical showed that not only is the stock market disconnected from the underlying economy, it has NEVER been connected.  I’ve repeatedly said that the market is an aspect of human emotion, and the collective behaviors of investors and speculators are, at best, semi-rational.  This is why we see extreme over and under valuations, and the occasional violent jolt.

% Changes -

DJI30  -0.16% 

SP500 -0.02%   

NASDAQ  -0.36%    

Russell 2000 -0.43% 

DJI30 Closings -

04/12/19 - 26412

04/09/20 - 23719

03/12/21 - 32779

04/12/21 - 33745

NYSE Internals - 

A/D =  1640/1644 = 1.00  <---  how rare is this?!?

A/D Vol = 0.81

New Hi/Lo = 305/17 = 17.94

Tuesday, April 13, 2021

Taking Stock - Week of April 5, 2021

Monday, April 5, 2021

Green Arrow Up

DJI30 Index at the close   —-   33,527.19   +373.98 (+1.13%)

The Index opened at 33222, up 69 points, and quickly shot up to 33475, up 322.  It continued climbing, reaching the hi of 33618, up 465 after 12:30.  It slid back, but remained above 33515, until it briefly dipped under 33500 after 3:00, then had a choppy rise into the close.

This is a clearly up day, with the hi and lo higher by the substantial margins of 451 and 237 points, respectively.  The span was 396.  This is a great start to the week, but the SP500 and NASDAQ had even more impressive gains, up by 1.44% and 1.67%

For now, animal spirits have captured the market in a big way.  The rotation into small caps and value might have reversed, as those segments were laggards today - though almost also sectors were up.

Volume was about normal for the DJI, but quite low for the SP500, NASDAQ and NYSE.  Russell volume number was not available.

I always talk about follow through, so we’ll have to see what tomorrow brings.

% Changes -

DJI30  +1.13% 

SP500 +1.44%   

NASDAQ  +1.67%    

Russell 2000 +0.49% 

DJI30 Closings -

04/05/19 - 26425

04/03/20 - 21053

03/01/21 - 31496

04/05/21 - 33527

NYSE Internals - 

A/D =  2095/1238 = 1.69

A/D Vol = 1.52

New Hi/Lo = 318/15 = 21.20

Tuesday, April 6, 2021