Taking Stock - Week of August 16, 2021

Monday, August 16, 2021

Green Arrow Up

DJI30 Index at the close --- 35,625.40 +110.02 (+0.31%)

SP500 Index --- 4,479.71 +11.71 (+0.26%)

The DJI opened at 35461, off 25 points, and 20 minutes later hit the lo of 35232, off 283. It climbed pretty steadily from there, reaching positive territory a little after 2:00 and ending with a 110 point gain.

This is an outside day by the highly unbalanced margins of 21 points at the top and 243 at the bottom. The span was 399. This morning I didn't expect new highs to occur today. But they did, by 21 points intra-day and 110 at the close.

The SP500 had a similar contour, an outside day, and new intra-day and closing highs, by about 12 points either way.

The NASDAQ also had a similar contour, but couldn't reach positive territory. It had a clearly down day by 56 and 187 points.

The Russell 2000 Also had a minimum in the morning and rose to an intermediate hi near noon, then ran mostly sideways with a slight downward bias. It had a clearly down day by about 20 points at both ends, and the close.

This is a confusing day, and a strange start to the week.

% Changes -
DJI30 +0.31%
SP500 +0.26%
NASDAQ -0.20%
Russell -0.69%

DJI Closings -
8/16/19 - 25886
8/14/20 - 27931
7/16/21 - 34688
8/16/21 - 35625

NYSE Internals -
A/D = 1171/2131 = 0.55
A/D Vol = 0.39
New Hi/Lo = 147/80 = 1.84

Tuesday, August 17, 2021

Red Arrow Down

DJI30 Index at the close   ---   35,343.28   -282.12 (-0.79%)

SP500 Index   ---   4,448.08   -31.63 (-0.71%)

The DJI opened at 35500, off 125 points, and by 10:00 fell to 35260, off 365.  After a brief bounce it resumed falling, hitting a lo of 35120, off 505, before 2:00.  This might be a support level.  It bounced off that level again about an hour later then started a choppy climb into the close.  The gain in the last few minutes was on a slight volume surge.

The SP500 had a similar contour and result, also with a volume spike on a small rise at the end.  There could be support near today's lo at 4418

The NASDAQ's performance was roughly similar, but with a larger percentage loss.  It is now 1.6% under its 8/05 hi.

The Russell 2000 started off a couple points, lurched down to a minimum at 1:00, then chopped up to its close, for the day's largest loss.  At its lo, it touched into its likely support range.  At its close it is off the 3/15 hi by 7.75%

Each Index had a clearly down day, and each touched a potential support zone.

Elliot waver Avi Gilbert has been calling for a 200 to 300 point pull back in the SP500, followed by a rise to at least 4600 later in the year.  From yesterday's hi, that drop would land between 4180 and 4280 – almost identical to the support range outlined in red on today's chart. The middle of this range would be a correction of 5.6%.

A comparable loss would be about 1600 to 2500 points in the DJI.  The bottom of that range is slightly below the support line on yesterday's DJI chart.  

As noted, the Russell has been struggling for months, and is already off by almost 8%

NYSE internals were very weak, with new lows outnumbering new highs for the first time since 7/19.

% Changes -

DJI30 -0.79%

SP500 -0.71%

NASDAQ -0.93%

Russell -1.19%

DJI Closings -

8/16/19 - 25886

8/17/20 - 27845

7/16/21 - 34688

8/17/21 - 35158

NYSE Internals -

A/D = 899/2343 = 0.38

A/D Vol = 0.34

New Hi/Lo = 87/100 = 0.87

Wednesday, August 18, 2021

Red Arrow Down

DJI30 Index at the close   ---   34,960.69   -382.59 (-1.08%)

SP500 Index   ---   4,400.27   -47.81 (-1.07%)

The DJI opened at 35310, off 33 points, and quickly dropped to 35190, off 153.  Shortly after 10:00 it rebounded to 35352, up 9.  It slipped back to 35250 after 12:30, rose to 35335 after 2:00, then fell hard into the close.  What I could see in front of the pay wall at Barrons said this:

“Minutes from the Federal Reserve’s latest meeting suggest tapering of monthly asset purchases may start this year as most participants said the Fed has hit its objective on the inflation prong of its dual mandate.

The news sent stocks lower in afternoon trading, with the S&P 500 and Nasdaq 100 paring early gains to fall 0.3% and0.1%, respectively.”

