Taking Stock - Week of October 11, 2021

Monday, October 11, 2021

Red Arrow Down

SP500 at the close --- 4,361.19 -30.15 (-0.69%)

DJI30 --- 34,496.06 -250.19 (-0.72%)

NASDAQ --- 14,486.20 -93.34 (-0.64%)

Russell 2000 --- 2,220.64 -12.45 (-0.56%)

The SP500 opened at 4385, off 6 points. It dropped another point, quivered for a few minutes, then rose, reaching 4416, up 25, before 10:00. After a 10 point drop it hit near that level again before falling rather sharply to a lo of 4370 before 2:00. From there it ran mostly sideways until 3:30, when it was in the midst of another slump into a new late day lo, less than a point below the close. This is an outside day, with the hi higher by 4 points, and the lo lower by 26. The span was 55, surrounding the 55 day EMA.

Over the weekend Elliott wave analyst Avi Gilbert pointed out 4380 [top red line on the chart] as a critical level to watch.  He suggests that a sustained break of that level could indicate that the correction is not done, and could go on further for days or even weeks -- with a chance of reaching as deep as 4050 to 4100. Today's lo is 20 points [0.44%] under 4380. This, on its own, does not constitute a meaningful break.  I'll be watching this level as we go forward, assuming that Avi is on to something. The rest of this week could be important.

The DJI followed a similar path, finishing 10 points above its late day lo. It also had an outside day, by 109 points at the top and 175 at the bottom. Its span was 465, and contained the 55 day EMA.

The NASDAQ also followed a similar path. It had a clearly down day by 34 and 87 points. It remains under its 55 day EMA.

The Russell 2000 followed a roughly similar path, but stayed closer to neutral for most of the afternoon before falling at the end. It had a clearly down day by 5 and 12 points. The 55 day EMA contained in the day's span. It fell a little less than the other indexes.

Things were looking good in the morning, but pretty dismal at the end. It this a dumb money – smart money dynamic?

SP500 Closings -
10/04/19 - 2971
10/09/20 - 3477
09/10/21 - 4459
10/11/21 - 4362

NYSE Internals –
A/D = 1417/1826 = 0.78
A/D Vol = 0.65

New Hi/Lo = 153/54 = 2.83

Tuesday, October 12, 2021

Yellow Arrow Sideways 

SP500 at the close  ---  4,350.65   -10.54 (-0.24%)

DJI30    ---  34,378.34   -117.72 (-0.34%)

NASDAQ   ---   14,465.93   -20.28 (-0.14%)

Russell 2000   ---   2,234.27+13.63 (+0.61%)

The SP500 opened at 4368, up 7 points, and quickly rose to 4375, up 14.  But at 10:15 it abruptly dropped to 4350, 0ff 11. It then gyrated with a slight upward bias until before noon, when it shot up to 4371, up 10.  It fell near 4350 again before 1:30, bobbed up briefly into positive territory again an hour later, then slumped to the day's ultimate lo of 4342 just a few minutes before the 8-points-higher close.  This is a clearly down day by 41 points at the top and 19 at the bottom.

The lo is 0.87% below the critical level of 4380. This is not yet a sustained break of that level, but it is a cautionary note going forward.  Until I see something positive, I'm concluding that the decline is continuing.

The DJI followed a nearly identical path, and finished with a slightly larger loss.  It had a clearly down day by 340 points at the top and 168 at the bottom.  The spread was 292, all under the 55 day EMA.

The NASDAQ also followed a similar path, and finished with the day's smallest loss.  It had a clearly down day by 113 and 41 points, and the entire range was under its 55 day EMA..  

The Russell 2000 followed its own path, and was in the green all day, with a slight upward bias.  It had a inside day by 10 points at the top and less than 1 at the bottom.  The 13 [blue] and 55 [orange] day EMAs are running together and were within today's span.  For at least a couple months the trading range has been in a narrowing wedge – for whatever that might be worth.

I gave this session a yellow arrow because the losses were small and the Russell gained at the close.  But that is being generous, I'm afraid.  The NYSE internals were slightly positive today.  That's about it.

SP500 Closings -

10/11/19 - 2970

10/12/20 - 3534

09/10/21 - 4459

10/12/21 - 4351

NYSE Internals – 

A/D = 1987/1302 = 1.53

A/D Vol = 1.15

New Hi/Lo = 86/60 = 1.43

Wednesday, October 13, 2021

Greenish Arrow Upish, sorta.

SP500 at the close  ---  4,363.80  +13.15 (+0.30%)

DJI30    ---  34,377.81   -0.53 (-0.00%)

NASDAQ   ---   14,571.63   +105.71 (+0.73%)

Russell 2000   ---   2,241.97   +7.70 (+0.34%)

The SP500 opened at 4358, up 7 points, and fell to its lo of 4330 at 10:15.  From there, it climbed pretty steadily to its hi of 4373 at 2:00.  It then went mostly sideways, including a slight rise at the end for a small gain, on increasing volume.  This was a mixed day, with the 13 point gain in contrast to losses of 2 points at the hi end, and 12 at the bottom.  The entire day was under the critical value of 4380 – but not by a lot.  But, this is the 5th straight day with a lower lo.  The entire session was under the 55 day EMA.

The DJI followed a similar path, with a lower pitch, ending the session a half point down.  It had a clearly down day by 161 points at the top and 208 at the bottom.   The entire 335 point range was under the 55 day EMS.

The NASDAQ also had an early morning lo, but was in the green the entire time, ending with a 106 point gain.  It had a clearly up day by 37 points at the top and 30 at the bottom.  But the entire session was under the 55 day EMA. 