They fell further after this late afternoon report.  All the indexes fell in unison, so this is likely a cause and effect situation.  But, it also likely that the news was merely a catalyst that gave the markets the excuse they were looking for to do what was about to happen anyway.  Yesterday I mentioned the expected correction.  This could well be the start of it.

This is a clearly down day by 131 points at the top and 112 at the bottom.  The spread was 413 points, the largest since 640 on 7/20.

The SP500 mirrored the DJI.  It was clearly down by 8 points at the top, and 34 at the bottom.  

The NASDAQ ran flat and close to neutral for most of the day, then followed the other indexes down after 2:00.   It was clearly down by 20 and 35 points. 

The Russell 2000 started negative, but quickly went green and stayed there until the post 2:00 collapse.  It had an inside day with the hi lower by 9 points and lo higher by 5.  It is hovering just above its support zone.

The losses were a bit above or below 1%.  This is not an unusual occurrence.  But after the earlier action this week it is concerning.

% Changes -

DJI30 -1.08%

SP500 -1.07%

NASDAQ -0.89%

Russell -0.84%

DJI Closings -

8/16/19 - 25886

8/17/20 - 27845

7/16/21 - 34688

8/17/21 - 35158

NYSE Internals -

A/D = 899/2343 = 0.38

A/D Vol = 0.34

New Hi/Lo = 87/100 = 0.87

Thursday, August 19, 2021

Red Arrow Down

DJI30 index at the close   ---   34,894.12   -66.57 (-0.19%)

SP500 Index   ---   4,405.80   +5.53 (+0.13%)

The DJI opened at 34875, off 86 points.  Per the chart at Yahoo finance, it fell to a lo of 34690, off 270.  It made a couple  zig-zags into the close, including a slight rise in the waning moments on a volume surge.  This is a clearly down day by the margins of 359 points at the top and 253 at the bottom.  The span was 308.  The low reached below the 55 day EMA for the first time since 7/19.  The daily chart posted at Yahoo finance is not consistent with the lo posted in the day's data.  So I'm not sure which of today's 3 dips was to the lo.   If it was the first of the three, then that value, 34690, might now be a higher support level.  If that is the case, there should be a recovery tomorrow.

The SP500 had a roughly similar contour, but at a higher level, and it finished with a slight positive.  At its low, it stayed above the 55 day EMA.  A test of that line might be meaningful

The NASDAQ followed the SP500, and also wound up with a slight positive.  At its lo, it slightly pierced its trend line from the 3/23/20 lo.

The Russell 2000 started negative and bounced lower all day, losing more than a percent.  It landed in the support band that has been in play since the beginning of the year.

NYSE internals were very weak.

% Changes -

DJI30 -.19%

SP500 +0.13%

NASDAQ +0.11%

Russell -1.22%

DJI Closings -

8/19/19 - 26136

8/19/20 - 27740

7/19/21 - 33962

8/19/21 - 34894

NYSE Internals -

A/D = 968/2350 = 0.41

A/D Vol = 0.26

New Hi/Lo = 47/118 = 0.40

Friday, August 20, 2021

Green Arrow Up

DJI30 Index at the close   ---   35,120.08   +225.96 (+0.65%)

SP500 Index   ---   4,441.67   +35.87 (+0.81%)

The DJI opened at 34918, up 24 points.  After a quick drop to 34867 it started climbing and reached 35100, up 206, after 10:30.  It pulled back about 40 points a few minutes later, then turned higher again, reaching the hi of 35177 before 1:00.  It pulled back to 35050 before 3:00, then rose 70 points into the close.

This is a clearly up day by 199 and 177 points.  The spread was 310.

The SP500 opened up 5 points and followed a similar contour to the DJI.  It had a clearly up day by 26 points at the top and 37 at the bottom.

The NASDAQ was also clearly up, by 111 and 148 points.

The Russell 2000 is frequently the most volatile index, based on daily percent changes.  It was also clearly up by 111 and 148 points.  At the close it inched up above the top of its presumed support zone.

This is a positive end to an otherwise dismal week.  Is it the resumption of an uptrend, or just a counter-current move in a new downward trend, post all time highs?  Stay tuned for next week's exciting episodes of Where Do We Go From Here?

% Changes -

DJI30 +0.65%

SP500 +0.81%

NASDAQ +1.10%

Russell +1.65%

DJI Closings -

8/19/19 - 26136

8/19/20 - 27740

7/19/21 - 33962

8/19/21 - 34894

NYSE Internals -

A/D = 968/2350 = 0.41

A/D Vol = 0.26

New Hi/Lo = 47/118 = 0.40