The Russell 2000 went negative in the morning, then vacillated near neutral most of the rest of the day, before a rise at the end to finish at the sessions hi.  It had an out side day by a fraction at the top and a little over 1 at the bottom.  The 13 and 55 day EMAs ran together through its 21 point span.

I reluctantly gave this session a green arrow, but it is pretty tepid. The small increases are not enough to make a meaningful move against the current downward trend.  So I'm concluding that it is still in operation.

SP500 Closings -

10/11/19 - 2970

10/13/20 - 3512

09/13/21 - 4469

10/13/21 - 4364

NYSE Internals – 

A/D = 2023/1239 = 1.63

A/D Vol = 1.39

New Hi/Lo = 71/35 = 2.03

Thursday, October 14, 2021

Green Arrow Up

SP500 at the close  ---  4,438.25   +74.45 (+1.71%)

DJI30    ---  34,912.56   +534.75 (+1.56%)

NASDAQ   ---   14,823.43   +251.79 (+1.73%)

Russell 2000   ---   2,274.18   +32.21 (+1.44%)

The SP500 opened at 4387, up 23 points, and the day's lo.  It immediately jumped to 4405, up 41, then climbed more slowly, reaching 4435, up 71 before 12:30.  After that it stayed above 4430, including a surge to 4440 a few minutes before the close, about a point lower.  The session ended on an up-tic with a volume surge.  This was a clearly up day by 67 and 57 points. The span was 53.  With this increase, the 55 day EMA still cut across the bottom of the day's range.  This is encouraging, but to become confident that the next wave up MIGHT have started will take a further sustained increase above the 9/23 hi of 5365 – or better yet, 4500.  If this is the case, the Index will be on its way to 4900.

The DJI followed a similar path, ending with a slightly smaller gain.  It had a clearly up day by 474 and 328 points.  The 55 day EMA cut through its 481 day range.

The NASDAQ also followed a similar path.  It had a clearly up day by 238 and 228 points.  The 55 day EMA cut through its 128 point range.  It had the day's largest gain.  It had spent the vast majority of its time since 9/27, including yesterday's entire session, more than 5% under its 9/07 hi.  Today's entire session was above that level

Even the Russell followed a similar path.  It had a clearly up day by 34 and 24 points. Its entire session was above its 55 day EMA.  The vast majority of the time since 9/09 – over a month ago – including the entirety of the last two day's sessions, has been spent more than 5% under its 3/15 high.  It spent all of today's sessoin above that level.  It was also above its 55 day EMA.

Everything today was positive and aligned, for the first time in many weeks. This is a relief – but it's only one day and as such doesn't mean much.  As I've often said, follow through is important.  So what happens tomorrow, and on into next week should give us some useful information.

After I wrote the above, I saw this on Seeking Alpha from Elliott Wave analyst Avi Gilbert.

“In the meantime, the market is not out of the woods just yet.  The action we seen into early next week will either tell us we have one more trip down to the 4165SPX region before this correction has completed, or if we have indeed completed this correction, and the next buying opportunity will be in early November on a pullback to 4400SPX before we begin the rally to 4900SPX.

So, tread carefully.  There are still twists and turns to come before we can be sure we have begun the rally to 4900SPX.“

SP500 Closings -

10/14/19 - 2966

10/14/20 - 3489

09/13/21 - 4443

10/14/21 - 4438

NYSE Internals were very strong today 

A/D = 2554/760 = 3.36

A/D Vol = 3.93

New Hi/Lo = 156/23 = 6.78

Friday, October 15, 2021

Green Arrow Up [mostly]

SP500 at the close  ---  4,471.37   +33.11 (+0.75%)

DJI30    ---  35,294.76   +382.20 (+1.09%)

NASDAQ   ---   14,897.34   +73.91 (+0.50%)

Russell 2000   ---   2,265.65   -8.52 (-0.37%)

The SP500 opened at 4448, up 9 points, and immediately leapt to 4460, up 22.  After that it wrapped around 4465 until 1:50. It then wrapped around 4470 until the close.  It had a clearly up day by 36 and 61 points. The span was 28.  The day's hi and close surpassed the 9/23 local hi of 4465.  The next step to validate a continuing bull thrust would be a rise above the 9/02 all time hi of 4546.  But there is no guarantee that there won't be another pull back before that happens.

The DJI followed a similar path and had the day's largest gain. It had a clearly up day by 397 and 580 points.  Having blown past the 9/29 local hi of 34580, the DJI's next target is the 8/16 all time hi of 35631.  The same caveats as with the SP500 apply.  

The NASDAQ had a somewhat different path, but trended positive all day, finishing with the smallest gain.  It had a clearly up day by 238 and 228 points. It did not cross above any recents highs, so it has a bit uncertainty, and more to prove.

The Russell 2000 was the outlier.  It started strong, jumped to the days hi of 2306, then started to fall.  That continued most of the day, with a slight bump up between 2:00 and 3:00.  But then it fell hard to close with a loss at the day's lo. This was a mixed session, with the hi and lo up by 31 and 22 points, respectively, contra the 8 ½ point loss.  At the hi, it exceeded the 9/27 local hi of 2293, and is within 4 points of the 9.02 local hi at 2310.

It's confusing to see one index so different from the others – though there was some positive even there, with the higher extremes.  So some optimism might be warranted – but temper it with caution.  We need to see what next week will bring.

Weekly changes -

SP500 +1.78%

DJI 30 +1.58%

NASDAQ +2.18%

Russell 2000 +1.46%

SP500 Closings -

10/14/19 - 2966

10/14/20 - 3489

09/13/21 - 4443

10/14/21 - 4438

NYSE Internals -  

A/D = 1619/1690 = 0.96

A/D Vol = 1.61

New Hi/Lo = 205/30 = 6.83